Finance Committee Agenda and Packet 2011 01 18

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: MALCOLM FLEMING, CITY MANAGER DATE: JANUARY 18, 2011 SUBJECT: CITY OF LOUISVILLE 2011 INSURANCE COVERAGE ORIGINATING DEPARTMENT: CITY MANAGER'S OFFICE SUMMARY: On December 21, 2010, City Staff met with the City's insurance broker, Flood & Peterson Insurance, Inc., to review two proposals for renewing the City's insurance coverage for 2011 for property and liability coverage and one proposal for worker's compensation. The two companies that submitted proposals for property and liability were One Beacon Insurance (the City's 2010 insurance carrier) and Traveler's Insurance (the City has previously been with Traveler's). A copy of the Premium Summary is attached which shows the comparisons of what the City paid in 2010 with One Beacon, and the 2011 proposals from One Beacon and Traveler's. Staff made the decision to switch to Traveler's Insurance for the City's 2011 insurance coverage for property and liability. This decision was based on price and the coverage included. For an additional $1,550, Traveler's included cyber liability coverage and the company is including flood coverage for all City properties. The One Beacon policy would have required separate flood insurance policy for 10 properties that were designated in Flood Zone A at an additional cost not yet determined, but most likely in the $8- 10,000 range. Traveler's coverage in 2011 -12 costs $269,533 or $32,993 less than the premium cost provided by One Beacon. Additionally, changing from One Beacon to Traveler's for the 2011 -12 coverage period provides for a decrease in premiums for property and liability coverage of $32,932 from 2010 -2011, or an 11 % decrease over the previous year. The City will remain with Pinnocol Assurance for Worker's Compensation coverage. Pinnocol was the only company that was asked to submit a proposal. Pinnocol is the premier insurance company providing worker's compensation coverage and the premium has always been reasonable. From 2010 -11 to 2011 -12 policy years, the premium for worker's compensation insurance with Pinnocol decreased by $1,498 or a 1.18% decrease. There is only one other company that provides this type of insurance and their rates are usually higher. The loss ratios for worker's compensation for the last 3 years are as follows: 2010 -11 15 %, 2009 -10 106 %, and 2008 -09 25 %. is SUBJECT AGENDA ITEM CITY OF LOUISVILLE 2011 INSURANCE COVERAGE A7