Loading...
HomeMy WebLinkAboutFIN 16-13From: Paul Bigioni Director, Corporate Services & City Solicitor Report to Executive Committee Report Number: FIN 16 -13 Date: June 10, 2013 Subject: 2013 Property and Liability Insurance Renewal (Six Months) Recommendation: That Report FIN 16 -13 of the Director, Corporate Services & City Solicitor regarding the insurance renewal be received; 2. That the City of Pickering renew its property, liability and other insurance policies through the Frank Cowan Company for the period July 1, 2013 to January 1, 2014 in the amount of $391,913 ( plus applicable taxes) and inclusive of terms and conditions acceptable to the (Acting) Division Head Finance & Treasurer; 3. That L.V. Walker & Associates be confirmed as the City's Adjuster of Record for property, liability and other insurance and related matters; 4. That the (Acting) Division Head, Finance & Treasurer be authorized to settle any claims including any adjusting and legal fees, where it is in the City's interest to do so; 5. That the (Acting) Division Head, Finance & 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 its elected officials and staff; and, 6. 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 essentially on the same or improved terms and conditions as in past years, with coverage for the Library, its Board and its employees. Financial Implications: The insurance premium has been provided for in the approved 2013 budget and the renewal premium cost is within the 2013 budgeted amount. The premium increase is approximately 6.32% over last year adjusted for the six month renewal period. Report FIN 16 -13 June 10, 2013 Page 2 Discussion: 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 on 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 those of the prior year. The savings were transferred to the Self Insurance Reserve. In our opinion, this program has served the City well, and today there is almost $1 million in this reserve. Recommendation 5 provides the (Acting) Division Head & Treasurer with the authority to continue to review and adjust insurance coverages where appropriate during the year to reflect business requirements and current market and business environment conditions. Change in Deductible Limits Every year, staff review the proposed insurance policy terms and deductible limits to ensure that the City is effectively managing its premium cost in relation to its claims history. The City's property (building) claims experience for the last five years is presented below: Property Claims Experience Year Number I Incurred Amount ($1 2008 -2409 _ 1 12,988 2009 -2010 0 0 2010 =2011 p 2011 -2012 1 2,500 20'12 -2013 .- � - 0 - 0 Total 12 15,488 As the above table indicates, the frequency of claims and corresponding loss has been relatively low. Based on the above information, the property deductible is increasing from $10,000 to $100,000 resulting in full year premium savings of $22,664. Insurance Renewal Period — Six Months The current insurance renewal term is for six months and expires on January 1, 2014 in contrast to the City's traditional twelve month renewal period. City staff plan on issuing a Request for Proposal (RFP) for its insurance program during the next few months. Staff are now conducting interviews with insurance consultants and the consultant will be used to prepare and evaluate the RFP to ensure that the City has the best possible insurance program within its budget. In addition, the insurance consultant will review the various insurance policy terms, coverages, exclusions and conditions submitted by the bidders to ensure that the City is adequately protected. This is a crucial step in the Report FIN 16 -13 June 10, 2013 Page 3 RFP process due to the fact that the true value if of the insurance program is reflected in the policy terms and conditions. The preliminary discussions with the insurance consultants recommend having an extended "RFP" period to ensure that the City can receive as many proposals as possible. An indirect benefit of the six month renewal is the fact that the insurance renewal period will now reflect the City's fiscal year and therefore, the budgeted amount for insurance will now be based on actual costs in contrast to professional estimates. Service to our Residents Regrettably, insurance claims or incidents do occur. 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 assure them that the claim is being investigated by the City's Insurance Adjuster. The City's Insurance Adjuster has many years of local municipal insurance experience, which the City uses as an asset to investigate and settle claims. The City's Insurance Adjuster is familiar with the City and its municipal infrastructure and this experience has assisted in reducing 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 intervene to work towards a solution. The strategic advantage of the "local service delivery model" 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 who, in the majority of situations, are City residents. Attachments: None Prepared By: Stan Karwowski (Acting) Division Head, Finance & Treasurer Approved / Endorsed By: Paul Bi iAi Directo Corp ate Services & City Solicitor Report FIN 16 -13 Recommended for the consideration of Pickerina Q'ItL Council Tony Prevedel, P.Eng. Chief Administrative Officer June 10, 2013 Page 4