Subject:
Title
Commercial insurance program renewal for March 1, 2024-2025, for Property and Casualty risks.label
Recommended Action:
Recommended Action
Approval by the County Administrator of the Commercial Insurance Program renewal for March 1, 2024.
• Risk Management is pleased to inform the 2024 insurance marketplace is showing signs of stabilization both in Property and Liability insurance. The lines of coverage listed below are in order of significance within the County insurance program.
• Excess Liability Coverage: No Changes to $10M limit. 8% increase for 2024.
• Property Coverage: No changes to Property insured by FM Global. Carrier did provide premium credits of $1.4M. Removed Co-Insurance participation by County on other property policy to reduce storm exposure.
• Aircraft Hull: Added new helicopter for PW and plane for Sheriff. No change to limits.
• Traffic Maintenance Professional Liability: Carrier non-renewed. New quotes significantly higher. Reduced limit from $2M to $1M with department approval.
• Trail and Tradeshow Liability: Rates increase due to increased construction estimate for trail. Must maintain existing coverage per agreement.
• Excess Crime: The County currently has a crime policy that has limited coverage for false pretense coverage. As a result of attempted fraud by an outside party regarding funds transfer, Risk has increased coverage for this exposure adding and additional $1M in coverage.
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• Cyber liability: Was able to secure Cyber Liability with $3M in coverage for $95,000. Prior Cyber coverage expired in 2022 was $166K for $10M in coverage.
• Total Policy Premiums: The overall insurance cost for 2024 is $15,546,263 for an overall increase of 10% over 2023 however $500K under the budget amount of $16M.
• This is sufficiently budgeted in the FY24 Adopted Budget. Funding for expenditures will be derived from the Risk Financing Fund.
Body
Strategic Plan:
Deliver First Class Services to the Public and Our Customers
5.1 Maximize partner relationships and public outreach
5.2 Be responsible stewards of the public’s resources
5.3 Ensure effective and efficient delivery of county services and support
5.4 Strive to exceed customer expectations
Summary:
Insurance renewal invoices are for the purchase of commercial insurance for property and casualty risks. The insurance covers County-owned property and various areas of liability Insurance for the Board of County Commissioners (Board) and the Appointing Authorities, including the Sheriff. The Clerk of the Circuit Court does not participate in the County’s workers compensation insurance policy. Commercial insurance coverage is provided by both AJG and FM Global insurance companies, requiring payment of policy premiums within 30 days of binding coverage to prevent cancellation.
Background/Explanation:
On March 18, 2008, the Board delegated authority to the County Administrator, or his/her designee, to execute forms, applications, and documents necessary to continue coverage for each renewal term due to the limited time to bind insurance premiums, typically within 30 days of receiving renewal pricing. At that time, the Board also delegated authority to the County Administrator or designee to sign all insurance invoices for future insurance premiums and renewal premiums. Each year, Risk Management includes a summary of commercial insurance coverages renewed for the upcoming year.
Fiscal Impact:
The total FY24 budget for insurance premiums is $16M. The projected annual cost for 2024 is $15.5M, $500K under budget.
DAS has sufficiently budgeted for this item in the FY24 Adopted Budget in the amount of $16,000,000.00. The budget anticipated a higher expense in FY24, so this lower premium is expected to generate $453,737.00 in lapse savings.
Funding for expenses will be derived from the Risk Financing Fund.
Delegated Authority:
Authority for the County Administrator to accept the commercial insurance coverages and approve the insurance premium invoices was granted by the Board on March 18, 2008, per attached.
Staff Member Responsible:
Rick Kahler, Insurance Manager, Purchasing & Risk, Administrative Services
Merry Celeste, Division Director, Purchasing & Risk, Administrative Services
Joe Lauro, Director, Administrative Services
Partners:
N/A
Attachments:
Premium summary for 2024
Delegated authority dated March 18, 2008