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09-03-2019 City InsuranceCity’s Budget Update Insurance Coverage with WCIA City Council Meeting September 3, 2019 Background 1/1/2013 City withdrew from WCIA 2014 – present self-insured through a Broker $250K self-insured (deductible) each incident $10 million General Liability $10 million Excess Liability Currently we also maintain Property insurance with a $25k deductible and Cyber/Fidelity insurance Broker fees are $31k per year Background The principle factor leading to going self-insured was to save money. Data since 2013 shows that on average, the City did not save money by purchasing insurance directly from a broker compared to coverage through WCIA. Because all of our settlements under our current insurance have been under the $250,000 deductible, the City has paid for litigation and settlement costs for claims out of the general fund. Self-Insured History of Costs Insurance Premiums Claims/Legal Fees 2015 - $540,601 2016 - $502,951 2017 - $501,622 2018 - $501,752 2019 - $505,975 2015 - $407,422 2016 - $250,031 2017 – $578,787 2018 -$570,959 2019 – $178,075* *1st 6 months of 2019 WCIA General Liability – No Deductible General Liability (no deductible) $734,518 Includes litigation and settlement costs Includes: Pre-Defense Review, WCIA Training & Education, Reimbursable Training and Certification, Risk Management and Consultations, and Cyber Insurance. Optional coverage Membership in WCIA requires that the City stay covered for general liability for at least 3 years. Other coverage including property, auto-physical damage and equipment breakdown will vary based on what is scheduled and the amount of the deductible. If Council approves membership, staff will return as part of the budget amendment process to present specific proposals for optional coverage based on budget constraints and loss history. Numbers to follow are examples quoted based on assumptions (which are explained in the quote) WCIAProperty Coverage Property (Value @ $68,775,380) $1,000 deductible $71,183 $5,000 deductible $52,957 $25,000 deductible $39,388 Replacement cost, except vacant buildings are actual cash value Our current premium for property insurance with a $25k deductible is $70,760. WCIA Auto Physical Damage Auto Physical Damage (Rate Per $100 of Valuation) $1,000 deductible $0.736 $5,000 deductible $0.371 Replacement cost coverage option available for vehicles with replacement cost value over $25,000. Deductible waived for glass repair, fire and lightning damage to scheduled vehicles Current estimate of $960,000 valuation with a $5,000 deductible is $35,616 annual premium under WCIA Miscellaneous Coverage Equipment Breakdown $3,542 Deductible Varies based on machinery Boiler/Machinery, Generator, Pump at waterpark – locations must be on property schedule on file with WCIA  Crime/Fidelity (estimate) $10,000 $25,000 deductible * The City does not currently carry breakdown insurance * The City currently pays a $15,729 annual premium for Crime/Fidelity insurance WCIATraining No Cost Trainings for Staff on topics such as Personnel, land use, police, public works, and parks. Reimbursements* for numerous accreditations and certifications: For example: CALEA, Flagger Certification, Aquatic Facility Operator Certification *Cap on reimbursements. Mayor’s Recommendation Approve the proposed interlocal agreements authorizing the City to join Washington Cities Insurance Authority and to authorize the Mayor to take those steps necessary to acquire no-deductible coverage for general liability. Washington Cities Insurance Authority By Rob Roscoe Deputy Director Washington Cities Insurance Authority WCIA is a member-driven public organization created in 1981 with 155 members. Participating public entities are co-owners of the pool, sharing the core value of long-term risk management to contain and stabilize long-term costs while increasing safety. WCIA has over $160 million in assets which is the strongest of any risk pool in the State of Washington Washington Cities Insurance Authority Advantages of WCIA Membership Run by a board of directors composed entirely of members Assist members in avoiding and reducing losses through risk management and claim handling Stability and transparency in rates Coverage determined by the Executive Director with an appeal right to a member run board Washington Cities Insurance Authority Coverage Liability $20,000,000-Auto, General, Police, Errors or Omissions, Employment Practices, Employee Benefit and Stop-Gap on a 100% occurrence form. Property & Auto $300,000,000 per Occurrence Equipment Breakdown $100,000,000 limit Crime & Fidelity $2,500,000 per Occurrence Information Security (Cyber Liability) $1,000,000 Security and Privacy Liability; $1,000,000 Regulatory Action; $75,000 Individuals Privacy Event Services;$1,000,000 Event Management;$1,000,000 Cyber Extortion Washington Cities Insurance Authority Claims Experienced in-house staff devoted to handling municipal claim and litigation in partnership with the member Risk Management Legal assistance that guides members before they take action (Pre-Defense Review) Assigned Risk Management Representative who assists in reducing exposure to loss Risk Management Guidelines, Risk Bulletins, Risk Management Legal Consultations are provided Washington Cities Insurance Authority Training On-site, regional and online trainings on a wide variety of public entity exposures such as personnel, land use, police, fleet volunteers, public works and parks Reimbursements for municipal accreditations, individual and group certifications and registrations for association schools and institutes Member Risk Reduction Grants All members can apply and grants are reviewed and awarded by member run committee Questions?