98-233 0
Resolution No. 98-233
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 Joyce A. Parker, 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, 1998 through
September 30, 1999 as follows :
a. The St. Paul Option III $75,000/occurrence SIR with
$350,000 "All Lines" aggregate SIR proposal for a total excess
premium and claims administration cost of $377, 686;
b. The Illinois National Option II $250,000/occurrence
compensation proposal for a total excess premium cost of
$21, 300;
c. The Cannon Cochran Management Services proposal for
workers ' compensation claims administration services for
$30,875;
a copy of which is attached hereto and made a part hereof by
reference.
s/ Kevin Kelly
Kevin Kelly, Mayor
Presented: September 23, 1998
Adopted: September 23, 1998
Omnibus Vote: Yeas 6 Nays 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
`m.
OF E
City of Elgin Agenda Item No.
rji'l if 110$
r . .
September 9, 1998
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: Worker' s Compensation Addendum to Insurance Renewal
PURPOSE
The purpose of this memorandum is to provide Council with new
information regarding the worker' s compsensation excess
insurance policy proposals which changes Risk Resouces ' and
staff ' s recommendation for this coverage.
BACKGROUND
Enclosed is an addendum from Risk Resources indicating that
the City has an opportunity to substantially decrease our
self-insured retention (SIR) for worker' s compensation for a
small increase in premium.
As discussed in our earlier memorandum and as shown on the
enclosed "Revised Chart IV" , the City' s current
$300,000/occurrence SIR for worker' s compensation excess
insurance was recommended to be renewed with Safety National ' s
Option I at a cost of $19 , 197 (a savings of $25,935 from last
year' s premium) .
With the other options that have now been received and
analyzed, Risk Resources and staff recommend the following
additional 1998 enhancement:
* That the City utilize $2133 of the above worker' s
compensation premium savings and select Illinois
National 's Option II , which offers a substantially lower
SIR limit of $250, 000/occurrence; basically, this means
that the City has reduced its potential risk on every
worker' s compensaton claim by $50,000 in exchange for an
additional $2133 in excess premium cost.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None.
Insurance Renewal
September 9, 1998
Page 2
FINANCIAL IMPACT
There are sufficient funds in the 1998 Risk Management Fund to
cover the recommended additional worker' s compensation
insurance premium of $2133. Sufficient funds will be
established in the 1999 Risk Management Fund' s budget for the
next year' s expenses .
LEGAL IMPACT
None.
ALTERNATIVES
* The City could save the entire $25 , 935 in excess worker' s
compensation premium cost by keeping the Safety National
Option I, which has the same $300,000/occurrence SIR
limit and risk potential as our current program.
* The City could utilize $2133 of the above savings and
purchase Illinois National Option II which reduces our
potential risk on every worker' s compensaton claim by
$50, 000 .
As shown on the revised Exhibit C Comparison Summary, the
recommended renewal program (Revised Option III ) with all the
noted enhancements is still $62,238 less than our expiring
program.
RECOMMENDATION
Change Recommendaton b. from our previous memorandum to:
b. To accept the Illinois National Option II
$250,000/occurrence compensation proposal for a total
excewss premium cost of $21 , 300 .
Respectfully submitted,
fQ4L--
Jo e A arker
City Manager
JAP/db
ISK
SOURCES
Independent Risk Management Consultants September 9, 1998
Insurance Advisors
Michael Sarro
Purchasing Director
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
RE: ADDENDUM TO THE ANALYSIS OF
PROPERTY AND LIABILITY INSURANCE
PROPOSALS
Dear Mike:
Recent developments in our negotiations with the insurance carriers providing proposals for
your property and liability insurance program have led us to reevaluate our recommendation
regarding the Excess Workers Compensation Coverage. Originally, Safety National, your incumbent
insurance carrier, had provided a single quotation using a self-insured retention level of$300,000 per
occurrence. This is the City's current retention level. The competing insurance company, Illinois
National, provided options using self-insured retention levels of$300,000, $250,000 and $200,000.
We requested that Safety National provide additional options at lower retention levels. The
attached revised Chart IV shows the result of this request. At the $250,000 retention level, Illinois
National becomes the superior proposal. The City can reduce its retention level $50,000 for an
additional premium of$2,133.
We went back and analyzed the City's past eleven years loss experience and determined total
additional recoveries from a $250,000 retention would have been $50,000. Total additional
premiums from 1987 until present would have been $23,463. Based on the current pricing available
for this coverage, our revised recommendation is to accept the Illinois National proposal using a
$250,000 self-insured retention for Excess Workers Compensation Coverage.
- • rul g ours
Ran 1 ►eLopst
RCD:sm •
Enclosure
OCLANTY7T6ti ftiTTALti YELAN
185 South York Street• Elmhurst, Illinois 60126 • Telephone (630) 617-5100 • Fax(630)617-5128
E-Mail:riskmanage@aol.com
Chart IV
City of Elgin Premium Comparison for
1998-99 Excess Workers Compensation Proposals
(Revised 9/8/98)
1997-98
Current
Safety Safety Illinois Safety Illinois Safety Illinois
National National National National National National National
Option I Option I Option II Option II Option III Option III
Premium $ 45,132 $ 19,197 $ 19,500 $ 29,862 $ 21,330 Not quoted $ 38,395
Retention 300,000 300,000 300,000 250,000 250,000 $ 200,000 200,000
Rate .165 .063 .064 .098 .070 N/A .126
ChCLIDITS■CMICOMISNILMNI art
t
•
REVISED
COMPARISON SUMMARY
Revised
Self-Insured Retentions Current Option I Option II Option III
Major Coverages:
GL/Auto - Occurrence $150,000 $150,000 $100,000 $75,000
Public Officals - $100.000 $100,000 $100,000 $75,000
Occurrence
Property - Occurrence $100,000 $100,000 $50,000 $50,000
"All Lines" Liab - $750,000 $750,000 $500,000 $350,000
Aggregate
W.C. - Occurrence $300,000 $300,000 $300,000 $250,000
Excess Premium - $491,369 $384,130 $414,130 $429,031
Program Cost
Savings vs. Current Cost $1 07,239 $77,239 $62,238
* Revised Option III includes the St Paul Option II and the Illinois National Option IL
recommendations.
