HomeMy WebLinkAbout29A - INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 2, 2008
TITLE:
INSURANCE RENEWALS
^Q~
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1St Reading
^ Ordinance on 2"d Reading
^ Implementing Resolution
^ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
1. Approve the City's continued membership in the Big Independent Cities
Excess Pool from July 1, 2008 to July 1, 2009 at an estimated premium
cost not to exceed $1,750,000.
2. Approve the City's continued participation in the Public Entity
Property Insurance Program from July 1, 2008 to July 1, 2009 at an
estimated premium cost not to exceed $400,000.
3. Approve the City's continued participation in the California State
Association of Counties - Excess Insurance Authority's Crime Bond
Program from July 1, 2008 to July 1, 2011 for three years at an
estimated premium not to exceed $40,000.
DISCUSSION
On September 23, 1988, five cities formed the Big Independent Cities
Excess Pool Joint Powers Authority (BICEP). The current BICEP cities are
as follows: Santa Ana, Huntington Beach, San Bernardino, Oxnard, and West
Covina. The purpose of BICEP is to provide insurance coverage for its
members, shielding them from financial debt due to large liability
claims, judgments, and settlements.
The current excess Liability and Workers' Compensation insurance policies
will expire on July 1, 2008. The total BICEP insurance premiums for July
1, 2008 to July 1, 2009, will not exceed $1,750,000. Under BICEP's
liability insurance program, each member city is responsible for a self-
insured retention of $1,000,000. The excess liability insurance coverage
will cost an estimated $1,100,000 for all claims greater than our self-
insured retention that range from $1,000,000 to $101,000,000. Because of
reasonable market pricing, we are purchasing more excess insurance to
protect the City from large settlements and verdicts currently being
experienced by other public entities. The remaining $650,000 will
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Insurance Renewals
June 2, 2008
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purchase statutory excess Workers' Compensation insurance for claims that
exceed our self-insured retention of $500,000. The City Manager will
review the quotations and make the final decision to secure the coverage.
The Public Entity Property Insurance Program (PEPIP) was established on
May 15, 1993 with seventeen public agencies that included the City of
Santa Ana. Since 1993, PEPIP has grown to include more than 6,400
members in thirty-two states. The goal of PEPIP is to give public
agencies group purchasing power. Our continued participation in PEPIP
will ensure the City's ability to purchase property insurance at
competitive rates. We estimate that our property insurance premium will
be $400,000. This will provide $1,000,000,000 of coverage for insured
City properties. It will also provide the City with $100,000,000 for
boiler and machinery damage and $82,500,000 for flood damage. Properties
in Flood Zone A will have $50,000,000 of insurance coverage. All PEPIP
members share $600,000,000 of terrorism coverage on an annual aggregate
basis with a maximum of $200,000,000 for any one member. The City will
not seek earthquake coverage due to excessive premium cost.
Insurance deductibles will be as follows:
Coverage Deductible
Flood $100,000 except $250,000 for Flood
Zone A locations
Vehicles
Fire Fighting $50,000
Vehicles
All other $25,000
All other occurrences $10,000 except $5,000 for
Redevelopment Properties
Boiler & Machinery $2,500 to $350,000, depending on
the pieces of equipment involved
The City joined the California State Association of Counties - Excess
Insurance Authority (CSAC-EIA) Crime Bond Program on April 1, 2004. Our
current policy will end on July 1, 2008. The estimated premium to renew
the policy for the next three years is $40,000. The Crime Bond Program
provides $10,000,000 of coverage with a $25,000 deductible per
occurrence. This program provides coverage for the following situations:
1. Employee dishonesty
2. Faithful performance issues
3. Forgery and alteration
4. Theft, disappearance and destruction
5. Robbery and safe burglary
6. Computer fraud including funds transfer coverage
7. Money orders and counterfeit paper currency
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Insurance Renewals
June 2, 2008
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FISCAL IMPACT
Funds are budgeted in the proposed
account (account no. 80-180-6521)
(account no. 82-178-6521).
2008-09 Liability & Property Insurance
and Workers' Compensation account
APPROVED AS TO FUNDS AND ACCOUNTS:
ique Al
Executi Di ect r
Personnel Services
. ~
~~. ~ ~ i ~
Francisco Gutierrez n.~,
Executive Director ~i~'
Finance & Management Services Agency
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