HomeMy WebLinkAbout29A - INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 18, 2011
TITLE
INSURANCE RENEWALS
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1St Reading
? Ordinance on 2nd 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, 2011 to July 1, 2012 at an estimated premium cost not to exceed $1,250,000.
2. Approve the City's continued participation in the Public Entity Property Insurance Program
from July 1, 2011 to July 1, 2012 at an estimated premium cost not to exceed $360,500.
3. Approve the City's continued participation in the California State Association of Counties -
Excess Insurance Authority's Crime Bond Program from July 1, 2011 to July 1, 2013 for an
estimated two year pre-paid premium not to exceed $17,500.
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,
2011. The total BICEP insurance premium for the July 1, 2011 to July 1, 2012 period will not
exceed $1,250,000; an estimated $1,015,000 of which covers liability claims from $1,000,000 to
$50,000,000 per occurrence with a $1,000,000 self insured retention (SIR) which functions like a
deductible. The balance of $235,000 purchases statutory excess workers' compensation
insurance coverage with a $1,000,000 SIR.
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Insurance Renewals
July 18, 2011
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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 $360,500 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 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:
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
The City joined the California State Association of Counties - Excess Insurance Authority (CSAC-
EIA) Crime Bond Program on April 1, 2004. The estimated two year pre-paid renewal premium
from July 1, 2011 to July 1, 2013 is $17,500.
The Crime Bond Program limit is $10,000,000 with a $25,000 per occurrence deductible and
covers the following:
1. Employee dishonesty with faithful performance coverage
2. Forgery and alteration
3. Theft, disappearance and destruction
4. Robbery and safe burglary
5. Computer fraud including funds transfer coverage
6. Money orders and counterfeit paper currency
The City Manager will review the quotations and make the final decision to secure the coverages.
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Insurance Renewals
July 18, 2011
Page 3
FISCAL IMPACT
Funds are budgeted in the proposed 2011-12 Liability & Property Insurance account (account no.
08009051-64010) and Workers' Compensation account (account no. 08209054-64010).
APPROVED AS TO FUNDS AND ACCOUNTS:
f
Kathie Gonzalez
Executive Director
Personnel Services
KG/CR/BM
Francisco Gutierrez
Executive Director
Finance & Management Services Agency if-
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