• <0OFcCC�ti �t
Co
` ' City of Elgin Agenda Item No. }
September 4 , 1998
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: Insurance Renewal
PURPOSE
The purpose of this memorandum is to provide information to
the Mayor and members of the City Council regarding the
renewal of the City' s limited self-insurance program for the
period October 1, 1998 through September 30, 1999 .
BACKGROUND
At the July 8th Committee of the Whole meeting, the City
Council approved a proposal from Risk Resources (the City' s
long-time independent insurance consultants) to coordinate the
insurance renewal process and to perform a comprehensive
review and analysis of the various proposals being presented
by Lundstrom Insurance of Elgin (the City' s insurance agent) .
The City' s current limited self-insurance program, which is
expiring September 30, 1998 combines Safety National ' s
$300, 000/occurrence self-insured retention (SIR=City' s deduct-
ible) for workers compensation with claims administration by
Cannon-Cochran Management Services, Inc. and the St . Paul ' s
$150, 000/occurrence with $750, 000 annual aggregate SIR for
"all lines" liability coupled with various excess insurance
policies to give the City total coverage limits of
$9, 000, 000/occurrence and $10, 000, 000 of aggregate liability.
Risk Resources in their attached letter of recommendation
(Exhibit A) analyzes all of the various proposal options
submitted by Lundstrom (Exhibit B) .
It is noted that the current "soft" insurance market discussed
at the July 8th meeting as well as our good overall claims
experience over the past several years has resulted in a
substantial decrease in our excess insurance premium costs and
have given us the opportunity to enhance the City' s Limited
Self-Insurance Program by dramatically reducing our self-in-
sured retentions for relatively modest increases in the excess
premium costs .
As noted in the Risk Resources analysis, St . Paul has offered
the best overall package and included three proposal options
Insurance Renewal
September 4, 1998
Page 2
risk
for our consideration; the various options and program costs
are highlighted in the attached Comparison Summary (Exhibit
C) .
As has been the case in recent years, Risk Resources and staff
are recommending that some of the $107, 239 savings generated
by the St Paul Option I Proposal (same as current program) be
utilized to continue the 1997 enhancements and select the St .
Paul Option III , which provides for the greatest reductions in
our self-insured retentions .
Continue 1997 enhancements
* Our Umbrella Liability coverage increased by $3, 000, 000,
which improved the City' s total "all Lines" liability
limits to $9, 000, 000/occurrence and $10, 000, 000 aggre-
gate .
* While leaving our Commercial Crime coverage limits at
$500, 000, reduced our self-insurance deductibles from
$100, 000 to $5, 000; this tremendous reduction in our
deductible provides real insurance coverage beyond our
SIR for our many Parks facilities (Parks office, both
pools, both golf courses, Hemmens) that handle much lower
levels of daily/weekly cash receipts .
Recommended 1998 enhancements :
* Our 506 co-insurance contingent Business Income interrup-
tion coverage limits increased from $7, 000, 000 to
$8, 750, 000 due to the increased tax revenues being
realized from the Riverboat Casino operations.
* Risk Resources recommends that we utilize approximately
400 of our premium savings and select St Paul Option III,
which has substantially lower SIR limits
($75, 000/occurrence and an "all lines" aggregate of
$350, 000) . Basically, this means that the City has
reduced its potential risk on every liability claim by
$75, 000 and has reduced its annual aggregate potential
risk for all liability claims by $400, 000 in exchange for
an additional $42 , 786 in excess premium costs .
As shown on the Exhibit C - Comparison Summary, the
recommended renewal program with the noted enhancements
is still $64 , 471 less than our expiring program.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
eft-
Insurance Renewal
September 4, 1998
Page 3
rib-
dtrA,7
INANCIAL IMPACT
There are sufficient funds in the 1998 Risk Management Fund to
cover the recommended insurance premiums of $396, 883 and
related claims administration expenses of $30, 875 . Sufficient
funds will be established in the 1999 Risk Management Fund' s
budget for the next year' s expenses .
LEGAL IMPACT
.... c- None .
J
ALTERNATIVES
* The City could save the entire $107, 239 in excess premium
cost by accepting the St . Paul Option I , which has the
same SIR limits and risk potential as our current pro-
gram.
* The City could utilize $30, 000 of the above savings and
purchase Option II, which reduces our potential risk on
most liability claims by $50, 000 and reduces our annual
aggregate potential risk for all liability claims by
elift. $250, 000 .
* The City could utilize $42 , 786 of the above savings (and
only $12, 786 more than Option II) and purchase Option
III, which reduces our potential risk on most liability
claims by $75, 000 and reduces our annual aggregate
potential risk for all liability claims by $400, 000 .
RECOMMENDATION
The recommendation is that Lundstrom Insurance place the
following limited self-insurance coverages for the period
October 1, 1998 through September 30, 1999 outlined in the
last column on page 18 of their proposal as follows :
a. To accept the St . Paul Option III $75, 000/occurrence SIR
with $350, 000 "All Lines" aggregate SIR proposal for a
total excess premium and claims administration cost of
$377, 686 .
