HomeMy WebLinkAbout29A - INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 1, 2009
TITLE:
INSURANCE RENEWALS
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1s1 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, 2009 to July 1, 2010 at an estimated premium
cost not to exceed $1,730,000.
2. Approve the City's continued participation in the Public Entity
Property Insurance Program from July 1, 2009 to July 1, 2010 at an
estimated premium cost not to exceed $425,000.
DISCUSSION
On September 23, 1988, the Big Independent Cities Excess Pool (BICEP)
Joint Powers Authority was formed with five cities. The current 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 environmental (pollution) liability, excess liability and
workers' compensation insurance policies will expire on July 1, 2009. The
total BICEP insurance premium for the July 1, 2009 to July 1, 2010 period
will not exceed $1,730,000; an estimated $975,000 of which covers
liability claims from $1,000,000 to $101,000,000 per occurrence with a
$1,000,000 self insured retention (SIR) that is like a deductible. An
estimated $55,000 covers environmental liability claims for three years
with a $10,000,000 limit with a $100,000 SIR. The balance of $700,000
purchases statutory excess workers' compensation insurance coverage with a
$500,000 to $1,000,000 SIR and payment of the 2007-08 insurance payroll
audit.
The Public Entity Property Insurance Program (PEPIP) was established on
May 15, 1993 with seventeen public agencies that included the City of
Santa Ana. The purpose of PEPIP is to provide public agencies with group
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Insurance Renewals
June 1, 2009
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purchasing strength. Since 1993, PEPIP has grown to include over 6,400
members in 45 states, which has allowed the group to purchase property
insurance at affordable premiums. The estimated $425,000 premium will
provide $1,000,000,000 of coverage for insured City properties. PEPIP
will provide the City with $100,000,000 for boiler and machinery damage
and $82,500,000 in flood damage except $50,000,000 in Flood Zone A.
However, due to the excessive premium cost of earthquake insurance, the
City will not seek this coverage.
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
Boiler & Machinery $2,500 to $350,000, depending on
the pieces of equipment involved
The City Manager will review the quotations and make the final decision to
secure the coverages.
FISCAL IMPACT
Funds are budgeted in the proposed 2009-10 Liability & Property Insurance
account (account no. 80-180-6521) and Workers' Compensation account
(account no. 82-178-6521).
APPROVED AS TO FUNDS AND ACCOUNTS:
Kathie Gonzalez Francisco Gutierrez ~~
Acting Executive Director Executive Director
Personnel Services Finance & Management Services Agency
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