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HomeMy WebLinkAboutCS 24-07 REPORT TO EXECUTIVE COMMITTEE Report Number: CS 24-07 Date: June 11, 2007 lot From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2007/2008 Property and Liability Insurance Renewal Recommendation: 1. That Report CS 24-07 of the Director, Corporate Services & Treasurer be received; 2. That the City of Pickering renew effective June 29, 2007, its property, liability and other coverages through the Frank Cowan Company for the period July 1, 2007 to July 1, 2008 inclusive on terms and conditions acceptable to the Director, Corporate Services & Treasurer; 3. That the Director, Corporate Services & Treasurer, as part of the Risk Management Program, be authorized to continue the Reimbursable Deductible Program through the Insurance Adjuster and the Frank Cowan Company and further, that the Director be authorized to settle any claims including any adjusting and legal fees within the total deductible limit where it is in the City's interest to do so; 4. That the Director, Corporate Services & Treasurer be authorized to purchase additional insurance, make changes to deductibles and existing coverages, and alter terms and conditions as becomes desirable or necessary in order to limit potential liability exposure and to protect the assets of the City and it's elected officials and staff; and, 5. That the appropriate officials be authorized to take the necessary actions to give effect thereto. Executive Summary: The City's insurance program continues to operate successfully and the above recommendations provide for a renewal of the policies basically on the same or improved terms and conditions in the past years which also provides coverage for the Library, its Board and its employees. Report CS 24-07 June 11, 2007 Subject: 2007/2008 Property and Liability Insurance Renewal Page 2 ~ , 101 Financial Implications: The premium renewal cost has been provided for in the various cost centers through the approval of the 2007 budget by Council and the renewal premium cost is below the 2007 budgeted amount. The favourable renewal terms are due to favourable claims history as a result of City's management of its insurance responsibilities both through the efforts of staff and its insurance adjusting firm. However, as Members of Council are aware, claims activity and insurance market conditions have a high degree of uncertainty and today's current positive scenario could easily change due to catastrophic events such as weather related events. To put another way, if the insurance industry experiences another hurricane similar to Katrina in 2007, insurance premiums will probably increase in 2008. Sustainability Implications: Insurance renewal provides the City with financial security and is therefore better able to maintain financial sustainability. Background: Each year on July 1, the City's general liability and property insurance policies come up for renewal. As approved by Council at the time of the 1998 renewal, the Treasurer undertook an extensive review of all aspects of the City's insurance program. The City of Pickering embarked in a Risk Management Program, the initial phase of which involved negotiating renewing premiums with the City's broker. The result of the negotiations was a decrease of approximately $75,000 or 20 percent, in the premiums from that of the prior year. This premium was also approximately $98,000 less than the 1998 budget provision which, after claims under the increased deductible were paid, resulted in a transfer of approximately $50,000 to the Self Insurance Reserve. From 1999 to 2003, staff have reviewed the deductibles, coverages, policies and procedures to ensure that the City is financially protected. In 1999 approximately $92,000 was transferred to the Insurance Reserve as a result of the continued savings. In 2000 and 2001, the amount of $100,000 in each year was included as a revenue item in the annual budget. For the 2002 budget, $50,000 was included as revenue with the balance being used to offset premium increases. The 2003 Budget anticipated a premium increase and therefore, no savings were transferred to the Self Insurance Reserve, however a budget increase of approximately $100,000 was avoided. As a result the balance of the Reserve at December 31,2006 was approximately $915,000. Our renewal premium is below the budgeted amount which continues in part to reflect our claims experience based on our risk portfolio or municipal seNices provided. Another key aspect of the City's program is the fact that our deductibles are at a reasonable level within the City's level of affordability. Recommendation 4 provides the Treasurer with the authority to continue to review and adjust insurance coverages where appropriate during the year to reflect current market and business environment conditions. Report CS 24-07 June 11, 2007 Subject: 2007/2008 Property and Liability Insurance Renewal ~ ~2. Page 3 Weather Related Events & Current External Insurance Environment Natural (i.e. weather-related) catastrophes, although unpredictable have now become an annual event. Weather patterns have brought severe weather conditions in various parts of the world - torrential rainstorms, flooding and hurricanes and Canadians can not expect to be exempt from these events. Two year's ago, there was flooding in Calgary and Edmonton and on August 19, 2005 a rainstorm cut a relatively narrow swath through southwestern Ontario and the Toronto area resulting in estimated losses of $500 million. Unfortunately, natural or weather-related catastrophes are not limited to municipal boundaries. Instead, when these events occur, as mentioned above, they can affect several or many municipalities. Natural weather related catastrophes can generate claims in the billions of dollars. Hurricane Katrina has been the most destructive of all hurricanes which damaged the New Orleans levee system and resulted in massive flooding and is estimated to have caused $70 billion worth of insured damage. These claims/payments will probably be covered by the reinsurance industry which in-turn recovers these losses through higher premiums. Basic risk management states that you should diversify your risk. Many insurance companies have customers throughout the Province or Canada to diversify the risk associated with a local catastrophic event. With the City of Pickering being a direct customer of the Frank Cowan Company (who has customers throughout the Province and beyond) the geographical risk diversification is achieved and maintained. Service to our Residents Regrettably, insurance claims or incidents are made on a frequent basis. A key strategic advantage of the City's insurance and risk management program is that every claim is processed with a customer service attitude. After a claim or incident is received, City staff quickly contact (within 24 hours) the claimant to advise them that the City has received the claim and to ensure them that the claim is being investigated by the City's Insurance Adjuster. The City's Insurance Adjuster has over 20 years of local municipal insurance experience which the City uses as an asset to investigate and settle claims. In addition, the City's Insurance Adjuster has many year's of Pickering experience which helps reduce claims cost due to his knowledge and or his familiarity with the City, its policies and procedures. The Insurance Adjuster's service standard is to make contact with the claimant within two business days. Sometimes, the claimants may not completely agree with the outcome and City staff may review the claim and/or to intervene to work towards a solution. The strategic advantage of the "local service delivery modE~I" is that claims are handled quickly professionally and with a customer service perspective. In addition, the current "local" service delivery model allows City staff "hands on" participation in the claims process to better serve claimants which in many cases are City residents Report CS 24-07 June 11 , 2007 Subject: 2007/2008 Property and Liability Insurance Renewal Page 4 .. 103 Conclusion The City's Insurance and Risk Management Programs are working satisfactory. The City has benefited from its long standing relationship with the Frank Cowan Company especially during the current insurance market. Therefore, renewal through the Frank Cowan Company with our present carriers is recommended. Attachments: 1. Program Summary of Insurance Coverage Prepared By: Approved I Endorsed By: ,4~ ,--:/ ~ /-g~~_. _~- or <.-.--- Gillis A. Paterson Director, Corporate Services & Treasurer Stan Karwowski Manager, Finance & Taxation GAP:vw Attachment Recommended for the consideration of Pickering Cit C c t, .. ~.oI 104 ~ C2~~~ompany j.\TTACHMEi-J'" #L TO REPORT#CS<:J~'''O-7 2007 Municipal Insurance Program Cill{ '" ..J. AJl\i1;;~~~~~ PICKERlN1J CORPORATION OF THE CITY OF PICKERING Prepared by: Mr. Randy Edwards, CIP, CAIB, CCIB, RIB (Ontario) Regional Manager Frank Cowan Company Limited 4 Cowan Street East Princeton, ON NOJ 1 VO This is a summary. Nothing herein alters the terms, conditions and exclusions contained in the printed insurance contract(s). REF: 60275/sl1 May 15, 2007 randy .edwards@frankcowan.com 1-800-265-4000 T/519-458-4331 1'/519-458-4366 About the Frank Cowan Company t.j 105 Leader in Public Entity Insurance Since 1927, Frank Cowan Company has grown to become one of Canada's leading providers of Insurance and Risk Management solutions for public entities. Frank Cowan Company has been a pioneer in the development and implementation of innovative insurance programs for the Municipal, Health Care, Voluntary and Education sectors. Cowan Insurance Group Frank Cowan Company is a wholly owned subsidiary of the Cowan Insurance Group Ltd., whose other wholly owned subsidiaries include Cowan Insurance Brokers Limited and Cowan Benefits Consulting, making the Cowan