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HomeMy WebLinkAboutCS 55-05PICKERING REPORT TO COUNCIL Report Number: CS 55-05 Date: June 21,2005 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2005/2006 Property and Liability Insurance Program Recommendation: It is recommended that Report CS 55-05 of the Director, Corporate Services & Treasurer be received and that; the City of Pickering renew effective June 27, 2005, its property, liability and other coverages through the Frank Cowan Company for the period July 1, 2005 to July 1, 2006 inclusive on terms and conditions acceptable to the Director, Corporate Services & Treasurer; 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; 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 protect the assets of the City and it's elected officials and staff; and, the appropriate officials of the City of Pickering be given authority 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 55-05 Subject: 2005/2006 Property & Liability Insurance Date: June 21, 2005 Page 2 Financial Implications: The premium renewal cost has been provided for in the various cost centers through the approval of the 2005 budget by Council and the renewal premium cost is within the 2005 budgeted amount. The City's premium renewal is currently below the industry renewal trend rate of 15% due to the City's long- term business relationship with the insurance carriers ("loyalty discount") and due to the City's claims history. Staff examined increasing the current deductible from $10,000 to $25,000 but the corresponding savings in premiums did not warrant the additional risk. 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. As a result the balance of the Reserve at December 31, 2004 was approximately $940,000. The 2005 budget anticipated a premium increase based on current industry trends and also due to the increase in assets covered through the policy. Our renewal is below the budgeted amount which continues in part to reflect our claims experience based on our risk portfolio or municipal services provided. 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. Current External Insurance Environment Majority of insurance companies transfer part of their risk covered under insurance policies to another insurer known as the "reinsurer". To put another way, insurance companies try to spread or transfer part of their risk to another company. The transfer of the risk is a prudent strategy to avoid a"bad year" when an insurance company may be faced with claims greater than the premium collected. The global re-insurance Report CS 55-05 Subject: 2005/2006 Property & Liability Insurance Date: June 21,2005 Page 3 market consists of seven or eight major companies. Last year, natural disasters such as hurricanes in Florida, typhoons and earthquake in Japan could generate claims in excess of $15 Billion US. In addition, claim costs from Provincially downloaded services such as ambulance and roads are now impacting the insurance/re-insurance industry. These claims/payments will probably be covered by the reinsurance industry which in-turn recovers these losses through higher premiums. Insurance companies continue to experience, generally Iow returns from their investments where traditionally, investment earnings have been used to offset or reduce premiums. The Value of Lonq-term Business Relationship After September 11, 2001, the insurance industry was faced with a "hard" market. Some insurance companies left the municipal field and others demanded substantially higher premiums. The City found itself in the enviable position of having maintained a long standing business relationship with the Frank Cowan Company. This long- standing business relationship has translated into lower premium increases or a loyalty discount to the City in comparison to those municipalities who left the Frank Cowan Company and then rejoined in 2002. The City is fortunate to have as an asset a long- term business relationship with the Frank Cowan Company, which as proven to have delivered lower premium increases to the City. The City also has an effective and positive business relationship with its insurance adjuster (L.V. Walker & Associates). Claims received by the City are quickly sent directly to the insurance adjuster and on average the insurance adjuster follows-up with an initial or introductory contact within two business days. 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. The City continues to reduce or manage risk through effective business processes and or policies. Last year, the City implemented a revised City alcohol policy which now requires any individual or organization to purchase $1.0 million general insurance liability coverage and to employ bartenders who have the "smart serve" training. These requirements not only reduce the City's risk, but more importantly protect the individual or organization renting the City's facilities. Recently, City staff invited a representative of the Frank Cowan Company (who has extensive special events experience) to review the facility and events management of the Frenchman's Bay Festival. He inspected the facility, reviewed the operation of the event with City staff and was satisfied with the risk management strategy being implemented. Attachment 1 provides a "program summary" of the various insurance coverages. Conclusion The City's Insurance and Risk Management Programs appear to be working satisfactory. The City has benefited from its long standing relationship with the Frank Report CS 55-05 Subject: 2005/2006 Property & Liability Insurance Date: June 21, 2005 Page 4 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: Stan Karwowski Manager, Finance & Taxation Approved / Endorsed By: Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Copy: Chief Administrative Officer Recommended for the consideration of PickeringCit Cou ' '~he"m~ ~.-Quir~Chief AdCninistrat~fficer ' Cowan Frank Cowan Company ATTACHMENI':N t~' TO I:LEPOP, T#?' ,_4'5"- Off 2005 Municipal Insurance Program 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 N0J 1V0 This is a summary. Nothing herein alters the terms, conditions and exclusions contained in the printed insurance contract(s). REF: 60275/es June 9, 2005 randy, edwards@frankcowan.com 1.800.265.4000 T/519.458.4331 F/519.458.4366 About the Frank Cowan Company Leader in Public Entity Insurance Since 1927, Cowan has grown to become one of Canada's leading providers of public entity insurance. Cowan has been a pioneer in the development and implementation of innovative insurance programs for the Municipal, Health Care, and Education sectors. Cowan Insurance Group The Frank Cowan Company Limited is a wholly owned subsidiary of the Cowan Insurance Group, whose other wholly owned subsidiaries include Cowan Insurance Brokers Limited and Cowan Wright Beauchamp Limited, 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 Wright Beauchamp Limited 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 We are more than just an insurance provider...we are a trusted partner in insurance and risk management. 