HomeMy WebLinkAbout1995-03-28 - AGENDA REPORTS - 1995 GEN PROPERTY INS RENEWAL (2)AGENDA REPORT
City Mana p val
Item t r s nted by:
Ken Pulskamp
UNFINISHED BUSINESS
DATE: March 28, 1995
SUBJECT: 1995 Policy Year General Liability and Property Insurance Renewal
DEPARTMENT: City Manager
This item is on the agenda for renewal of the City's Public Liability and Property
Insurance packages for 1995 policy year. Each year in order to obtain appropriate levels
of coverage, the City prepares detailed specifications profiling the City and outlining our
comprehensive insurance needs. These specifications are then taken to the; insurance
markets by our broker, Antelope Valley Insurance, for quotation and review. Based on
the overall profile of the City, specifications again referenced the need for $10 million
in liability coverage per occurrence with a self insured retention (SIR) of $250,000. The
quotation for the City is based primarily on the following types and levels of exposures:
EXPOSURE
1995196 RENEWAL
POPULATION
147,228
OPERATIONS BUDGET
$45,176,495
CIP BUDGET
$24,058,663
STREET /ROAD MILES
259
P
$12,019,919
#FULL TIME EMPL YEES
184
#PART TIME EMPLOYEES
6
ft�HWT P14
R9
This year the City received proposals on the liability package from two companies, our
current provider, Insurance Company of the West (ICW) and Municipal Mutual. The
Municipal Mutual premium presented is $41,157 less than that presented by ICW.
81A,Fu"'�00 W E 0 Agenda Item: 6
Following a comprehensive review of both policies, the City then took the opportunity
to meet with Municipal Mutual to discuss their proposal and clarify key elements of the
policy, coverage and services presented. As a result of these discussions it was
determined that in many respects the intent of the proposed Municipal Mutual policy
mirrors that presented by ICW. It was further determined that there were several areas
within the policy that required refinement as to the scope of the coverage to be
presented. Overall, compared to the ICW policy it was determined that the policy
presented by Municipal Mutual...
has a very limited definition of "a contract". This limited definition removes from
protection much of the assumed lability that is stated and required in many of the
contracts the City may enter into.
has a total employment practices exclusion. The ICW policy provides for coverage for
any lability for salary and wages due to any form of discrimination specified in any
federal or civil rights law.
considers uninsured and underinsured motorists an absolute exclusion from the policy.
A key positive aspect of the Municipal coverage is reflected in their ability to fully cover
claims in excess of all attorney and expert cost associated with the defence of any
liability matter.
Finally, the Municipal Mutual contract is considered to be fully assessable. Therefore,
should the company experience financial difficulties, the City may be assessed a full
year's premium, $134,000, to assist in covering any losses or claims. Based on general
accounting principles the City would need to reserve this amount as a contingent lability
in our financial statements.
Conversely, the ICW policy proposal does provide for all of the components not
provided for through Municipal Mutual policy and does not require placement of any
additional funds in reserve.
In addition to the policy form considerations, City staff is concerned that at this time
Municipal Mutual services only two cities. As a new firm established in 1993, the City
is concerned that it may not be prudent to recommended use of Municipal Mutual
without a longer history and proven track record of success. Finally it should be noted
that staff is also concerned about overall service to the City in terms of ancillary risk
management programs and services. Currently ICW provides a wide range of safety,
training and risk management services. These are included as part of the basic package
and premium quoted. Municipal Mutual is very willing to dedicate $5,000 to programs
in this area. However services above this amount would require additional funding or
negotiation with Municipal Mutual. In summary based on an overall review of the
policies and services offered, staff is recommending that we continue to obtain
insurance coverage from ICW. Again this recommendation is based on the following
factors:
The ability of ICW to provide broader and comprehensive forms of
coverage
Overall financial stability of ICW
"A" rating of ICW
Ability to fully service the City
Finally it should be noted that our insurance broker, with over 25 years of experience
in this area, strongly supports continuing or current policy with ICW.
Along with the liability package, renewal of the property insurance, business income and
steam boiler and machinery coverage is now in order. In these areas, staff also
recommends continuing coverage with our current provider, Reliance Insurance
Company. A complete detail of all coverages to be procured at this time is provided in
attachment A.
RECOMMENDATION
That the City Council authorize the City Manager to procure insurance of the types and
levels of coverage specified in attachment A at a cost not to exceed $308,291, In
addition authorize the transfer of $36,000 from Gas Tax Fund Balance 02-2600, transfer
$17,700 from Transit Fund Balance 55-2600 and $13,259 from CDBG Fund Balance 12-
2600 to Self insurance 26-4201-294 to cover the various funds proportional share of the
overall City insurance costs. In addition direct staff to continually contact Municipal
Mutual for consideration in future years.
CITY OF SANTA CLARITA
PREMIUM
Policy Description
Insurance Co. of the West
Public Entity Liability
$1,000,000 Primary
$9,000,000 Excess
Total•
Reliance Insurance Co.
Property
Glass
Inland Marine
Crime
Auto
1994/95
$ 115,454.00
$ 101,082.00
$ 216,536.00
$ 30,609.00*
$ 356.00
$ 8,157.00*
$ 503.00
$ 78.355.00*
Sub Total: $ 117,980.00
CIGA $ 245.68
Total: $ 118,225.68
*Endorsements included and figured
at an annual premium.
Reliance Ins Company
Business Income Policy
for City Hall
Hartford Steam Boiler
Boiler & Machinery
Total Premium
TOTAL SAVINGS OF $39,785.07
CGG:jet
02/28/95
$ 9,090.00
$ 4,224.00
$ 348,075.68
1995/96
$ 112,762.00
$ 63.166.00
$ 175,928.00
$ 29,163.00
$ 356.00
$ 7,360.00
$ 527.00
$ 80,979.00
$ 118,385.00
$ 231.92
$ 118,616.92
$
9,146.35
$ 4,599.34
$ 308,290.61