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Home My WebLink About05-284 Resolution No. 05-284 RESOLUTION ACCEPTING THE PROPOSAL OF LUNDSTROM INSURANCE FOR LIMITED SELF-INSURANCE PROGRAM BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Olufemi Folarin, City Manager,be and is hereby authorized and directed to accept the proposal on behalf of the City of Elgin of Lundstrom Insurance for the city's limited self-insurance program for the period October 1, 2005 through October 1, 2006 as follows: a. To award Safety National a $500,000 SIR worker's compensation proposal for a total excess premium cost of$71,665 . b. To accept St. Paul's renewal for a premium cost of$857,743.00 and a claims administration fee of$61,000. c. To accept American International Specialty Lines' renewal pollution liability policy for a premium cost of$46,101. s/Ed Schock Ed Schock, Mayor Presented: September 28, 2005 Adopted: September 28, 2005 Vote: Yeas: 6 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk Premium Comparison Renewal Expiring Premium Premium Property Insurance: Building and Contents $ 175.084 $ 174,884 Equipment Breakdown $ 20,899 $ 20,192 DIC, Flood and Earthquake $ 20,479 $ 20,194 Inland Marine: $ 25,700 $ 25,348 Crime $ 6,780 $ 7,263 Automobile: Liability $ 30,157 $ 34,739 Physical Damage $ 39,909 $ 52,766 General Liability $ 165,038 $ 134,949 Employee Benefits $ 186 $ 238 EMT:Nurses Professional Included Included Law Enforcement Liability $ 120,916 $ 122,378 Public Entity Management Liability $ 13,574 $ 14,953 EmploTuent Practices Liability $ 84,422 $ 107,132 Umbrella Liability $15,000,000 Limit $ 143,043 $ 131,500 Terrorism $ 11.565 $ 14,611 TOTAL $ 857,743 $ 861,147 29 Premium Summary Insured: City Of Elgin Policy Term: 10/01/05 to 10/01/06 Coverage Expiring Premium Renewal Premium Workers Compensation $ 68,538 $ 71,665 Total $ 68,538 $ 71,665 Disclaimer: The abbreviated outlines of coverages used throughout this proposal are not intended to express any legal opinion as to the nature of coverage. They are only visuals to a basic understanding of coverages. Please read your policy for specific details of coverages. .This proposal reflects a summary of coverages only:the actual policy will supply all terms and conditions 7 Premium Summary Insured: City Of Elgin Policy Term: 10/01/05 to 10/01/06 Coverage Expiring Premium Renewal Premium Contractors Pollution $ 9,661 $ 9,596 Terrorism $ 93 $ 83 Commercial Pollution $ 33,733 $ 33,922 Terrorism $ 1,896 $ 2,500 Total $ 45,383 $ 46,101 Disclaimer: The abbreviated outlines of coverages used throughout this proposal are not intended to express any legal opinion as to the nature of coverage. They are only visuals to a basic understanding of coverages. Please read your policy for specific details of coverages. .This proposal reflects a summary of coverages only;the actual policy will supply all terms and conditions 8 } <0 O F F4 C "°"""�'\"'' Agenda Item No. City of Elgin 9 ( '‘ 0 -.* , ,,. Ir [I)‘0` E (�L•'� i G 1 i f 5. September 23, 2005 i N ` i> I l TO: Mayor and Members of the City Council FINANCIALLY STABLE CITY GOVERNMENT EFFICIENT SERVICES, AND OUAUTY INFRASTRUCTURE FROM: Olufemi Folarin, City Manager Gail Cohen,Human Resources and Purchasing Director SUBJECT: Insurance Policies for 2005 - 2006 PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to award a contract for the City's limited self-insurance program for the period October 1, 2005,through September 30, 2006. RECOMMENDATION P It is recommended that the City Council accept the following limited self-insurance coverages for the period October 1, 2005,through September 30, 2006 as follows: A. To award Safety National a$500,000 SIR worker's compensation proposal for a total excess premium cost of$71,665. B. To accept St. Paul's renewal for a premium cost of$857,743.00 and a claims administration fee of$61,000. C. To accept American International Specialty Lines' renewal pollution liability policy for a premium cost of$46,101. BACKGROUND The City's current limited self-insurance program, which expires September 30, 2005, includes worker's compensation claims administration by Custard Claims Management Services, an excess worker's liability policy with Safety National with a self insured retention of$500,000, a $3,000,000 pollution insurance policy through AIG, and liability/property insurance through St. Paul. These policies give the City total coverage limits of $2,000,000/occurrence and $17,000,000 of aggregate liability for most types of losses. The City's per occurrence, self- insured retention is $250,000 with a $1,500,000 maximum out of