Finance Committee Agenda and Packet 2012 01 17

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: MALCOLM FLEMING, CITY MANAGER DATE: JANUARY 17, 2012 SUBJECT: CITY OF LOUISVILLE 2012 INSURANCE RENEWAL ORIGINATING DEPARTMENT: CITY MANAGER’S OFFICE SUMMARY: On December 22, 2011, staff met with Flood & Peterson, the City’s insurance broker, to review proposals for renewing the City’s insurance coverage for 2012 for property and liability coverage and a proposal for renewal of Workers Compensation coverage. Traveler’s, the City’s 2011 insurance carrier, was the only company that provided a full and complete proposal for renewal (see Attachment 1). Based on Traveler’s proposal, the premium for property and liability coverage increased from 2011 to 2012 by $66,479. This increase is a result of a higher premium for Flood Zone A properties and smaller increases in other lines. Also, deductibles have increased from $5,000 to $10,000 in two lines of coverage, Employment Practices Liability and Public Officials Liability, with all other deductibles remaining the same as in the previous year. The 2012 premium for property and liability coverage is $335,631. Other companies that were solicited are listed below. The Philadelphia Insurance Company could not provide coverage for all lines, with the other companies declining the request: Philadelphia Insurance Company – bid only for Property and Computers (excludes Flood Zone A), Automobile and Crime and declined other coverage lines. CNA – declined to bid, unable to write high values and dam exposure One Beacon – Declined, will reconsider next year Cincinnati Insurance Company - Declined, unable to write high values, dam exposure and not a market for municipal liability coverage Zurich – Did not respond to RFP Pinnacol Assurance was the only company that was asked to submit a proposal for renewal of Workers Compensation Coverage (see Attachment 1). Pinnacol continues to be competitive and provide the City with an affordable premium that decreased from the previous year’s premium of $125,916. The 2012 premium is $118,151 and maintains the $500 deductible. FISCAL IMPACT: For 2012, the budget for property and liability coverage is $290,000. The shortage of $45,631 will be appropriated from the General Fund, the Water Utility Fund, and the Wastewater Utility Fund. A 2012 budget amendment for insurance premiums will be presented to Council in April, SUBJECT AGENDA ITEM CITY OF LOUISVILLE 2012 INSURANCE RENEWAL 7