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Home My WebLink About2001 10 22 Consent A Renewal of Liability Coverages and Worker Compensation COMMISSION AGENDA ITEM A CONSENT X INFORMATIONAL PUBLIC HEARING REGULAR 10/22/0 I Meeting MGR. fL- -/DEPT Authorization REQUEST: General Services Department requesting the City Commission approve staff's recommendation to renew automobile liability, general liability, property damage, and public officials liability insurance coverages FY 02 through Coregis and AIG, and to engage Preferred Governmental Insurance Trust (PGIT) as the city's Workers Compensation carrier. PURPOSE: This agenda item is necessary to allow for the renewal of liability coverages and workers compensation for the fiscal year October 1, 200 l, through September 30, 2002. BACKGROUND: I. Through Risk Management Associates of Altamonte Springs, the limited market of public entity insurers was approached for quotes on the full range of our property and casualty coverages. The results of that effort are outlined on the first page of the attached letter from Paul Dawson of R.M.A. 2. The second page of that same letter lists the comparison of premiums from FY 00-0 1 to FY 01-02, with the following explanations for corresponding increases and decreases: Property Damage - the premium decrease results from good loss experience, plus revisions in the property schedule which eliminated most underground structures and appurtenances that have little-to-no exposures. The very slight rate per $100 of value had no appreciable effect. Automobile Liability - the premium increase results from the addition of 27 vehicles which had not previously appeared on our Consent Agenda Item "A" City Commission Meeting October 22, 2001 schedule of vehicles. The schedule had not been updated since 1998. To minimize the premium increase, physical damage coverage was removed from all those vehicles over 5 years old. A rate increase per vehicle also had a negative impact. General Liability - the premium increase results from an increase in net operating expenditures, which is the major factor used by underwriters in determining GL premiums. The rate increase per $100 in net operating expenditures also had a negative effect. Public Officials Liability - the premium increase reflects the continued concern by carriers over our losses during the past 4 years. A rate increase also impacted the renewal premium. 3. Along with its renewal proposal for property and liability coverages, R.M.A. has submitted a proposal for workers compensation coverage which offers a savings of$12,530 from the renewal premiums by the Florida League of Cities. (Both quotes reflect significantly higher total payrolls, an increase in the city's Experience Modification, and higher state-approved rates per $lOO of payroll for every classification code/job title). The proposed new carrier is the Preferred Governmental Insurance Trust. Awarding this coverage to PGIT further reduces the property and liability premiums by $3,227, already reflected in the "Total Premium" figure on the "Premium Recapitulation" page. 4. The following represents budgeted and actual premiums for FY 00-01 and for FY 01-02 (if approved): Budgeted 00-0 I Actual 00-0 1 Budgeted 01-02 Proposed o l-02 Property Damage and Liabilities $ 163,750 $l46,390 $l61,000 $166,l93 Workers Compo 253,000 227,696 340,738 328,208 Totals 416,750 374,086 50l,738 503,433* * Staff recommends $1,000,000 coverage with $lOO,OOO deductible. The premium difference can be paid by "General Insurance Settlements" funds set aside for claims which fall within deductibles. Consent Agenda Item "An City Commission Meeting October 22, 2001 RECOMMENDATIONS: It is recommended that the proposal by Risk Management Associates which includes automobile/generaVproperty damage coverages by Coregis Insurance, public officials liability coverage by AIG, and Workers Compensation coverage by PGIT, at a total net premium of $503,433, be accepted. ATTACHMENTS: I. Letter dated October I, 200 I, from Paul Dawson, Risk Management Associates 2. Premium Capitulation, Risk Management Associates COMMISSION ACTION: Oct-OB-Ol 09:55A P.02 RMA R il;k Management Associates October I, 200 I Gl:C1l: DeMarie, General Servicc$ Din:dnr City of Winkr Springs Winter Springs. Plorida Dear Gene, Picas\.: Iinu enclosed the property, liahilily and workers' compensation insurance proposal for lhe City of Winter Springs. A:. is the standard proccuurc for Risk Management Associates (RMA), we solicited several other insurance carriers for insurance 4uotes on your behalf. I have