pocket cost for claims in the policy year. This year's quote from St. Paul is lower than last year's premium despite an increase in our exposures. According to our broker, Lundstrom's Insurance, the insurance fl' marketplace for governmental entities has either softened or remained flat. St. Paul has provided insurance proposals with two deductible levels for our property (Buildings and Contents Coverage), Crime Coverage, the Boiler coverage and the Inland Marine Coverage. If the City , Insurance Policies 2005-2006 ' September 23, 2005 Page 2 keeps the lower deductibles (ranging from $1,000 for inland marine to $50,000 for property), our premiums are lower than last year's by $3,404. If the City raises the all deductible levels to $100,000, our premium is $19,190 lower. Risk Resources, our insurance consultant, has analyzed the $100,000 deductible alternatives and recommends that we keep the lower deductible levels. The cost of the program is $857,743.00. The City's one year contract for excess worker's compensation insurance with Safety National expires September 30, 2005. Safety National has proposed a premium of $71,665 with a self insured retention of $500,000. Last year, we paid $68,538 (subject to increase after a payroll audit)with a self insured retention of$500,000. St. Paul has provided administration of our retained claims (those under the self-insured retention)while they have been our insurance company. St. Paul has proposed continuing claims administration services at the same cost as last year; $61,000. Our pollution insurance, provided by American International Specialty Lines for $3,000,000 for specialized pollution coverage, will cost $46,101, a slight increase from last year's premium of $41,463. e Our current contract with the Custard Claims Management, the City's worker's compensation third party administrator expires on September 30, 2006. GROUPS/INTERESTED PERSONS CONTACTED None. 9.1k,/FINANCIAL IMPACT The total cost of the new program is $964,844; $857,743.00 for casualty/property coverage, $61,000 for administrative services, $46,101 for pollution. There are sufficient funds in the Risk Management Fund, account numbers (630-0000-796.50 series) to pay for the 2005 portion of the program, or $321,536.75. Sufficient funds will need to be included within the 2006 Risk Management Fund budget for next year's expenses. EGAL IMPACT None. Insurance Policies 2005-2006 ,A"' September 23, 2005 Page 3 ALTERNATIVES 1. Accept the recommendations detailed above. 2. Reject the recommendations and solicit alternative sources for insurance, leaving the City without coverage during the process. Respectfully submitted for Council consideration. GAC Attachment Premium Comparison ......_.._......_. Renewal Expiring Premium Premium Property Insurance: Building and Contents $ 175,084 $ 174,884 Equipment BrealdoW71 $ 20,899 $ 20,192 DIC, Flood and Earthquake $ 20,479 $ 20,194 Inland Marine: $ 25,700 $ 25,348 Crime $ 6,780 $ 7,263 Automobile: Liability $ 30.17 $ 34,739 Physical Damage $ 39,909 $ 52,766 General Liability $ 165,038 $ 134,949 Employee Benefits $ 186 $ 238 EMT/Nurses Professional Included Included Law Enforcement Liability $ 120,916 $ 122,378 Public Entity Management Liability $ 13,574 $ 14,953 Employment Practices Liability $ 84,422 $ 107,132 Umbrella Liability $15,000,000 Limit $ 143,043 $ 131,500 Terrorism $ 11,565 $ 14,611 TOTAL $ 857,743 $ 861,147 l 29 Premium Summary Insured: City Of Elgin _ Policy Term: 10/01/05 to 10/01/06 Coverage Expiring Premium Renewal Premium Contractors Pollution $ 9,661 $ 9,596 Terrorism $ 93 $ 83 Commercial Pollution $ 33,733 $ 33,922 Terrorism $ 1,896 $ 2,500 Total $ 45,383 $ 46,101 Disclaimer: The abbreviated outlines of coverages used throughout this proposal are not intended to express any legal opinion as to the nature of coverage. They are only visuals to a basic understanding of coverages. Please read your policy for specific details of coverages. .This proposal reflects a summary of coverages only;the actual policy will supply all terms and conditions 8 Premium Summary Insured: City Of Elgin Policy Term: 10/01/05 to 10/01/06 Coverage Expiring Premium Renewal Premium Workers Compensation $ 68,538 $ 71,665 Total $ 68,538 $ 71,665 Disclaimer: The abbreviated outlines of coverages used throughout this proposal are not intended to express any legal opinion as to the nature of coverage. They are only visuals to a basic understanding of coverages. Please read your policy for specific details of coverages. .This proposal reflects a summary of coverages only;the actual policy will supply all terms and conditions 7