8.D.
City Council Draft Agenda
- Meeting Date:
- 05/07/2019
- From:
- Dean Coughenour, Director of Risk Management
TITLE:
Consideration and Approval of Contracts: Annual Workers' Comp and General Liability Insurance.
STAFF RECOMMENDED ACTION:
- Approve the renewal of our Workers’ Compensation agreement with CopperPoint Mutual with an estimated annual cost of $515,847.
- Approve the renewal of our property insurance agreement with A.I.G. with an estimated annual cost of $199,320.
- Approve the renewal of our General Liability, Auto, Umbrella and associated lines of coverage with Travelers Insurance with an estimated annual cost of $729,592.
Executive Summary:
By renewing our Workers Compensation coverage with CopperPoint Mutual, the City will spend $33,000 less next fiscal period compared to the current fiscal period. Since policy period ending 6/30/14, the City has saved over $2,100,000 in renewal premiums verses the premium paid in fiscal 2013-2014. The estimated annual premium for 2019-2020 is less than the total paid during the 2001-2002 fiscal period.
By renewing our property coverage with AIG, the City will pay the same next fiscal period as this fiscal period.
By renewing our General Liability, Auto, Umbrella and associated lines of insurance coverage with Travelers Insurance Company, the City will expend $35,000 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 and an increase in number of newer vehicles. We have saved $2,000,000 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.
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 six years. Since policy ending June 30th, 2014, estimated payroll subject to insurance carrier premium has increased 24% while actual premiums have decreased 50%.
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, 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. We are currently in year three of a three year rate lock on premiums providing losses going forward are less than 60% of premium.
By renewing our property coverage with AIG, the City will pay the same next fiscal period as this fiscal period.
By renewing our General Liability, Auto, Umbrella and associated lines of insurance coverage with Travelers Insurance Company, the City will expend $35,000 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 and an increase in number of newer vehicles. We have saved $2,000,000 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.
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 six years. Since policy ending June 30th, 2014, estimated payroll subject to insurance carrier premium has increased 24% while actual premiums have decreased 50%.
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, 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. We are currently in year three of a three year rate lock on premiums providing losses going forward are less than 60% of premium.
Financial Impact:
The net fiscal impact of insuring all lines of coverage is a one percent decrease in premium or a $14,000 savings.
Policy Impact:
None
Connection to Council Goal, Regional Plan and/or Team Flagstaff Strategic Plan:
There is no specific Council Goal that relates to insurance renewals, however this coverage supports the financial stability of the City.
Has There Been Previous Council Decision on This:
This is a yearly renewal that is considered by Council.