;; i;`1 LY J
b. To acc the Safety National $300, 000 SIR worker ' s
compe ation propoT1 for a total excess premium cost of
$19 97 . l''
c . To accept the Cannon Cochran Management Services proposal
rib.- for worker' s compensation claims administration services
for $30, 875 .
Insurance Renewal
September 4, 1998
Page 4
fri
As noted in Risk Resources Memorandum, staff will continue to
investigate the pollution liability coverages that may be
available and bring that information to council at a future
meeting for your consideration.
al pectfully su itted,
• cuk.....,-
/ce I. Parker
ity Manager
JAP/db
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•
ISK A
el•-- SOURCES
Independent Risk Management Consultants
Insurance Advisors
August 28, 1998
Michael Sarro
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
RE: ANALYSIS OF PROPERTY AND
LIABILITY INSURANCE PROPOSALS
Dear Mike:
We have analyzed the various proposals received for your property and liability insurance
coverages effective October 1, 1998. This letter and the accompanying charts will summarize our
findings and present our recommendations.
Our report will consist of the following sections:
1. Property and liability coverages excluding workers compensation coverage
2. Workers compensation coverage
3. Workers compensation claim handling services
4. Additional considerations
Property and Liability Insurance Coverage Excluding Workers Compensation
Chart I displays the premium costs and self-insured retention levels of the various proposals.
As you recall, the City currently has a self-insured retention of $100,000 for property
coverage, $150,000 for most liability coverages with a cap of$750,000 aggregate for all
coverages except boiler& machinery.
ribk
185 South York Street • Elmhurst, Illinois 60126 •Telephone (630) 617-5100 • Fax(630) 617-5128
E-Mail: riskmanage@aol.com
August 28, 1998 Page 2
Michael Sarro
The two leading proposals were.St. Paul, the incumbent insurance carrier, and Royal. Chart
II summarizes the major coverage differences between these proposals. As you can see, there
are some areas where St. Paul is superior and some areas where Royal is superior. On
balance,we believe the St. Paul proposal provides the best overall combination of price and
coverage.
RECOMMENDATION
As of this date, we are still in negotiations with St. Paul to enhance several coverage areas
from their original proposal. Given we can accomplish our negotiating goals, we recommend
accepting the St. Paul proposal Option M. This option results in a premium savings of
$33,161 from the current program. Also, this option significantly reduces the City's per
occurrence and aggregate self-insured retentions for a modest premium charge.
Workers Compensation Coverage
Chart IVdisplays the proposals received for Excess Workers Compensation Coverage. As
you recall, the City is self-insured for workers compensation claims and purchases excess stop
loss insurance. Currently, the self-insured retention for this coverage is $300,000 per
occurrence. Proposals were received from Safety National, the incumbent insurance carrier,
and Illinois National. Illinois National offered three options to reduce the self-insured
retention.
RECOMMENDATION
We recommend acceptance of the Safety National proposal maintaining the current self-
insured retention of$300,000. In analyzing the City's loss experience from 1987 until the
present,.there were only two claims over $200,000. The additional premium to reduce the
self-insured retention was not cost effective. The total additional premiums from 1987 until
present would have been $220,000. The total additional recoveries would have only been
$120,000. Selecting the Safety National proposal results in a premium savings of$25,935
from the current program.
Workers Compensation Claim Handling Services
Chart VI displays the claim handling proposals received from Cannon, Cochran,
Management Services, Inc. (CCMSI) and Willis Corroon Administrative Services
Corporation (WCASC). CCMSI is the incumbent service provider. As the chart indicates,
CCMSI has the most cost effective proposal.
•
0 n m/rxna.maacTyu .
August 28, 1998 Page 3
Michael Sarro
l RECOMMENDATION
We recommend remaining with CCMSI as the workers compensation claim handling service
provider.
Additional Considerations
While most public entities and private sector firms do not purchase separate pollution liability
insurance, we believe the City should consider purchasing this additional coverage. The City's
liability insurance coverage provides limited coverage for pollution liability claims. Currently,
there is no insurance coverage for the following types of pollution claims.
1. Claims arising out of fire fighting activities such as a hazardous materials response
situation.
2. Claims arising out of the handling of chemicals or other hazardous substances.
Examples include chlorine used in municipal pools or pesticides and/or herbicides
used in maintenance of golf courses and parks.
3. Claims arising out of the transportation of hazardous materials on City vehicles.
4. Heating or ventilation problems in public buildings, i.e. carbon monoxide poisoning.
Special Pollution Insurance Coverage is needed to provide protection for these types of
claims. Your insurance broker, Lundstrom Insurance, has done some initial investigation of
obtaining this coverage. 'They have received a price indication from American International
Group, the leading insurer for pollution liability coverage. Price indications for this coverage
ranged from a $25,000 premium for a $1,000,000 policy limit to $60,000 for a $5,000,000
policy limit.
In order to obtain a firm quotation for this coverage, a detailed pollution insurance application
will need to be submitted to the insurance company for review. We recommend the City
complete the application and obtain a firm quotation for Pollution Liability Insurance
Coverage.
