HomeMy WebLinkAbout29A - INSURANCE RENEWALS REQUEST FOR
COUNCIL ACTION j
CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY:
JUNE 21, 2010
TITLE: APPROVED
? As Recommended
INSURANCE RENEWALS ? As Amended
? Ordinance on 15t Reading
? Ordinance on 2"d Reading
? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
~ ~°~.Z,..Lr''~/ ~ ~~(°`•r°~--- FILE NUMBER
Y
CITY MANAGER
RECOMMENDED ACTION
1. Approve the City's continued membership in the Big Independent Cities Excess Pool from
July 1, 2010 to July 1, 2011 at an estimated premium cost not to exceed $1,450,000.
2. Approve the City's continued participation in the Public Entity Property Insurance Program
from July 1, 2010 to July 1, 2011 at an estimated premium cost not to exceed $370,000.
DISCUSSION
In September 1988, the Big Independent Cities Excess Pool (BICEP) Joint Powers Authority was
formed with five cities. The current cities include 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. Additionally, participation in a pool provides rate stability and can offer broader
coverage.
The current excess liability and workers' compensation insurance policies will expire on July 1,
2010. The total BICEP insurance premium for the July 1, 2010 to July 1, 2011 period will not
exceed $1,450,000; an estimated $950,000 of which covers liability claims from $1,000,000 to
$75,000,000 per occurrence with a $1,000,000 self insured retention (SIR) which functions like a
deductible. The balance of $500,000 purchases statutory excess workers' compensation
insurance coverage with a $500,000 to $1,000,000 SIR.
The Public Entity Property Insurance Program (PEPIP) was established in May 1993 with
seventeen public agencies including the City of Santa Ana. The purpose of PEPIP is to provide
public agencies with group 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 $370,000 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
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Insurance Renewals
June 21, 2010
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damage and $82,500,000 in coverage for flood damage (coverage is in limited to $50,000,000 in
Flood Zone A.) Due to the excessive premium cost of earthquake insurance, the City will not seek
this coverage.
Insurance deductibles will be as follows:
Covera a Deductible
Flood $100,000 except $250,000 for Flood Zone A
locations
Vehicles
Fire Fi htin $50,000
Vehicles
All other $25,000
All other occurrences $10,000
Boiler & Machinery $2,500 to $350,000, depending on the pieces
of a ui ment 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 2010-11 Liability & Property Insurance account (account no.
08009051-64010) and Workers' Compensation account (account no. 08209054-64010).
APPROVED AS TO FUNDS AND ACCOUNTS:
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Kathie Gonzalez Francisco Gutierrez
Executive Director Executive Director
Personnel Services Finance & Management Services Agency
KG/ER/BM
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