HomeMy WebLinkAbout29A - INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 5, 2017
TITLE:
INSURANCE RENEWALS WITH BIG
INDEPENDENT CITIES EXCESS POOL,
PUBLIC ENTITY PROPERTY INSURANCE
PROGRAM AND CALIFORNIA STATE
ASSOCIATION OF COUNTIES
{STRATEGIC PLAN NO. 4, 1}
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CITY MAIAGER
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CLERK OF COUNCIL USE ONLY:
❑ As Recommended
❑ As Amended
❑ Ordinance on 1" Reading
❑ Ordinance on 2ntl 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
Liability Program from July 1, 2017 to July 1, 2018 at an estimated premium cost not to
exceed $3,300,000.
2. Approve the City's continued membership in the Big Independent Cities Excess Pool
Workers' Compensation Program from July 1, 2017 to July 1, 2018 at an estimated
premium cost not to exceed $404,000.
3. Approve the City's continued participation in the Public Entity Property Insurance Program
from July 1, 2017 to July 1, 2018 at an estimated premium cost not to exceed $650,000.
4. Approve the City's continued participation in the California State Association of Counties —
Excess Insurance Authority's Crime Bond Program from July 1, 2017 to July 1, 2018 at an
estimated premium cost not to exceed $12,000.
DISCUSSION
The City is a member of Big Independent Cities Excess Pool (BICEP) Joint Powers Authority
which was formed in September 1988. The current member cities include Santa Ana, Huntington
Beach, San Bernardino, Oxnard, West Covina, and Ventura. 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 BICEP excess liability insurance premium for the July 1, 2017 to July 1, 2018 period will not
exceed $3,300,000, an increase over last year's premium of $1,516,256. This increase is due to
the hardening of the Police Liability market. The excess liability program covers liability claims
from $1,000,000 to $27,000,000 per occurrence with a $1,000,000 self-insured retention (SIR)
which functions like a deductible.
29A-1
Insurance Renewals with Big Independent Cities Excess Pool, Public Entity Property Insurance
Program and California State Association of Counties
July 5, 2017
Page 2
The BICEP workers' compensation insurance premium for the July 1, 2017 to July 1, 2018 period
will not exceed $404,000, which is a slight increase over last year's premium of $350,000. The
workers' compensation program provides statutory excess workers' compensation insurance
coverage with a $1,000,000 SIR.
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 $650,000 premium, a decrease from last year's premium of
$668,535, will provide $1,000,000,000 of coverage for insured City properties from July 1, 2017
to July 1, 2018. 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 limited to $50,000,000 in Flood Zone
A.) This cost includes the purchase of earthquake insurance. The earthquake coverage provides
coverage up to $25,000,000 per occurrence and annual aggregate with a deductible of 5% per
unit ($100,000 Minimum).
The City joined the California State Association of Counties — Excess Insurance Authority
(CSAC-EIA) Crime Bond Program on April 1, 2004. The renewal premium from July 1, 2017 to
July 1, 2018 remains at $12,000.
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #4 - City Financial Stability, Objective #1
(Maintain a stable, efficient and transparent financial environment).
FISCAL IMPACT
Funds are budgeted in the proposed 2017-18 Liability & Property Insurance account (account no.
08009051-64010) for an estimated premium cost not to exceed $3,962,000 and Workers'
Compensation account (account no. 08209054-64010) for an estimated premium cost not to
exceed $404,000.
L
EcNvard Raya
Executive Director
Personnel Services
APPROVED AS TO FUNDS AND ACCOUNTS:
`a\Is �L �M0 1
Francisco Gutierrezy�j
Executive Director
Finance & Management Services Agency
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