V, • tru# ours,
C
Ra eLopst
RCD:sm
Enclosures
CKIJIMM.ITIZOTILITTENALTYCLON 21
r
Chart I
rik City of Elgin Premium Comparison
for 1998-99 Property&Liability Insurance
Proposals Excluding Workers Compensation
Current
1997-98
St. Paul St. Paul St. Paul St. Paul Penco Coregis Royal
Option I Option II Option III
COVERAGE
Property $410,987 $335,058 $365,058 $377,826 $432,686 $427,463 $326,095
Boiler& Machinery Included Included Included Included Included Included Included
General Liability(l) Included Included Included Included Included Included Included
Public Official Liability Included Included Included Included Included Included Included
Umbrella Liability Included Included Included Included Included Included Included
Not
rbk,e Included Included Included Included quoted Included Included
I Claim Handling Services Included Included Included Included Included Included Included
SELF INSURED RETENTIONS PER OCCURRENCE
Property 100,000 100,000 50,000 50,000 100,000 25,000 100,000
Public Officals 100,000 100,000 100,000 75,000 200,000 100,000 150,000
All Other Liability 150,000 150,000 100,000 75,000 200,000 100,000 150,000
Boiler&Machinery 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Auto. Physical Damage 1,000 1,000 1,000 1,000 50,000 1,000 100,000
Crime 5,000 5,000 5,000 5,000 N/A 100,000 100,000
Aggregate (Maximum Not
Total Retention Per Year) 750,000 750,000 500,000 350,000 Offered 570,000 450,000
(1) Includes Law Enforcement, Paramedic, Liquor and Automobile Liability
ISK -'1=
RESOURCES
Chart II
City of Elgin Major Coverage Comparison
between St. Paul and Royal Proposals
St. Paul Royal
A. PROPERTY
1. .Coverage for property located in Flood Yes Yes, but must purchase National
Zone A. Flood Insurance Coverage
($500,000 limit) as primary
coverage.
B. AUTOMOBILE PHYSICAL DAMAGE
1. Self Insured Retention $1,000 $100,000
' C. GENERAL LIABILITY
1. Pollution claims arising out of:
a.. Sewer Back Ups Yes, up to $2,000,000 No
b. Fire fighting activities No Yes
c. Pesticide or herbicide application No Yes, if performed according to
government standards
D. AUTOMOBILE LIABILITY
1. Pollution arising from transportation of No Yes
hazardous materials
E. PUBLIC OFFICIALS LIABILITY
1. Policy Limit $2,000,000 $10,000,000
2. Coverage for:
a. Injunctive relief Yes No
b. Breach of Contract Yes No
c. Failure to obtain or maintain adequate No Yes
insurance for the municipality
Page 1 of 2
ISK -"=" _
SOURCES
St. Paul Royal
F` UMBRELLA/EXCESS LIABILITY
I. Policy Limit Maximum
a. Per Occurrence $ 9,000,000 $10,000,000
b. Total Aggregate all claims $10,000,000 $14,000,000
G. CRIME
1. Self Insured Retention $ 5,000 $ 100,000
H. GENERAL TERMS
I. Three Year Premium Rate Guarantee Yes, if losses are less No
than 40% of total
premiums
F
Page 2 of 2
RISK
RESOURCES
Chart III
en-
City of Elgin
Summary of Total Retention Costs
for Property & Liability Insurance
Excluding Workers Compensation as of 6/30/98
Year Total Retention Costs
1997 $734,464
1996 138,951
1995 157,269
•
1994 441,673
1993 529,911
1992 501,908
SK ��
SOURCES
Chart IV
City of Elgin Premium Comparison for
1998-99 Excess Workers Compensation Proposals
1997-98
Current
Safety Safety Illinois Illinois Illinois
National National National National National
Option I Option II Option III
Premium $ 45,132 $ 19,197 $ 19,500 $ 21,330 $ 38,395
Retention 300,000 300,000 300,000 250,000 200,000
Rate .165 .063 . .064 .070 .126
RISK —1-1–•RESOURCES
Chart V
elab' City of Elgin
Workers Compensation Loss Experience
Years Developed Incurred Losses
1997 $ 764,307
1996 $ 494,129
1995 $1,086,120
1994 . $ 730,691
1993 $ 404,755
1992 $1,335,024
Average $ 802,504
—
RESOURCES
Chart VI
City of Elgin
1998-99 Workers Compensation Claim Handling Proposals
1997-98
Current CCMSI WCASC
CCMSI
1. Fees per claim:
a. Indemnity $ 625 $ 625 $ 595
b. Medical Only $ 100 $ 100 $ 85
c. Incident Report Only None None $ 85
2. Expected fees first year $35,250 $30,875 $30,175
Fees to handle claims open more than 1 year $ 6,150 $ 6,150 See Note I below
4. Administration Costs Included Included $ 4,700
5. Fees to handle open claims from prior years N/A N/A $ 7,000
Total Estimated Fees $41,400 $37,025 $41,875
Notes: (1) There will be no additional fees to handle open claims as long as the WCASC contract
remains in effect.
CLCIMWRILUM4C0013147 017
tSK
SOURCES
CITY OF EL GIN
150 DEXTER CT
ELGIN, IL 60120
I
I
PRESENTED BY:
RONALD PAVLIK
LUNDSTROM INSURANCE
OCTOBER 1, 1998-1999
INTRODUCTION OF THE AGENCY
For over four decades, Lundstrom Insurance has provided personal and commercial insurance
services to a diverse client base of prestigious individuals and organizations. An intense
commitment to personal services is the hallmark of Lundstrom Insurance's success.
Lundstrom Insurance's client service is driven by the commitment to building and
maintaining long-term relationships rather than short-term profits. Each client receives
ongoing services which enhance the function and cost-effectiveness of their insurance and
risk management programs.