Insurance Group one of the largest privately held companies of its type in Canada. Cowan Insurance Brokers Limited provides personal insurance products (home and automobile), and commercial insurance programs to thousands of individuals and corporations across Canada. Cowan Benefits Consulting provides pension, benefits, actuarial and human resource consulting to corporations and public entities. The Cowan Insurance Group is a wholly owned subsidiary of Princeton Holdings Limited, which also owns controlling interest in The Guarantee Company of North America, an insurance leader in surety bonding, corporate risk products and high value homeowner coverages. Outstanding Service Weare more than just an insurance provider. Weare a trusted partner in providing insurance and risk management services. We work with our clients to develop individualized programs including complete risk management, claims management and an array of other services. Our mandate is clear.. .help our clients reduce risk. Clients also benefit from our affiliations with lawyers, adjusters and others that specialize in the public sector. The combination of our service network and internal expertise allow us to continually develop innovative, cost-effective solutions and services tailored to the risks of individual clients. Financial Stability Frank Cowan Company, as an Underwriting Agent of public entity business, represents a group of select insurers of exceptional reputation and financial stability. This creates a very stable market for your insurance requirements, and gives our customers the comfort of knowing that they will always be protected by long-term, high-quality continuous service. Frank Cowan Company Limited -2- !loI lOe, MARKETPLACE CONDITIONS The Canadian Property & Casualty Insurance marketplace continues to witness consolidation yet remains one of the most saturated insurance markets in the world, with over 200 players. However, amongst the majority of the insurers operating in Canada, specialization continues to be the trend. Only a limited number of insurers are willing to risk their capital on high liability exposure classes such as municipalities, hospitals and public entity sectors. While the last few years have brought some stability for the general Property & Casualty market, speciality classes continue to trend upwards. The Public Entity sector has experienced significant losses in the past few years. Some of these losses have been driven by landmark cases, but overall, frequency and severity of claims has increased dramatically. As well, the overall cost of claims, which takes into account escalating court awards, claims administration expenses and the ever-increasing replacement costs of assets, has continued to rise during this period. Insurers and Reinsurers have become extremely cautious about public entity liability exposures due in part to the continued downloading of services by senior levels of government, along with the fact that these organizations continue to be asked to fill more and more public needs. Insurers are now experiencing the negative impact that the claims from these services are having on public entity insurance results. Reacting to these deteriorating results, a number of insurers have either imposed coverage restrictions or withdrawn from the public entity market entirely. Frank Cowan Company, a specialist in public entity insurance, continues to receive the support and capacity of our insurers. We continue to provide long-term stability for the insurance and risk management needs of our public entity clientele. Our policies and services continue to evolve in response to the exposures faced by our clients. Cowan continues to provide a consistently stable insurance program for public entities. Weare confident that our product and pricing will reflect this position. Frank Cowan Company Umited - 4 - ;'~ 107 PREMIUM AND COVERAGE SUBMISSION IMPORTANT NOTICE We have quoted tenns and conditions to you based on the following assumptions: No major changes in the loss experience of your portfolio. No major exposure changes prior to Renewal. Continued support of our insurers. No changes in the reinsurance terms or conditions available to our insurers that would affect the terms we have quoted. Any changes to the above assumptions prior to renewal may result in changes to our quotation. Frank Cowan Company Limited - 5 - :,'1 108 PROGRAM SUMMARY SUMMARY OF COVERAGES PlRilr:i~~ Municipal Liability Limit of Protection per occurrence (No Annual Aggregate Limit) Third Party Claims Deductible including expenses Sewer Backup Deductible including expenses Wrongful Dismissal (defence costs) Limit per claim Annual Aggregate Limit Deductible Municipal Marina Liability Malpractice Liability Voluntary Compensation Errors and Omissions Limit of Protection per claim (No Annual Aggregate Limit) Deductible including expenses Non-Owned Automobile Limit of Protection per occurrence (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) Third Party Deductible All Perils Physical Damage Limit Deductible Environmental Liability Liabililty of Protection per claim Annual Aggregate Limit Self-Insured Retention Frank Cowan Company Limited - 6 - LIMJTS/ AMOUNTS $ 25,000,000. $ 50,000. $ 50,000. $ 250,000. $ 250,000. $ 5,000. Included Included Included $ 25,000,000. $ 50,000. $ 25,000,000. $ 10,000. $ 500,000. $ 500. $ 1,000,000. $ 2,000,000. $ 50,000. PROGRAM SUMMARY SUMMARY OF COVERAGES ',J 108 LIMITS/AMOUNTS Comprehensive Crime Commercial Blanket Bond Counterfeit Paper and Depositors' Forgery Audit Expense (Sub-Limit $ 100,000.) Money and Securities - Blanket any Location Excess on Securities Councillors' Accident- - City Mayor/Regional Councillor, Three Regional Councillors (Durham)/City Councillor, Three City Councillors and Nine Library Board Members Accidental Death & Dismemberment (24 Hour a Day Coverage) (No Annual Aggregate Limit and No DrAiuctible) Wee1dy Income - Total Disability Weeldy Income - Partial Disability Municipal Conflict of Interest Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim (No Annual Aggregate Limit) Legal Expense Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim Annual Aggregate Limit Frank Cowan Company Limited - 7 - $ $ $ $ $ $ $ 2,000,000. Included Included Included 100,000. 100,000. $ $ 100,000. 500. 250. 100% 100,000. 100% 100,000. 250,000. i.., ll() PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS PARTBf~noijR'!Jii Property Insurance (including Data Processing Insurance) Total Sum Insured * Valuable Papers Accounts Receivable (other than Data Processing) Extra Expense (other than Data Processing) Business Interruption Rent or Rental Value Form Gross Revenue Form $ 139,461,400. $ 500,000. $ 500,000. $ 1,000,000. $ 500,000. $ 2,584,500. $ 5,000. Checkroom Liability Data Processing System and Equipment Media Extra Expense $ $ $ 1,440,800. 47,000. 50,000. Fine Arts Form $ 2,000. Exhibition Form As Per Lists Provided Deductible Exceptions: Checkroom Liability, Fire Training Trailer, Fine Arts Form and Exhibition Form $ - Peril of Flood $ - Peril of Earthquake 3% or Minimum $ $ 10,000. 2,500. 25,000. 100,000. *Note: Please: refer to the insurance contract for an itemized list of assets containing specific limits of insurance or that are excluded from the policy. Frank Cowan Company Limited - 8 - PROGRAM SUMMARY SUMMARY OF COVERAGES 111 LIMITS/AMOUNTS Boiler and Machinery Limit per Accident - Comprehensive Extra Expense Water Damage Ammonia Contamination Expediting Expenses Hazardous Substance (including PCB Contamination) Business Interruption - Loss of Profits (Gross Revenue) - All Buildings & Facilities, Greenwood Museum, Pickering - Don Beer Arena, 940 Dillingham Road, Pickering - DWlbarton Indoor Pool, 655 Sheppard Ave. E., Pickering - Pickering Recreation Complex., 1867 Valley Farm Road, Pickering Spoilage - Goods Wlder Refrigeration Professional Fees Data and Media By-Law Cover Deductible Frank Cowan Company Limited -9- $ 50,000,000. $ 500,000. $ 500,000. $ 500,000. Included $ 500,000. $ 94,500. $ 600,000. $ 100,000. $ 1,790,000. $ 50,000. $ 500,000. $ 10,000. Included $ 10,000. ~~1I llZ PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/ AMOUNfS pBT1U~:imOJmfiiiE Automobile Fleet Liability Limit Deductibles Section 3 (Third Party) Section 6 (Direct Compensation) All Perils $ 25,000,000. $ 10,000. $ 10,000. $ 10,000. Garage Automobile Third Party Liability Limit Customer Vehicles Collision Limit Deductible Specified Perils Limit Deductible $ 3,000,000. $ 200,000. $ 500. $ 300,000. $ 500. Frank Cowan Company Limited - 10- COMPREHENSIVE INSURANCE PROGRAM COVERAGE FEATURES 2007 - 2008 . Frank Cowan Company Limited - 11 - 113 114 PART A CASUALTY Frank Cowan Company Limited - 12 - ;J 115 MUNICIPAL LIABILITY INSURANCE Features The Cowan Municipal Program incorporates a comprehensive and broadly worded liability policy which was designed specifically to meet the needs of municipalities and their corresponding risks which are quite different and unique from other commercial risks that are insured under a Commercial General Liability (CGL) policy. When comparing fonns of coverage, it is important to note that unless the coverage is specifically excluded, it is generally covered, subject to the terms and conditions of the policy. . Liability coverage provided for Bodily Injury, Property Damage, and Personal Injury. . Separate Limit of Liability applies. . No Annual Aggregate limit is applicable . Coverage is provided on an Occurrence basis. . Broad form Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. · Cross Liability is included. . Coverage applies Worldwide. The following coverages are included to the full policy limit, unless specified otherwise: . Employers' Liability Contractual Liability Liquor Liability Tenants' Legal Liability Sewer back-up Liability Professional Liability on an Occurrence basis (e.g. Building Inspection Services, Medical Malpractice). Malpractice Liability Watercraft Liability Products Liability Wrongful Dismissal coverage is included, subject to the limits specified in the Summary of Coverage pages. No exclusion for sexual, physical or mental abuse applies to the entity. . . . . . . . . . . Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 13 - __''''~''''''"Md~...,'m'_'_.'.'M~,...,.",,,,,,,,,.,.~... '~"""~''''~"'""'~'~^''_''''.''''''''_'_'_ ._~__, '..J 11& ERRORS AND OMISSIONS LIABILITY INSURANCE Features This is a claims-made policy that protects the municipality from liability imposed upon it by a court of civil law for compensatory damages because of a wrongful act causingfinancialloss to a third party. Claims for Wrongful Acts causing financial loss to a third party can range from, but are not limited to, negligence in building inspection, zoning, planning, passing by-laws, failing to enforce by-laws, to misrepresentation. abuse of power and acting in bad faith. · Separate Limit of Liability applies. · No Annual Aggregate limit is applicable. · Broad form Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. · Administration of Employee Benefit Programs is included to the full policy limit (no aggregate limit applies). · Coverage applies Worldwide. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 14 - NON-OWNED AUTOMOBILE INSURANCE 117 Features This policy provides liability protection against claims arising out of accidents involving vehicles not owned by the municipality, but operated on its behalf. · The main coverage is as per S.P.F. No. 6-Non-Owned Automobile Policy. · A separate limit ofliability applies. · Coverage is extended to provide excess automobile liability insurance, to the policy limit, for Councillors, Board Members, Officers, Employees, and even Volunteers for claims arising while driving their own vehicles on municipal business. · Physical damage coverage, as specified in the Summary of Coverage pages, is provided for the municipality's contractual and legal liability for damage to vehicles not owned by the corporation or any other insured. (Note: Unlike standard industry wordings, we do not restrict this coverage to "hired" automobiles only.) Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 15 - ~ 118 ENVIRONMENTAL LIABILITY INSURANCE Features This is a claims-made policy that protects the municipality from environmental liability for claims because of bodily injury, property damage and the prevention, control, repair, clean-up or restoration of environmental impairment. Cowan's comprehensive wording, among other things, does not limita municipality to claims arisingfrom a sudden and accidental event. . Separate limits of liability apply specifically to this coverage. . Broad form Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. . Broad definition of Environmental Impairment applies. . Coverage is included for sudden and accidental events and for liability resulting from events that occur gradually and over a period of time (i.e. not limited to sudden and accidental claims). . Coverage is included for liability arising out of the escape of contaminants from properties previously owned, leased or operated by the municipality. . Coverage is included for impairment caused by owned watercraft. . Coverage applies Worldwide. . No exclusion fi)r landfill sites, open or closed. . No exclusion for fuel tanks, above or underground. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 16 - 119 CRIME INSURANCE Features This policy provides protection to the municipality for the loss of money, securities and other property through the fraudulent or dishonest acts of employees and others. · Coverage is provided on a Commercial Blanket Bond package, and may include: Employee Dishonesty, Loss of Money and Securities, Money Order and Counterfeit Paper Currency, and Depositors Forgery. · Audit expense coverage is in addition to the overall bond limit, to the maximum amount provided in the Summary of Coverage pages. · The definition of "employee" is extended to include all persons holding positions in the municipality's service who are not compensated, and includes Members of Council, Members of all Boards, Commissions and Committees appointed by and under Council's jurisdiction. · The definition of "messenger" is also extended to include persons not compensated. · No deductible applies. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 17 - '" 12() COUNCILLORS' ACCIDENT INSURANCE F ea tures This policy provides accident insurance coverage for the benefit of the municipality's elected officials. All benefits are payable in addition to any other benefits that the injured person may be in receipt of . Coverage applies while the individual is acting within the scope of their duties, including all travel required. . No aggregate limit applies. . No age restriction applies. .. . Coverage is not limited to "authorized" travel only. . Weekly indemnities are paid in full regardless of the individual's employment status (e.g. retired, self-employed, etc.). . Weekly indemnity for Total Loss of Time is payable for life. . A schedule of Dismemberment Benefits is provided and payable as set out in the policy. . Funeral expenses are included up to $10,000. . Blanket Accident expenses are included up to $10,000. and include dental, chiropractic, registered nurse, podiatrist, ambulance, drugs, crutches, etc. Please refer to the insurance contract for all limits, terms, conditioDi; and exclusions that apply. Frank Cowan Company ll.imited - 18 - CONFLICT OF INTEREST INSURANCE Features This policy provides for the reimbursement of legal fees and expenses incurred by the elected or appointed members of Council who are charged under the Municipal Conflict of Interest Act, provided that a courtfinds (1) there has been no contravention, or (2) contravention has occurred by reason of inadvertence, remoteness, or insignificance, or (3) contravention has occurred by reason of a bona fide error in judgement. . Coverage is provided in respect of each individual Insured's claim to the maximum limit specified in the Summary of Coverage pages. . Separate limit of insurance applies to this coverage. . No annual aggregate limit applies. . Coverage is extended to include any member of a Board, Commission, or Committee of the Insured as defmed in the Municipal Conflict of Interest Act. . Coverage is also included for any subsequent proceedings under this Act. . The Insured selects and instructs legal counsel with no intervention by the insurer. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 19 - ~ 121 ..i 122. IJEGAL EXPENSE INSURANCE Features This policy provides for the reimbursement of legal fees including disbursements incurred by the insured in defence of charges laid for an alleged offence under any Statute of the Province of Ontario (exceptfor the Highway Traffic Act and the Municipal Conflict of Interest Act). Some of the more common Statutes where exposure exists include: Environmental Protection Act, Freedom of Information and Protection of Privacy Act, Occupational Health and Safety Act, Ontario Water Resources Act, and Pesticides Act. · Broad form DefInition of Insured applies, including: Councillors, Employees, Statutory OffIcers, FirefIghters, Volunteers, Boards, Commissions, and Committees. · Separate limits of insurance apply to this coverage. · Coverage applies to both "guilty" and "not guilty" outcomes if applicable. · The Insured selects and instructs legal counsel with no intervention by the insurer. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 20- PARTB PROPERTY Frank Cowan Company Limited - 21 - 123 .....' 124 PROPERTY INSURANCE Features This policy provides "All Risk" coverage to protect the municipality's assets from direct physical loss or damage. Coverage is provided on a blanket basis, which means that the municipality will not be jeopardized should the value of an asset be undervalued in the schedule and suffer a total loss. Rather, the municipality will enjoy the protection of the blanket limit of all assets combined. Another key feature of the Cowan wording is that the replacement cost coverage provides replacement of historical or unique buildings with materials as similar as possible to preserve their heritage. · Broad defInition of property insured is included. · No co-insurance clauses apply. · Insured is not required to provide a signed statement of values and policy does not contain a stated amount clause. · Replacement Cost coverage is provided (unless specifIcally stated otherwise). · Worldwide coverage is included. · Replacement on same site is not required. · No restriction on property in transit and coverage is provided to policy limit. · Newly acquired property is automatically included with no limit other than the policy limit. · Pennission is granted for the following: to make additions, alterations and repairs (no limit other than the policy limit), for any property to remain vacant or unoccupied, to use any property for any purpose, and to keep and use materials as usual and necessary. · Sewer back-up coverage is included. · By-law coverage is included to the policy limit. · Debris removal (including EnvironmentallPollution Clean-up) is included to the policy limit. Frank Cowan Company Hooted - 22- Property Insurance Features continued 125" · The following coverages, if applicable, are included to the limit specified in the Summary of Coverage pages: Valuable Papers, Accounts Receivable, Extra Expense (including Interruption by Civil Authority), and Media (unless included under Data Processing Rider) · The following coverages are also available, if applicable (please refer to the Summary of Coverage pages): Data Processing System and Equipment, along with Media and Extra Expense, Fine Arts, Exhibition Form, and Business Interruption. · If a single loss involves both the Automobile and Property Insurance policies, the Property policy deductible is waived only on any insured property attached to the automobile. · One deductible applies should there be a loss involving both the Property and the Boiler and Machinery Insurance policies. