Finance Committee Agenda and Packet 2014 01 21

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SUBJECT: CITY OF LOUISVILLE 2014 INSURANCE RENEWAL DATE: JANUARY 21, 2014 PAGE 2 OF 3 • Expanded the definition of Off Premises Business Personal Property to apply to Any Location and increased the limit from $50,000 to $100,000 at no additional premium. • We deleted the coinsurance clause that applied to the Business Interruption • Under Contractor's Equipment Policy, we now have coverage up to $100,000 for Unlisted items: $5,000 per item at no additional premium • Added to the Automobile policy by endorsement Employee Hired Auto at no additional premium • Added to the Automobile policy by endorsement Fellow Employee Coverage • Under the Public Entity we added $25,000 for Key Employees at no additional premium The Worker's Compensation is $139,422 through Pinnacol. Although this was slightly over a 9% increase in premium and a flat rate (.37 %) compared to last year. Pinnacol continues to be competitive and provide the City with an affordable premium. The increase in the City's premium is mainly due to an increase in payroll of $1,208,117 and Pinnacol's State Filings not allowing Municipalities with a police force to be in the Superior Tier. City Staff directed Flood & Peterson to go out to bid for the City's Worker's Compensation policy to determine if Pinnacol was competitive. Both Traveler's Insurance and Zurich Insurance provided a response of an indication between $170,000 - $180,000. City Staff and Flood & Peterson determined the Traveler's and Zurich's worker's compensation policies were not competitive with Pinnacol's. City staff has been pleased with Pinnacol's claims management and customer service regarding employee injuries. Overall, the property and casualty and worker's compensation premiums combined total $459,288 which is a 3.29% decrease from 2013, a difference of $15,108. FISCAL IMPACT: For 2014, the budget for property and casualty coverage is $398,200. The premium for 2014 for this line of coverage is $319,866. After premium is paid, there will be an available budget remaining of $78,334. Including all funds and departments, the City appropriated a total of $120,490 for Worker's Compensation coverage. This is $18,932 less than budgeted as the premium is $139,422. However, the City did receive discounts on Worker's Compensation premiums for our Experience Modification Rating, Designated Provider Network, Cost Containment Credit, and Premium Discount. Overall for property and casualty coverage as well as worker's compensation, the City is $59,402 under budget for 2014. RECOMMENDATION: Staff recommends that City Council approve the 2014 premiums as listed below: CITY COUNCIL COMMUNICATION 9