In a proactive vein, Lundstrom Insurance has already positioned resources to develop and
market the next generation of insurance products and financial services. Lundstrom
Insurance professionals are on the leading edge as changes occur in the financial services
industry. Our well-trained professionals are dedicated to the highest standards of excellence.
By utilizing the broad knowledge, experience and creativity of these professionals,
lrLundstrom Insurance is able to provide a combination of sophisticated products and services.
The bottom line on Lundstrom Insurance's capabilities is clear: Protecting the assets and
earning power of your company from loss or destruction. The measure of our success is just
as straight forward: The minimization of adverse financial effects on your cash flow, Balance
Sheet and Profit and Loss Statement. We look forward to continue to demonstrate our
effectiveness as your broker and risk management partner.
I
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INTRODUCTION OF THE SERVICING TEAM
Lundstrom Insurance offers professional and experienced personnel, who stand ready at all
times to serve your organization in any capacity related to the insurance function. We strive
to attract high level employees that have demonstrated superior academic achievement,
reached a level of maturity to deal with complex problems, and have the desire to improve
through advanced training. We continually seek experienced personnel who can bring to us
unique skills and have developed a professionalism consistent with our high standards. Our
team approach allows us to provide dedicated and quality insurance, risk management and
claims service to all our clients. You are assured to receive the utmost in personal service.
We have organized the following service team approach:
1 Ron Pavlik - Account Executive. Supervision, as well as coordination, of the rest of the
staff serving their area of responsibility, lies with an agency principle. We assist your firm
with risk analysis including identification of exposures, recommend appropriate transfer of
risk, and proper use of self-insurance and/or deductibles. We believe risk analysis is at the
heart of your program.
Laura Barker - Account Executive. Maintainin g a proper relationship with insurance
P P P
company contacts in order to provide the best combination of protection is essential. We will
negotiate with companies for comprehensive coverages and fair pricing. The markets or
carriers which we use, are selected based on their financial integrity, market share as it relates
to particular coverages, and quality of local support staff.
Heather Friedel - Claims Representative. At the time of a loss, we assist to make sure that
the claim is presented in an appropriate and complete manner so that the loss settlement is fair
and satisfactory. We will provide pro-active assistance and support to you on all claims.
Whenever necessary, we will intervene in any coverage or monetary dispute between you and
an insurance carrier.
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RISK MANAGEMENT SERVICES PROVIDED
The Sales Risk Management Department of Lundstrom Insurance provides a variety of
services to meet the risk management needs of our diverse client base. These services
include, but are not limited to, the following:
• Risk analysis including identification of exposure, recommended appropriate transfer of
risk, and proper use of self-insurance and/or deductibles.
• Work on a team approach with a backup account executive and also an agency customer
service representative
• Prepare complete and accurate specifications to solicit the most comprehensive and
broadest coverages and programs available, in order to provide excellent value.
• Maintenance of a proper relationship with insurance companies. The markets or carriers
which we use are selected based on their financial integrity, market share as it relates to
particular coverages, and quality of local support staff.
eigh* • Work to "sell" your account to the insurance company underwriters by presenting the best
and most comprehensive picture of your account.
• Present the results of our efforts in a clear manner, and with the benefit of our experience
provide recommendations.
• Review all insurance provisions of leases, contracts, or other agreements, for adequacy,
compliance, and any additional cost or coverages that may be required, and recommend
modifications as needed and appropriate.
• Assist in negotiating insurance problems with landlords, tenants, contractors, consultants,
etc.
• The issuance of Certificates of Insurance, Automobile Identification Cards and other
insurance evidence as needed.
• Order any policy changes and upon receipt, again review for accuracy.
• Monitor and check each audit for accurate premium charges.
• Provide a "Schedule of Insurance" for easy reference of your coverages.
• At time of loss, we assist to make sure that the claim is presented in an appropriate and
complete manner so that the loss settlement is fair and satisfactory.
flibk • Be available when needed to assist in all of your insurance needs. We have specific
"backup" people assigned to your account.
I
PROPERTY INSURANCE
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
CAUSE OF LOSS FORM USED:
Special Form: Provides coverage against All Risk of direct physical loss or damage, except those
perils that are specifically excluded in the policy.
rbk
LOC# BLD# SUB. OF INS. AMOUNT COIN% DED. VALUATION
0
Blanket Real &Personal $99,799,027 100% $100,000 R/C
Property
Business Income $ 1,000,000 50% N/A
1 (Bartlett Water Supply)
Contingent Tax Intern. $ 8,750,000 50% N/A
(Elgin Riverboat)
Extra Expense $ 1,000,000
Personal Property Including $ 25,000
Inventory at Other Location
Electronic Data Processing, $ 1,354,827 (Class 9150/8150/145)
Media and Extra Expense
ir
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TERMS AND CONDITIONS:
Coverage includes:
Water Damage including back up of sewers
Flood (Excluding Flood Zone A)-Limit: $6,000,000
Earthquake-$16,000,000-Underground pipes
$ 6,000,000 -All Other Locations
Difference In Conditions -$ 70,000,000
Replacement Cost Valuation for real,personal property and computers
Actual Cash Value for auto and contractors equipment
100%valuation on real and personal property
Agreed Amount-waiver of co-insurance on real property,personal property,auto physical damage,
contractors equipment and computer equipment
Operation of building laws, increased costs of construction and demolition and debris removal
$100,000 deductible per claim except: *
1%for earthquake
Business income and extra expense:
Gross Earnings Fonn
30 days extended period of indemnity
50%valuation as respects Contingent Tax Interruption
Agreed Amount-coinsurance waived
Limit excludes ordinary payroll
* Deductibl of 25 00 0
e $ ,0 and$5 ,000 are available. See Premium Summary Page.