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 23- 126 BOILER AND MACHINERY INSURANCE Features This policy insures sudden and accidental mechanical breakdown to boilers, pressure vessels, and other equipment including resulting damage, all of which is generally excluded under a Property Insurance policy. Examples of common types of breakdowns insured would include: cracking, bulging, burning, explosion, mechanical breakdown and electrical burnout. This insurance also provides inspections and certification services as required by law. · Comprehensive Blanket coverage provided. · Broad defInition of Object, includes communication equipment and production machinery. · Settlement is based on repair or replacement cost (no depreciation factor). · Broad defInition of Accident applies. · New locations and newly installed objects are automatically included. · Computer Control Equipment is included when used solely to control or operate an insured object. · The following coverages, if applicable, are included to the limit shown on the Summary of Coverage pages: Extra Expense, Water Damage, Ammonia Contamination, Expediting Expenses, Hazardous Substance (including PCB Contamination), Loss of Arena Revenues, Spoilage, Professional Fees, Data and Media, and By-Law Cover. · One deductible applies should there be a loss involving both the Boiler and Machinery and Property Insurance policies. Please refer to the insurance contract for all limits, terms, (:onditions and exclusions that apply. Frank Cowan Company l..limited - 24- PART C AUTOMOBILE Frank Cowan Company Limited - 25- 127 128 AUTOMOBILE FLEET INSURANCE Features This policy provides protection for all claims arising out of the use or operation of licensed automobiles owned or leased by the municipality. Coverage is provided as per the Statutory Automobile Owner's Policy. A special Cowan endorsement is added to enhance the basic policy coverage. · Coverage is provided for Liability, Accident Benefits, Uninsured Automobile, and Direct Compensation - Property Damage. · Loss or Damage coverages are available as requested by the Municipality to protect their licensed vehicles from physical damage caused by an insured peril. · Coverage is automatically extended to include: newly acquired vehicles, inappropriately licensed drivers, permission to carty explosives, permission to rent or lease, damage caused by freezing of Fire-Fighting Apparatus, and permission to carty passengers for compensation. · Our Replacement Cost coverage is unique. It provides repairs or replacement of vehicles with no deduction for depreciation. On a partial loss, repair estimates are calculated by using all new parts to repair damage. On a total loss, the municipality has the option of purchasing a new vehicle, or accepting a cash settlement for the amount it would cost to purchase a new vehicle. · Guaranteed Amount coverage can be provided on specified vehicles. Repairs or replacement will be undertaken without deduction for depreciation up to the Guaranteed Amount shown on the automobile schedule attached to the policy. · Valued coverage can be provided on specified vehicles, usually those that are obsolete, would not be replaced, or would be replaced with a used vehicle. · Actual cash value (ACV) coverage can be provided on specified vehicles. · If a single loss involves both the Automobile and Property Insurance policies, the Property policy deductible is waived only on any insured property attached to the automobile. Please refer to thle insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 26- GARAGE AUTOMOBILE INSURANCE 129 Features This policy provides protection for all claims arising out of a municipality's garage operations and its legal liability for customer vehicles. Coverage is provided as per the Statutory Garage Automobile Policy. Garage operations include not only repair garages, but also storage garages and parking lot operations. . Coverage is provided for Third Party Liability for bodily injury or property damage as per the limit specified in the Summary of Coverage pages. . Coverage is also provided for Accident Benefits, Unfusured Automobile, and Direct Compensation Property Damage. · Loss or Damage coverage is available as requested by the municipality to protect its legal liability for a customer's automobile from physical damage caused by an insured peril, while in the care, custody or control of the municipality. · Physical damage coverage for customer vehicles can include Collision, and Comprehensive or Specified Perils coverage. Please refer to the limits and deductibles for the selected coverage as specified in the Summary of Coverage pages. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 27-