summarized their rC$pol1ses below. There arc only lhree companies and one self. insured pool currently writing properly und liability insurance for public entities in Florida. They arc Corcgis, Sl. Paul Argonaut and Florida Municipal Insurance Trust (FMIT). RMA has direct access to all except FMrr. Sl. Paul Insurance Co. '0. Not compctitiv~ with the renewal premium. Declined to give a quote hased on Coregis premium and coverdges. Argonaut Insurance Co. Callnot write property on an admitted basis in the State of Florida. Corcgis and St. Paul will not write stand-alone properly policies. J-'Iorida insuranl:C law prohibits us from placing covcragl: with a nOll-admitted carrier when an admitted carrier will provide the covl:ragc. ~.Q[cgis. Quote renewal at $121,193 Public Officials' Li,loilily carriers approached w~rc as f()IJows. Cnrt~~is - Declined due to past loss experience Z..lIJ.if.!l_.. Dcdill~d due to paslloss experience. St. Paul - Will not write sland-alone Public Officials' Liability coverage. Ap.:onaut- Will not write stand-alone Public Omcials' Liability coverage. United National Declined <..IlIl: to loss experience. ATG .. QuoLed renewal at $51,500. Plcasl: /ind on the allached page a summary ofpn:mium and exposure cha.nges [rom last year to this year for your review. Commcn:iaJ Insuranc~ . Uonds . I.h~k lHana~l:ml:n( Service~ . Pro~ram Design and Administration r-.o r;ln If; 1507 . All,:H'I)I)n(l~ spring.;. Fll)ridi'i 3;171(,.1507 . Phonl~: (1071331.1400 . r,)(;,imill~: (1(17) 331..1111)(1 OCT-08-2001 11:16 96% P.02 Oct-OS-Ol 09:55A Property (!)cluding buildings! contcnJ~l,jnJand marinel hoiler & nlacl1~l1ery 00-01 IIV $15,Ro7,751 Premium S 17,759 Rate $.0012 per $1 on value. 01-02 TIV $10,718.376 Premium $13,224 Rate $.0123 per $100 vallie. 1 (jIYG increa~e Aut01l10bih:: L-jability 00-01 113 vehicles 01 -02 140 vehicles Premium $ 41,304 Premium S 56,935 Rale $366 per vehicle. Rate $407 per vehicle. 11 ~'o increm;c General Liabilit y 00-01 $11.458.457 net expenditun:s Premium $42,882 01-02 $12.334,895 net expenditures Premium $50,781 Rate $.374 per $100 Rate $.412 per$100 10% increase Puhlic Of/icial'sJ<.iability 00-01 $11,458,457 net expenditures Premium $44,195 01-02 $12)14,895 net expendi tures Premium 551,500 Rate $.386 per $100 RaTe $.418 per $1 00 9% incrt:ase Crime 00-01 01-02 Premium $249 Premium 5253 2 %) i Ilcrease Total Premium 00-01 5146,390 01-02 $172,693 18% increase I realize the gross premium is more than anticipated. Please realize tl1<lt. the above final premiums are a resull of several negotiations with Coregis and AIG to reduce premiums from their original renewal q\lotes released to RMA. R.\1^ has also reduced their commission in order to gel premiums closer to the City's hudget. When we indicated renewal premiums to the City several months ago, we did not anticipate the addition of 27 vehicles and the ullwillingness ofpuhlic officials' liability can-iers to quote the City's business. Please feel free to check with other neighboring cities to deten"ine if the above increases are inline with their expcriem:e. Regards. p~~---- Paul Dawson Senior Account Executive OCT-08-2001 11:16 96% P.03 P.03 RIMjA Risk MaJageme t ASsOcIates City of Winter Springs PREMIUM RECAPITULATION Annual Premium Property (including equipment breakdown) $ 11,488 Inland Marine $ 1,736 Crime/Employee Dishonesty $ 253 General Liability, Law Enforcement, and EMT /Paramedics $ 50,781 Automobile Liability and Physical Damage $ 56,935 Public Officials Liability ($500,000 limit, $100,000 deductible (l, 000, 000 limit $100,000 deductible Workers' Compensation $ 47,500 $ 45,000) $ 51,500) $328,208 Accidental Death & Dismemberment $ 2,515 FEMA and Florida State Fire Marshall Surcharges $ 17 Total Premium: $499,433 Notes of Importance: . Property and Liability premiums include a $3,227 credit when Workers' compensation coverage is purchased. . Signed acceptance of proposal required to bind coverage . Signed statement of values required to bind coverage . Signed Public Officials Liability application required to bind coverage . Signed pollution application required to bind coverage . Property appraisal required within 60 days of policy effective date . Signed uninsured motorists form required The brief description of insurance coverage contained in this proposal is being provided as an accommodation only and is not intended to cover or describe all policy terms. For more complete and tletailed information relating to the scope and limits of coverage, please refer directly to the policy documents. Specimen forms are available upon request.