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INLAND MARINE
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
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' COVERAGE DEDUCTIBLE
Contractors Equipment $20,134,843 $1,000
Miscellaneous Equipment
$9,900,317 $1,000
(Vehicles)
Leased Equipment $500,000 $1,000
Radio &Emergency Equipment $7,273,968 $1,000
Accounts Receivable $250,000 $1,000
Valuable Papers $100,000 $1,000
Fine Arts $150,000 $1,000
Unscheduled Equipment $1,000,000 $1,000
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rik COMMERCIAL CRIME
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
COVERAGES LIMIT DED. *
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INSURING AGREEMENTS:
Blanket Public Employee Dishonesty $ 500,000 $ 5,000
Forgery or Alteration $ 500,000 $ 5,000
ro. Theft, Disappearance and Destruction
Sec. 1 -Inside the Premises $ 500,000 $ 5,000
Sec. 2 -Outside the Premises $ 500,000 $ 5,000
Money Order&Counterfeit Currency $ 500,000 $ 5,000
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COVERAGE ENDORSEMENTS:
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Faithful Performance Agreement applies
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*Optional Deductibles Available:
See Premium Summary Page
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COMMERCIAL GENERAL LIABILITY
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
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COVERAGE WRITTEN ON:
Occurrence Form
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I COVERAGE LIMITS
LIABILITY:
General Aggregate Limit $ 3,000,000
Products/Completed Operations Aggregate Limit $3,000,000
Personal/Advertising Injury Limit $2,000,000
Each Occurrence $2,000,000
Fire Damage Limit-Any One Fire $ 100,000
Medical Expense Limit-Any One Person $ 5,000
Law enforcement-each wrongful act $2,000,000
Law enforcement-annual aggregate $2,000,000
Liquor Liability -Per Occurrence $2,000,000
Aggregate $3,000,000
Medical Professional $2,000,000 •
Aggregate $3,000,000
Backup of Sewers &Drains(Third Party) $2,000,000
Failure to Supply $2,000,000
SIR $150,000 Applies to bodily injury and property damage,per occurrence
$750,000 Combined aggregate for General Liability,Auto Liability, Public Officials
Liability and Law Enforcement Liability
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• COVERAGES INCLUDED:
Premises/Operations
Products/Completed Operations
Independent Contractors
Blanket Contractual Liability
Host Liquor Liability
Employee as Additional Insured
Broad Form Property Damage
Incidental Medical Malpractice
Limited Worldwide Liability (suits in U.S.)
Automatic Coverage -Newly Acquired Organization(90 days)
Public Executive Officers are Protected Persons
Employee Benefits Liability (each claim and aggregate)
Claims Made Coverage
Limits: $1,000,000 each claim
$3,000,000 aggregate
1 Deductible: $ 1,000
Retroactive Date: 10/01/87
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Note:All pollution is Preluded
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COMMERCIAL AUTOMOBILE
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
COVERAGE LIMIT PER
LIABILITY:
Bodily Injury and Property Damage $ 2,000,000 CSL Each Accident
Medical Payments $ 5,000 Each Person
ellik SIR $ 150,000 Self Insured Retention
$ 750,000 Combined Aggregate
SIR for Auto Liability,
General Liability, Public
Officials Liability and
Law Enforcement Liability
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COVERAGE APPLICABLE TO
Liability: Any Auto
Hired Autos &Non Owned Automobile
Medical Payments: All Owned Autos
Comprehensive: All Owned Autos
Collision: All Owned Autos
COVERAGE ENDORSEMENTS:
Note: Uninsured/Underinsured Liability Coverage is excluded.
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BOILER & MACHINERY
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1 Insured: City Of Elgin
Insurer: Hartford Steam Boiler
Policy Term: 10/01/98 To 10/01/99
COVERAGES LIMITS PER
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ILIMITS OF INSURANCE:
Direct Damage & $16,000,000 Any One Accident
Extra Expense $1,000 * Deductible
IBusiness Interruption $100,000 24 Hour Deductible Applies
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$2,000 deductible on sewage/water treatment facilities
Expediting Expenses $35,000
IHazardous Substance Limitation $35,000
IAmmonia Contamination Limitation $35,000
Water Damage Limitation $35,000
Consequential Damage,Food &Food Products $35,000
(Solely While in Storage)
JUtility Interruption Coverage Limited to:
Transformers&NonRotating Electrical Apparatus Only Providing Electricity -0 Hour Deductible
IJoint Loss Agreement Clause
COVERAGE INCLUDES
kb' Perils: Heating, air conditioning, cooling, freezers, boilers, 1. Electrical
Injury including miscellaneous electrical apparatus panels,generators,
I artifically generated current motors,etc.
Mechanical breakdown
Explosion of steam vessels and piping
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UMBRELLA LIABILITY'
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
COVERAGE LIMIT PER
Limit of Liability $ 7,000,000* Each Occurrence
$ 7,000,000 Annual Aggregate
Self Insured Retention $ 10,000
PRIMARY COVERAGES:
1 Commercial Liability $ 2,000,000 Each Occurrence
$ 3,000,000 General Aggregate
1 $ 3,000,000 Products Aggregate
$ 2,000,000 Personal Injury
$ 100,000 Fire Damage Liability
Auto Liability $ 2,000,000 Combined Single Limit
Employers Liability $ 1,000,000 Each Accident
$ 1,000,000 Disease Policy Limit
I $ 1,000,000 Disease Each Employee
Employee Benefits Liability $ 1,000,000 Each Claim
1 $ 3,000,000 Aggregate
Law Enforcement Liability $ 2,000,000 Farh Wrongful Act
I $ 2,000,000 Annual Aggregate
Public Officials Liability $ 2,000,000 Each Claim/Annual Agg.
