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?