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Agenda 09/09/2025 Item #16E 2 (The purchase of excess workers’ compensation insurance for FY 2026 through Arch Insurance Company)9/9/2025 Item # 16.E.2 ID# 2025-2759 Executive Summary Recommendation to approve the purchase of excess workers’ compensation insurance for FY 2026 through Arch Insurance Company with an estimated annual cost of $265,393. 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, Risk Management 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 meet statutory requirements. Claims are administered by Davies North America. Brown and Brown is the County’s contracted broker of record for the program. The current carrier is Arch Insurance Company with coverage expiring September 30, 2025. Due to a favorable loss experience, the County qualified for the 2nd year rate guarantee. Therefore, marketing of the excess workers’ compensation statutory coverage policy was not performed this year. Staff recommends the placement of coverage with Arch Insurance Company as follows: FY 2025 FY 2026 Change Estimated Ratable Payroll $213,695,207 $223,960,304 4.80% Rate per $100 of Payroll 0.1185 0.1185 0% Premium $253,229 $265,393 4.80% The significant highlights of the FY 2026 renewal are as follows: • Estimated ratable payroll increased 4.80% • The rate per $100 of payroll remains the same as FY 2025 • Overall premium compared to FY 2025 is estimated to increase $12,164 • The increase in overall premium is exclusively due to the increase in ratable payroll rather than an increase in rate per $100 of payroll. 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, 2025. This item is consistent with the Collier County strategic plan objective to safeguard taxpayer money by promoting fiscal stewardship and sound budget oversight. FISCAL IMPACT: The estimated annual premium is $265,393. Sufficient funds have been budgeted within Fund 5018 (Workers’ Compensation Fund) for this purchase. 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 a majority vote for approval. -JAK RECOMMENDATIONS: To approve the purchase of excess workers’ compensation coverage and authorize the County Manager or designee to complete the applications or other documents necessary to bind coverage, effective October 1, 2025.. Page 1587 of 2661 9/9/2025 Item # 16.E.2 ID# 2025-2759 PREPARED BY: Greily Gonzalez, Risk Manager ATTACHMENTS: 1. Collier 10-1 Work Comp Executive Summary 25-26 2. Collier 10-1 Work Comp Premium Comparison Page 1588 of 2661 1 | P a g e As of 8/19/2025 Public Sector Collier County Board of County Commissioners, et al Executive Summary – 10/1/25-26 Insurance Renewals Excess Workers Compensation Overview • 2nd term of 2-Year Rate Guarantee » 2025 marketing offered flat rate renewal per $100/payroll as a result of carrier relationship • 10/1/25-26 is fourth year of flat rates despite increasing market conditions • Payroll increase of 4.8% • Overall Premium increase 4.8% • Approximate rate of $0.12 per $100 in payroll Insurance Renewal Program 2024/2025 2025/2026 Difference LINE OF COVERAGE ANNUAL PREMIUM ANNUAL PREMIUM $ % Excess Workers Comp $253,229.00 $265,393.00 $12,164.00 4.80% Renewal Summary The County qualified for the 2nd year rate guarantee as offered during the last renewal. Therefore, marketing of the Excess Workers Compensation “Statutory” coverage policy was not performed this year. Page 1589 of 2661 2 | P a g e As of 8/19/2025 Insurance Market Conditions Workers’ Compensation Market Conditions The workers’ compensation space remains a soft and stable market. Depending on loss activity and experience modifications, renewal rates range from flat to 5%. Impacts Carriers are focused on pre-quote loss control to qualify accounts. Insureds can adapt by focusing on risk management practices and loss control. When considering best practices for risk management, a great place to start is talent acquisition and safety programs. Legislative Impacts Senate Bill 362 – Chapter No. 2024-241 The bill increases the maximum medical reimbursements for physicians and surgical procedures and the maximum fees for expert witnesses under Ch. 440, F.S., the “Workers Compensation Law” (law). The law requires employers to provide injured employees all medically necessary remedial treatment, care, and attendance for such period as the nature of the injury or the process of recovery may require. The bill increases the maximum reimbursement allowances (MRA) for physicians licensed under Ch. 458, F.S., or Ch. 459, F.S., from 110 percent to 175 percent of the reimbursement amount allowed by Medicare and increases the MRA for surgical procedures from 140 percent to 210 percent of reimbursement amount allowed by Medicare. In regard to expert medical witnesses, the law currently limits the amount health care providers can be paid for expert testimony during depositions on a workers’ compensation claim to $200 per hour, unless they only provided an expert medical opinion following a medical record review or provided direct personal services unrelated to the case in dispute, in which case they are limited to a maximum of $200 per day. The bill increases the maximum hourly amount allowed for expert witnesses to $300 per hour. If an expert witness is subject to the daily rate, the maximum amount allowed is increased to $300 per day. These provisions took effect January 1, 2025. Page 1590 of 2661 Covered Party:Collier County BOCC Effective Date:10/1/2025 Version Date:8/18/2025 Coverage & Premium Comparison 2024/2025 LINE OF COVERAGE LIMIT SELF-INSURED RETENTION Excess Workers' Compensation:2-Year Rate Guarantee Extension Offered Arch Insurance Company Through 25/26 Excess Workers' Compensation Statutory $600,000 Employers Liability $3M / $3M / $3M $600,000 Limited Jones Act Coverage $1,000,000 $600,000 Limited USL&H Coverage $1,000,000 $600,000 Sub-Total TOTAL PREMIUM Page 1591 of 2661 2025/2026 ANNUAL PREMIUM LIMIT SELF-INSURED RETENTION ANNUAL PREMIUM 2-Year Rate Guarantee Extension Offered Through 25/26 $253,229 Statutory $600,000 $265,393 $3M / $3M / $3M $600,000 $1,000,000 $600,000 $1,000,000 $600,000 $253,229 Sub-Total $265,393 $253,229 TOTAL PREMIUM $600K SIR $265,393 $ Difference $12,164 % Difference 4.80% Coverage & Premium Comparison 2024/2025 2-Year Rate Guarantee Extension Offered Through 25/26 Page 1592 of 2661 Changes in Exposures 2024/2025 2025/2026 Payroll $213,695,207 $223,960,304 Exposure Difference $10,265,097 4.80% Keller Online Resource Premium Difference $12,164 4.80% Coverage & Premium Comparison Page 1593 of 2661