Liquor Liability $ 2,000,000 Each Occurrence
$ 3,000,000 Aggregate
*Increased Limits Available
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PUBLIC OFFICIALS LIABILITY
Insured: City Of Elgin
Insurer: St. Paul Insurance Company
Policy Term: 10/01/98 To 10/01/99
COVERAGE WRITTEN ON:
Claims Made Form
Retroactive Date: 10/01/87
$750,000 Combined Aggregate SIR for General Liability,Auto Liability, Public Officials Liability and
Law Enforcement Liability
COVERAGE LIMITS
LIABILITY:
Each Claim/Annaul Aggregate Limit $2,000,000
Self Insured Retention: $ 100,000
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SPECIFIC EXCESS WORKERS COMPENSATION
Insured: City Of Elgin
Insurer: Safety National Casualty- Option I
Policy Term: 10/01/98 To 10/01/99
WORKERS COMPENSATION BENEFITS (A): STATUTORY
States: Illinois
EMPLOYERS LIABILITY(B):
$1,000,000. E4 ACCIDENT
1 $1,000,000. POLICY LIMIT
$1,000,000. EA EMPLOYEE
PREMIUM BASIS: $30,471,300.
OPTION A OPTION B OPTION C
$300,000 Ea Accident $275,000 Ea Accident $250,000 Ea Accident
RETENTION $300,000 Policy Limit $275,000 Policy Limit $250,000 Policy Limit
$300,000 Ea Employee $275,000 Ea Employee $250,000 Ea Employee
RATE .063 Per 100 Payroll .136 Per 100 Payroll .154 Per 100 Payroll
PREMIUM $19,197 $41,441 $46,926
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SPECIFIC EXCESS WORKERS COMPENSATION
Insured: City Of Elgin
Insurer: Illinois National Insurance Company- Option II
Policy Term: 10/01/98 To 10/01/99
WORKERS COMPENSATION BENEFITS (A): STATUTORY
States: Illinois
I EMPLOYERS LIABILITY(B):
$1,000,000. EA ACCIDENT
$1,000,000. POLICY LIMIT
$1,000,000. EA EMPLOYEE
IPREMIUM BASIS: $30,471,300.
OPTION A OPTION B OPTION C
$300,000 Ea Accident $250,000 Ea Accident $200,000 Ea Accident
RETENTION $300,000 Policy Limit $250,000 Policy Limit $200,000 Policy Limit
$300,000 Ea Employee $250,000 Ea Employee $200,000 Ea Employee
RATE .064 Per 100 Payroll .07 Per 100 Payroll .126 Per 100 Payroll
PREMIUM $19,500 $21,330 $38,395
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PREMIUM COMPARISON
Sr. PAUL, HARTFORD, SAFETY NATIONAL
OPTION l
EXPIRING RENEWAL
PREMUM PREMUM
W/5750,000 W/$750,000
COVERAGE BASKET BASKET
Property+ [$100,000 SIR] 60,193 226,091
' Inland Marine [$100,000 Deductible] 39,372 26,135
Crime [S 5,000 Deductible] 4,888 4,888
General Liability [$150,000 SIR] 91,953 Included
I Liquor Liability ($150,000 SIR] Included Included
Law Enforcement Liability [$150,000 SIR] 64,599 Included
Paramedic Liability [$150,000 SIR] Included Included
I Public Entity Management Liability [$100,000 SIR] 23,158 Included
Auto Liability++ [150,000 SIR] 28,880 Included
Auto Physical Damage [$1,000 Deductible] Included Included
I Umbrella Liability 56,000 35,000
Claims Administration 32,548 32,548
(excluding Workers Compensation)
ISt. Paul Total $401,591 $324,662
Boiler&Machinery-Hartford Steam Boiler $9,396 $9,396
IExcess Workers Compensation- Safety National 45,132 $19,197
IWorkers Compensation Claims Administration $35.250 $30,875
TOTAL PROGRAM COST: $491,369. $384,130
I +Property Values changed by$651,432 from expring
++Renewal exposure rated on 294 vehicles ,expiring based on 301 vehicles
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PREMIUM COMPARISON
ST. PAUL, HARTFORD, SAFETY NATIONAL
OPTION II
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EXPIRING RENEWAL
PREMUM PREMUM
W/$750,000 W/$500,000
COVERAGE BASKET BASKET
Property+
[$50,000 SIR] 60,193 256,091
Inland Marine [$100,000 Deductible] 39,372 26,135
Crime [$ 5,000 Deductible] 4,888 4,888
1 General Liability [$100,000 SIR] 91,953 Included
Liquor Liability ($100,000 SIR] Included Included
Law Enforcement Liability [$100,000 SIR] 64,599 Included
I Paramedic Liability [$100,000 SIR] Included Included
Public Entity Management Liability [$100,000 SIR] 23,158 Included
Auto Liability++ [100,000 SIR] 28,880 Included
I Auto Physical Damage [$1,000 Deductible] Included Included
Umbrella Liability 56,000 35,000
r Claims Administration 32,548 32,548
(excluding Workers Compensation)
St. Paul Total $401,591 $354,662
IBoiler&Machinery-Hartford Steam Boiler $9,396 $9,396
Excess Workers Compensation- Safety National 45,132 $19,197
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Workers Compensation Claims Administration $35.250 $30,875
TOTAL PROGRAM
COST: $491,369. $414,130
+Property'Values changed b y$651,432 2 from expring
++Renewal exposure rated on 294 vehicles ,expiring based on 301 vehicles
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PREMIUM COMPARISON
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T. PAUL HARTFORD SAFETY NATIONAL
OPTION III
EXPIRING RENEWAL
PREMUM PREMUM
W4750,000 W4350,000
CO VERAGE BASKET BASKET
Property+ [$50,000 SIR] 60,193 268,859
