10.A.
City Council Draft Agenda
- Meeting Date:
- 05/01/2018
- From:
- Dean Coughenour, Director of Risk Management
TITLE:
Consideration of Insurance Premium Renewals: Workers' Compensation, Property and General Liability Policies.
STAFF RECOMMENDED ACTION:
1) Approve the renewal of our Workers' Compensation agreement with Copperpoint Mutual with an estimated annual cost of $576,000.
2) Approve the renewal of our Property insurance agreement with A.I.G. with an estimated annual cost of $189,820.
3) Approve the renewal of our General Liability, Auto, Umbrella and associated lines of coverage with Travelers Insurance with an estimated annual cost of $720,232.
2) Approve the renewal of our Property insurance agreement with A.I.G. with an estimated annual cost of $189,820.
3) Approve the renewal of our General Liability, Auto, Umbrella and associated lines of coverage with Travelers Insurance with an estimated annual cost of $720,232.
Executive Summary:
By renewing our Workers Compensation coverage with CopperPoint Mutual, the City will spend the same amount next fiscal period over this fiscal period. Since policy ending 6/30/14 we have saved over $1,600,000 in renewal premiums verses the premium paid in fiscal 2013-2014. The estimated annual premium for 2018-2019 is less than the total paid during the 2005-2006 fiscal period.
By renewing our property coverage with AIG, the City will pay the same next fiscal period as this fiscal period. Although we have added additional property and experienced a significant loss of our chamber roof, the policy premium with AIG will remain the same.
By renewing our General Liability, Auto, Umbrella and associated lines of insurance coverage with Travelers Insurance Company, the City will expend $29,372 more next fiscal period over this fiscal period. This is primarily due to an adverse loss the City experienced in relation to a January 2011 claim. Included in the increase is $5,400 in premium, which is an enhancement to our cyber coverage. We have saved $1,750,000 in renewal premium verses premium paid in fiscal 2013-2014 on our General Liability, Auto, Property and related coverage not withstanding an increase in exposures.
Financial Impact:
The net fiscal impact of insuring all lines of coverage is less than a 2% increase, or $29,372, next fiscal period.
Policy Impact:
None
Connection to Council Goal, Regional Plan and/or Team Flagstaff Strategic Plan:
None
Has There Been Previous Council Decision on This:
No
Background and History:
The City’s Workers Compensation coverage is insured with Copperpoint Mutual and has been for over ten years. Because of the efforts of our employees and the subsequent reduction in injuries, we have been able to secure a reduction in each of our renewals over the last four years and a flat or no increase this year. Since policy ending June 30th, 2014, payroll has increased 16% while premiums have decreased 44%.
The City of Flagstaff carries insurance to protect the City from unexpected financial loss. Coverage areas include auto, general liability, excess liability ($20 million), property coverage, crime, cyber, airport liability in the amount of $40 million, flood and specific properties, employer’s liability, errors and omission coverage, and other supplemental coverages as appropriate. Our current carrier for most lines of coverage is Travelers Insurance. The City has a $75,000 self-insured retention on both general and auto-liability claims. This self-insured retention applies to both legal fees incurred as well as settlement amounts.
Our property coverage is insured with AIG and is subject to a $25,000 deductible. We have been insured with AIG since July of 2014. Our policy has reduced in net cost each of the last four years and we are currently in year two of a three year rate lock on premiums providing losses going forward are less than 60% of premium.
The City of Flagstaff carries insurance to protect the City from unexpected financial loss. Coverage areas include auto, general liability, excess liability ($20 million), property coverage, crime, cyber, airport liability in the amount of $40 million, flood and specific properties, employer’s liability, errors and omission coverage, and other supplemental coverages as appropriate. Our current carrier for most lines of coverage is Travelers Insurance. The City has a $75,000 self-insured retention on both general and auto-liability claims. This self-insured retention applies to both legal fees incurred as well as settlement amounts.
Our property coverage is insured with AIG and is subject to a $25,000 deductible. We have been insured with AIG since July of 2014. Our policy has reduced in net cost each of the last four years and we are currently in year two of a three year rate lock on premiums providing losses going forward are less than 60% of premium.