Agenda 09/22/2020 Item #16E 5 (Purchase Excess Workers' Comp Insurance for FY 2021)16.E.5
09/22/2020
EXECUTIVE SUMMARY
Recommendation to approve the purchase of Excess Workers' Compensation Insurance for FY
2021 with Arch Insurance Company in the estimated annual amount of $169,550.72.
OBJECTIVE: To protect the County against financial loss arising from Workers' Compensation related
claims and lawsuits and to comply with the statutory requirements of Florida Statutes Chapter 440.
CONSIDERATIONS: Pursuant to Florida Statutes Chapter 440, the Risk Management Division
administers a self -funded Workers' Compensation program. The self -insured retention is $600,000 per
claim. The County purchases excess coverage to protect the program against catastrophic losses. The
coverage limits comport to statutory requirements. Claims are administered by Johns Eastern Company.
Insurance and Risk Management Services (IRMS) is the County's contracted broker of record for the
program. The current carrier is Arch Insurance Company with coverage expiring September 30, 2020.
The significant highlights of the FY 2021 renewal are as follows.
Projected ratable payroll increased 1.7%
The rate per $100 increased 4.9%
Beginning January 1, 2020, the Florida Worker's Compensation Guaranty Association
implemented a 1% surcharge on all Worker's Compensation premiums.
Staff recommends the placement of coverage with Arch Insurance Company as follows:
FY 20
FY 21
Change
Ratable Payroll
$150,737,226
$153,308,009
1.7%
Rate per $100
.1043
.1095
4.9%
Premium
$157,219.00
$169,550.72
7.8%
Five additional carriers were approached; however, their responses were not competitive. Their
responses were as follows:
• Midwest Employers Casualty Company - proposed a premium of $173,886.65.
• Safety National - Declined to quote, saying they cannot compete with the Arch pricing.
• Star - Declined to quote a public entity exposure.
• Travelers - Declined to quote.
• ACE - Requires a minimum premium is $200,000.
Arch Insurance Company carries a Best's financial rating of "A+, Superior". No program changes are
recommended. The commencement date of coverage is October 1, 2020.
FISCAL IMPACT: The estimated annual premium is $169,550.72. Sufficient funds have been budgeted
within Fund 518, Workers' Compensation Insurance to purchase coverage.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, raises no legal
issues, and requires majority vote for approval. -JAK
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RECOMMENDATION: To approve the purchase of Workers' Compensation coverage as outlined in
the Executive Summary and authorize the County Manager or designee to complete the applications or
other documents necessary to bind coverage effective October 1, 2020.
Prepared by: Jeffrey A. Walker, CPCU, ARM, Division Director, Risk Management Division
ATTACHMENT(S)
1. FY 21 Workers Compensation Renewal Summary (PDF)
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COLLIER COUNTY
Board of County Commissioners
Item Number: 16.E.5
Doe ID: 13369
Item Summary: Recommendation to approve the purchase of Excess Workers' Compensation
Insurance for FY21 with Arch Insurance Company in the estimated amount of $169,550.72.
Meeting Date: 09/22/2020
Prepared by:
Title: — Risk Management
Name: Carleton Case
08/25/2020 10:23 AM
Submitted by:
Title: Division Director - Risk Management — Risk Management
Name: Jeff Walker
08/25/2020 10:23 AM
Approved By:
Review:
Administrative Services Department
Risk Management
Administrative Services Department
Office of Management and Budget
Office of Management and Budget
County Attorney's Office
County Manager's Office
Board of County Commissioners
Paula Brethauer Level 1 Department Reviewer
Jeff Walker
Additional Reviewer
Len Price
Level 2 Department Head Review
Debra Windsor
Level 3 OMB Gatekeeper Review
Laura Wells
Additional Reviewer
Jeffrey A. Klatzkow Level 3 County Attorney's Office Review
Sean Callahan
Level 4 County Manager Review
MaryJo Brock
Meeting Pending
Completed
08/25/2020 3:59 PM
Completed
08/26/2020 7:57 AM
Completed
09/08/2020 3:33 PM
Completed
09/08/2020 3:37 PM
Completed
09/08/2020 4:41 PM
Completed
09/09/2020 12:49 PM
Completed
09/14/2020 2:40 PM
09/22/2020 9:00 AM
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11RIMISO
Insurance and Risk
Management Services, Inc®
An AssuredPartners Agency
August 24, 2020
Mr. Jeff Walker, Director of Risk Management
Mr. Carleton Case, Risk Finance Manager
Collier County Government Risk Management Department
3311 Tamiami Trail East, #D
Naples, FL 34112
Client:
Collier County Government Risk Management Department
Subject:
October 1, 2020 Casualty Renewal
Polio Type:
Excess Workers' Compensation
Company:
Arch Insurance Company
Policy Term:
10/01/20 to 10/01/21
Dear Jeff and Carleton:
To summarize the renewal of the 10/01/20 Excess workers Compensation.
1. The Worker's Compensation limit will be statutory, the Employer's Liability limit $3,000,000 and
the Self -Insured Retention $600,000.
2. The rate will increase by 5% from $0.1043 to $0.1095. The estimated payroll has increased by 1.7%
from $150,737,226 to $153,308,009.
3. Beginning January 1, 2020, the Florida Worker's Compensation Guaranty Association implemented
a 1% surcharge on all Worker's Compensation premiums.
4. With the combination of the rate increases and the exposure increase, the premium is increasing by
7.8% from $157,219 to $169,550.72.
5. The primary reason for the rate increase is the increase in aircraft exposure (two helicopters, one
primary and one backup) plus the increase in the carrier's reinsurance costs.
6. A 2-year guaranteed rate option is not available for this renewal.
7. Arch will be removing the Communicable Disease endorsement at renewal. This endorsement
clarified that for "bodily injury by disease, caused by the same communicable disease", the self -
insured retention would apply per occurrence instead of per employee. For renewal, Arch will
continue to provide coverage for communicable disease but the self -insured retention would apply
separately to each employee.
Other Workers Compensation markets approached:
1. Midwest Employers Casualty Company — proposed a premium of $173,886.65
2. Safety National — declined saying they cannot compete with the Arch pricing
3. Star — declined to quote public entity exposure
4. Travelers — not a market as Johns Eastern is not an approved TPA
5. ACE — not a market as their minimum premium is $200,000
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6. No market was willing to offer a 2 year rate guarantee
Please let us know if you have any questions.
Sincerely,
Bill
William H. Kuhlman, CPCU, ARM-P
Vice President
Bob
Robert E. Thorngate, CPCU, ARM
Senior Account Executive
AAssuredPartners
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IRMSinc.com 1 239-649-1444 1 8950 Fontana Del Sol Way, Suite 200 1 Naples, FL 34109
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