Inland Marine [$100,000 Deductible] 39,372 26,135
Crime [S 5,000 Deductible] 4,888 4,888
General Liability [$75,000 SIR] 91,953 Included
Liquor Liability [$75,000 SIR] Included Included
Law Enforcement Liability [$75,000 SIR] 64,599 Included
Paramedic Liability [$75,000 SIR] Included Included
Public Entity Management Liability [$75,000 SIR] 23,158 Included
Auto Liability++ [$75,000 SIR] 28,880 Included
Auto Physical Damage [$1,000 Deductible] Included Included
Umbrella Liability 56,000 35,000
Claims Administration 32,548 32,548
(excluding Workers Compensation)
St. Paul Total $401,591 $367,430
Boiler&Machinery -Hartford Steam Boiler $9,396 $9,396
Excess Workers Compensation- Safety National 45,132 $19,197
Workers Compensation Claims Administration $35,250 $30,875
TOTAL PROGRAM COST: $491,369. $426,898
+Property Values changed by $651,432 from expring
++Renewal exposure rated on 294 vehicles ,expiring based on 301 vehicles
PREMIUM COMPARISON - RANGERIAL.LIANZ
PENCO'
COVERAGE
Property+ ($100,000 Deductible] $58,050
Inland Marine [$100,000 Deductible] Included
Crime Not Provided
General Liability [$200,000 SIR] $225,000
Liquor Liability [$200,000 SIR] Included
Law Enforcement Liability [$200,000 SIR] $45,000
Paramedic Liability [$200,000 SIR] Included
Public Entity Management Liability [$200,000 SIR] $28,000
I oft, Auto Liability ($200,000 SIR] Included
Auto Physical Damage [$50,000 Deductible] Included
Umbrella Liability Included
Claims Administration-WCASC Indication
Option I $67,240
Subtotal: $423,290
Boiler& Machinery-Hartford Steam Boiler $9,396
Excess Workers Compensation- $300 000 SIR]( � ] Included
Lundstrom Subtotal: $432,686
TOTAL PROGRAM COST:
1) Difference in conditions. Crime coverages are Not Provided
1 2) There is no Basket SIR or Stop Loss Aggregate
3) Maximum limit provided-S million aggregate
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PREMIUM COMPARISON - COREGIS
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PREMIUM
W/$670,000
COVERAGE BASKET
Property+ [$25,000 SIR] 326,732
Inland Marine [$100,000 Deductible] Included
Crime [$100,000 Deductible] Included
General Liability [$100,000 SIR] Included
Liquor Liability [$100,000 SIR] Included
Law Enforcement Liability [$100,000 SIR] Included
Paramedic Liability [$100,000 SIR] Included
Public Entity Management Liability [$100,000 SIR] 41,408
Auto Liability [$100,000 SIR] Included
Auto Physical Damage [$1,000 Deductible] Included
Umbrella Liability $11,280
Claims Administration -WCASC Indication
(Option I) $67.240
Coregis Total $446,660
Boiler&Machinery Included
Excess Workers Compensation -Safety National $19.197
TOTAL PROGRAM COST: $465,857
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Earthquake coverage for underground piping is NOT INCLUDED
*Policy exclusions for umbrella: Professional Liability,y,Arcluteetual Engineers & Surveyors, Molestation or Sexual
Abuse, ERISA, Real &Personal Property in the Insureds Care, Custody &Control,Asbestos, Inverse
Condemnation
Nuclear, Injury to Volunteer Firemen, Uninsured/Underinsured Motorist
Pollution Indication: 1 million w/$10,000 deductible=6,000+T&F
1 million w/$25,000 deductible=5,400+T&F
2 million w/$10,000 deductible= 7.500+T&F
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PREMIUM COMPARISON - S.J. PETRAKIS/ROYAL
PREMIUM
W4450,000
COVERAGE STOP LOSS
Property+ [$100,000 Deductible] 50,225
Inland Marine [$100,000 Deductible] Included
Crime Not Provided
General Liability [$150,000 SIR] 199,234
Liquor Liability [$150,000 SIR] Included
Law Enforcement Liability [$150,000 SIR] Included
Paramedic Liability [$150,000 SIR] Included
Public Entity Management Liability [$150,000 SIR] Included
Auto Liability ($150,000 SIR] Included
Auto Physical Damage [$100,000 Deductible] Included
Umbrella Liability Included
Claims Administration-WCASC Indication
(Option I) $67,240
Royal Total: $316,699
Boiler&Machinery-Hartford Steam 9,396
Excess Workers Compensation-Safety National $19,197
TOTAL PROGRAM COST: $345,292
This proposal does not include the following:
Environmental Liability, Crime,Treasurer's Surety, City Managers Surety Bond, Coverage for"Dams".
The exclusion for Dams may be deleted upon receipt of updated engineering reports,downstream exposure,
inspection reports,maps and hazard rating of the dam. Revised pricing and terms may be applied.
Property terms are subject to receipt of underwriting information consisting of age of buildings, construction type,
protection devices i.e. sprinkelered, smoke alarms,detectors etc.
A premium payment plan is not available for the Royal proposal. Hartford and Saftey National payment terms
remain as previously presented.
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