HomeMy WebLinkAbout29A - INS RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 18, 2007
TITLE:
INSURANCE RENEWALS
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CI Y MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1 s' Reading
^ Ordinance on Intl 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, 2007 to July 1, 2008 at a premium cost not
to exceed $1,500,000.
2. Approve the City's continued participation in the Public Entity
Property Insurance Program from July 1, 2007 to July 1, 2008 at a
$356,017 premium cost.
3. Approve joining the California State Association of Counties - Excess
Insurance Authority's Environmental Insurance Program from July 1,
2007 to July 1, 2009 for an estimated premium not to exceed $40,000.
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 excess liability and workers' compensation insurance policies
will expire on July 1, 2007. For liability each member city has a
$1,000,000 self-insured retention that is similar to a deductible. The
total BICEP insurance premium for the July 1, 2007 to July 1, 2008 period
will not exceed $1,500,000; an estimated $875,000 of which covers
liability claims from $1,000,000 to $26,000,000 per occurrence. The
balance of $625,000 purchases $300,000,000 of excess workers' compensation
insurance coverage per occurrence with a $500,000 self-insured retention.
The City Manager will review the quotations and make the final approval
and coverage will be bound.
29A-1
Insurance Renewals
June 18, 2007
Page 2
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
purchasing strength in a challenging property insurance market. Since
1993, PEPIP has grown to include over 6, 000 members in 30 states, which
has allowed the group to purchase adequate property insurance at
affordable premiums. Renewal of the City's participation in PEPIP will
ensure the City's ability to continue purchasing property insurance at
competitive rates. The $356,017 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. All PEPIP members share
$600,000,000 of terrorism coverage on an annual aggregate basis with a
maximum of $200,000,000 for any one member. 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
Environmental insurance covers pollution risks which are excluded in
liability policies and provides coverage for property losses at scheduled
City locations. The coverage includes the following: (1) City streets,
roads, storm drains and sewer lines (2) pesticide and herbicide spraying
(3) emergency response activities (4) transportation of City wastes by
vendors (5) City storage tanks above and below the ground (6) clean up
costs. The insurance is "Claims Made" instead of "Occurrence" coverage
which means a loss needs to happen during the policy period and a claim(s)
needs to be filed in the policy period for coverage to apply. The limit
is $10,000,000 with a $500,000 deductible and is a joint purchase program
through the California State Association of Counties - Excess Insurance
Authority (CSAC-EIA) There are 47 members in the program and there is a
$50,000,000 program aggregate. The City would be entering for the last two
years of the three year program.
29A-2
Insurance Renewals
June 18, 2007
Page 3
FISCAL IMPACT
Funds are budgeted in the proposed 2007-08 Liability & Property Insurance
account (account no. 80-180-6521) and Workers' Compensation account
(account no. 82-178-6521).
APPROVED AS TO FUNDS AND ACCOUNTS:
En~ J. 1 a
Exec dve ector
Personnel Services
Francisco Gutierrez 't,
Executive Director W
Finance & Management Services Agency
29A-3