Agenda 09/23/2008 Item #10EItem # 10E
September 23, 2008
Page 1 of 5
EXECUTIVE SUMMARY
Recommendation to approve the purchase of Liability, Automobile, Workers'
Compensation, Flood, Aircraft, and other insurance and related services for FY 2009 in
the amount of $1,867,006, a reduction of $391,644.
OBJECTIVE: To gain approval from the Board to purchase Liability, Automobile, Workers'
Compensation, Flood, Aircraft, and other insurance and related services for FY 2009 in the amount of
$1,867,006, a reduction of $391,644.
CONSIDERATIONS: Pursuant to Florida Statutes 768.28 and 440, the Risk Management
Department administers two risk management funds (Fund 516 and Fund 518) to finance its Property,
Casualty and Workers' Compensation insurance programs. These programs consist of retained
losses; first dollar, primary and excess insurance premiums; claims administration services; brokerage
services; and other ancillary services necessary to administer the program. The various lines of
insurance covered under these programs include Property; Flood; Equipment Breakdown; General
Liability; Public Officials Liability; Crime and Employee Dishonesty; Automobile Liability; Automobile
Physical Damage; limited Uninsured Motorist; Boiler and Machinery; Aircraft Hull and Liability; Airport
Liability; Pollution Liability; Contingent Law Enforcement; Medical Malpractice; Statutory Accidental
Death; and Excess Workers' Compensation.
An extensive review is performed periodically to assure that the County's insurance program is both
comprehensive and competitive. For 2009, staff reviewed several options to evaluate the effect on
program cost of higher deductibles and the elimination of aggregate excess coverage.
The current program consists of a primary coverage layer; excess layers; and stand alone policies to
cover the various exposures of the County. The primary layer of coverage utilizes the Princeton
Excess All Lines Aggregate (ALA) program to provide General Liability, Public Officials Liability,
Automobile Liability, Crime, and Workers' Compensation insurance. The County retains the first
$100,000 per claimant/$200,000 per occurrence for each claim presented with the exception of
Workers' Compensation which has a $350,000 per claim retention. The program also offers
aggregate coverage to protect the County against adverse loss experience. Claims are administered
through John Eastern Company as an approved claims administration company for the ALA program.
To assure sufficient coverage limits, the county purchases Excess General Liability, Excess Public
Officials Liability, Excess Automobile Liability, Excess Crime, and Excess Workers' Compensation
coverage to protect against large losses; a cause of action not limited by a sovereign immunity cap
(such as employment practices); or a claims bill pursuant to F.S. 768.28.
In addition to the programs above, individual policies are purchased for Equipment Breakdown,
Aircraft, Airport Liability, Pollution Liability, Medical Malpractice, Contingent Law Enforcement and
Statutory Accidental Death.
For FY 2009 staff reviewed several options to reduce premium costs and the following options are
recommended:
1) Increase the self- insured retention on Workers' Compensation claims from $350,000 to
$500,000- There have not been any claims in the $350,000 to $500,000 range since 1997.
The annual premiums savings is approximately $60,000 per year.
2) Eliminate Aggregate Excess Coverage- The
aggregate retention has been met only one
premium savings is approximately $101,000.
Item # 10E
September 23, 2008
Page 2 of 5
current program is adequately funded and the
time during the past 15 years. The annual
The significant highlights of the FY 09 renewal are as follows.
• Total Premiums and Fixed Costs- Total premiums and fixed costs decreased 17.34% or
$391,644.
• Expected Retained Losses- Pursuant to the 9/30/07 actuarial evaluation, expected losses for
all lines of coverage are up 5.66 %.
❑ Total Program Cost- Total cost consisting of fixed costs and retained losses is down
$257,644 or 5.57 %.
The property insurance program renews on April 1, 2008 and is not included in this recommendation.
A complete renewal summary sheet is attached as part of this submission.
FISCAL IMPACT: Total premiums and fixed costs are $1,867,006, a reduction of $391,644. Funds
have been budgeted within Funds 516, Property and Casualty Insurance and Fund 518, Workers'
Compensation Insurance for the purchase of coverage as outlined in the executive summary and
renewal summary sheet.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
item.
LEGAL CONSIDERATIONS: There are no legal considerations associated with this item.
It is recommended that the Board approve the following:
1) Approve the purchase of the Princeton Excess ALA Program and additional excess insurance
coverage as outlined in the executive summary and casualty renewal summary sheet.
2) Approve the purchase of Aircraft, Airport Liability, Equipment Breakdown, Crime, Pollution Liability,
Statutory Accidental Death, and Contingent Law Enforcement Liability coverage as outlined in the
Executive Summary and Casualty Renewal Summary Sheet effective October 1, 2008.
3) Approve the rejection of Uninsured Motorist Insurance with the exception of scheduled take home
vehicles, authorizing the Risk Management Director to execute the necessary rejection forms.
4) Approve the rejection of a Terrorism Endorsement on all coverage except property, authorizing the
Risk Management Director to execute any necessary forms. Terrorism coverage is purchased as
part of the Property Insurance renewal.
5) Authorize the Risk Management Director to complete the applications or other documents
necessary to bind coverage and services effective October 1, 2008.
PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management Department
Item # 10E
September 23, 2008
Page 3 of 5
To gain approval from the Board of Commissioners to purchase Liability, Automobile,
Workers& #8217; Compensation, Flood, Aircraft, and other insurance and related services for FY
2009 in the amount of $1,867,006, a reduction of $391,644. (Jeff Walker, Risk Management Director)
Prepared By:
Department Date
Risk Management 9/8/2008 8:46:26 AM
Approved By:
Department Approval Date
Administrative
Services Disapproved 9/8/2008 4:58 PM
Approved By:
Department Approval Date
Risk
Management Approved 9/9/2008 8:44 AM
Approved By:
Department Approval Date
Adminstrative
Services Approved 9/9/2008 11:47 AM
Approved By:
Department Approval Date
Office of
Management Approved 9/11/2008 6:14 PM
and Budget
Approved By:
Department Approval Date
County Approved 9/13/2008 10:12 AM
Manager's Office
ATTACHMENTS:
Name:
❑ Executive Summarv-
Casualty Renewal- September
2008.doc
Description:
Executive Summary Casualty Insurance Renewal FY 09
Item # 10E
September 23, 2008
Page 4 of 5
Type:
Executive Summary
Casualty Renewal Summary Sheet FY 2009 Backup Material
200 .xls
Collier County Government
FY 09 Casualty Insurance
Renewal
Item # 1OE
September 23, 2008
Page 5 of 5
Policy Type
FY 08 Premium
Projected FY 09 Premium
% Change
FY 09 Deductibles
Carrier(s)
('After Adjustments for FY
09 Exposure Changes)
All Lines Aggregate
$ 863,736
S 701,950
- 18.73%
$100,000 per person /$200,000
Princeton
Limits Purchased:
$1,000,000 General
$1,000,000 General
per occurrence for General
Excess and
$1,000,000 Auto Liability
$1,000,000 Auto Liability
Liability, Automobile Liability and
Surplus
$1,000,000 Public
$1,000,000 Public Officials
Public Officials Liability; $100,000
$ 600,000 Workers
$600,000 Workers Comp
for Crime; $500,000 for Workers'
$1,000,000 Crime
$1,000,000 Crime
Comp
Excess Liability
$ 220,787
$ 216,128
-2.11%
$1,000,000 General Liability
Princeton
Limits Purchased:
$1,000,000 General
$1,000,000 General
$1,000,000 Public Officials
Excess and
Liability
Liability
Surplus
$4,000,000 Public
$4,000,000 Public Officials
Excess Crime (Employee
$ 13,840
$ 20,000
44.51%
$1,000,000
Hartford
Dishonesty)
Insurance
Limits Purchased:
$4,000,000 Employee
$4,000,000 Employee
Dishonesty
Dishonesty
$1,000,000 Faithful
$1,000.000 Faithful
Excess Workers' Comp:
$ 240,635
$ 168,397
- 30.02%
$600,000
Midwest
Limits Purchased:
Statutory
Statutory
Employers
Reported Payrolls (est):
$119,599,996
$119,599,996
Rate per $100 Payroll:
0.2012
0.2419
Equipment Breakdown
$ 35,421
$ 36,252
2.35%
$25,000
Hartford
Limits Purchased:
$50,000,000 occurrence
$50,000,000 occurrence
Steam Boiler
Statutory Accidental
$ 22,839
$ 22,839
0.00%
None
Hartford
Death
Insurance
Limits Purchased:
Statutory
Statutory
Pollution Liability
$ 110,163
$ 104,948
-4.73%
$100,000 per loss
Greenwich
Limits Purchased:
$2,000,000 each loss
$2,000,000 each loss
Insurance
$4,000,000 aggregate
$4,000,000 aggregate
Flood Insurance
$ 173,747
$ 173,747
0.00%
$500 to $2,000
National Flood
Limits Purchased:
Actual Cash Value or
Actual Cash Value or
Insurance
Maximum Available
Maximum Available
Program
Automobile /Mobile
$ 128,259
$ -
- 100.00 %$50,000
Princeton
Equipment Damage
Excess and
Limit Purchased
$1,000,000
$1,000,000
Surplus
Maritime Employers
$ 16,552
$ 25,000
51.04%
$10,000
Underwriters at
Liability
Lloyds
Limits Purchased:
5110001000
$1,000,000
Excess Maritime
$ 15,000
$ 20,000
33.33%
$1,000,000
National
Employers Liability
Indemnity
Limits Purchased:
$4,000,000
$4,000,000
Johns Eastern Claims
$ 122,737
$ 77,000
• 37.26%
Third Party Adjusting Fee
NA
Adjusting Fee:
Claims Processed:
300 Claims Minimum
160 Workers Comp; 66 other
Lines M,nlmum and Deposit
Brokerage Flat Fee (in
$ 157,500
$ 165,375
5.00%
Pursuant to Contract
NA
lieu of commissions)
Aircraft Insurance
$ 87,512
$ 86,205
-1.49%
$50,000 Rotors in Motion/ $1,000
Starr Aviation
(Helicopter)
Rotors Not in Motion
Limits Purchased:
$3,500,000 Hull Value
$3,500,000 Hull Value
$10,000,000 Liability
$20,000,000 Liability
$500,000 Admitted
$500,000 Admitted
Liability/Seat;
Liability/Seat;
$3,000,000 Total
$3,000,000 Total
Airport Liability
$ 24,922
$ 24,165
-3.04%
None
Phoenix
Limits Purchased:
$1,000,000 Premises
$2,000,000 Premises
Aviation
Liability
Liability
$1,000,000
$2,000,000 Hangarkeepers
Contingent Law
$ 25,000
$ 25,000
0.00%
None
Florida
Enforcement
Sheriffs Self -
Professional
Limits Purchased.
$3,100,000 Limit
$3,100,000 Limit
insurance
Fund
$3,300,000A re ate
$3,300.000 Anoreoate
Total Fixed costs
E 2,258,650
E 1,867,006 1
-17.34%1$
(391,644)
Expected Losses-
$ 2,368,000
$ 2,502,000
5.66%
$ 134,000
Total Expected Costs
E 4,626,650
$ 4,369,006 1
.5.57%1$
(257,644)
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