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. Our relationships and network allow us to continually develop innovative, cost-effective products and services tailored to the risks of individual clients. Financial Stability Cowan, as a Managing General Agent of public entity portfolios, represents a group of select insurers of exceptional reputation and financial stability, which 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- Cowan Service Solutions More Than Just Insurance Cowan offers a full range of services to assist in the management and reduction of risk, which is equally vital to our clients. Risk Management, Claims Management and our other value-added services were initiated by Cowan and have evolved throughout our history of specialized services. Most often we can provide the services listed below at no additional cost to the client. Liability Hazard Assessment Seminars & Staff Training Our Municipal clients are involved in a wide range of activities and operations designed to service the needs of their constituents. The diverse nature of these activities leads to various potential public liability situations; we work with our clients to provide specific hazard identification and analysis of these exposures. We deliver a wide range of presentations to our Municipal clients on an ongoing basis that provide continuous education for our clients. Systems & Processes We help our clients develop systems and processes for consistency within their operations and specifically focus on documentation, reporting and investigation of claims and accidents. Contractual Review Publications, Bulletins & Information Packages Claims Management Our experience contributes insight on the suitability and effectiveness of liability transfers and appropriate insurance and indemnity clauses within your various contracts. Because constant two way communication is important, our website is available on a 24 hour basis for access to information on our Services, Publications and programs. Anyone in your organization can visit us at www.frankcowan.com to keep informed of common issues and solutions. We handle your claim fairly and efficiently. Claims that are made against you are handled with the consistent strategy of defending or discouraging those claims that are without merit, or reaching a reasonable settlement on claims that do merit payment. Throughout this process, your interests are paramount and your input is sought. Detailed claims progress reports are produced and can be organized by type of loss or department to suit your needs. Frank Cowan Company Limited -3- MARKETPLACE CONDITIONS The Public 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 at a rate in excess of the premium growth. In addition, insurers and re-insurers have become extremely cautious about public entity liabilities because of the continuing downloading of services by the provincial government, namely roads and ambulance services. Insurers are now experiencing the impact of the claims from these downloaded services and the impact they are having on the public entity portfolio. During the late 1990's, municipalities and other public entities have enjoyed favourable insurance costs due to "soft market" conditions fuelled primarily by a good return on investments by the insurance industry. We are now witnessing premium increases in the general insurance industry driven by losses that have vastly outpaced premiums and the reduction on investment income being received by the insurers. As a result, all insurance buyers are being affected as insurers and re-insurers are requiring more premium income to meet financial solvency requirements, creating a "hard market" condition. As a result of the current "hard market" conditions, a number of insurers have withdrawn from the public entity marketplace or have had coverage limitations imposed upon them by their markets that do not allow them to effectively address the needs of public entity clients. Frank Cowan Company Limited, as long-term specialist in public entity insurance, continues to receive the support and capacity of our markets. We continue to provide a long term stability for the insurance and risk management needs of our public entity clientele, with our policies and services ever changing to reflect the continuing exposures brought about by downloading and new opportunities public entities now enjoy as a result of the new Municipal Act. Cowan has for many years been able to provide a consistent and continuously stable market for public entities. We are confident that our product and pricing will continue to reflect this position. The terms and conditions for the 2005 Renewal will be subject to the following: Continued support of our markets. No major changes in the loss experience of your portfolio. No major changes in the re-insurance market that would adversely affect the underlying insurance. Frank Cowan Company Limited -4- PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS PART A - CASUALTY 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) All Perils Physical Damage Limit Deductible Environmental Liability Liability of Protection per claim Annual Aggregate Limit Self-Insured Retention $ 25,000,000. $ $ $ $ $ $ $ $ $ $ 25,000. 25,000. 250,000. 250,000. 5,000. Included Included Included 25,000,000. 10,000. 25,000,000. 500,000. 500. 1,000,000. 2,000,000. 10,000. Frank Cowan Company Limited -5- PROGRAM SUMMARY SUMMARY OF COVERAGES 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 $ 2,0OO,OOO. Included Included Included $ 100,000. $ 100,000. Councillors' Accident - City MayodRegional 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 Deductible) Weekly Income - Total Disability Weekly Income - Partial Disability $ 100,000. $ 500. $ 250. Municipal Conflict of Interest Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim (No Annual Aggregate Limit) 100% $ 100,000. Legal Expense Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim Annual Aggregate Limit 100% $ 100,000. $ 25O,0OO. Frank Cowan Company Limited -6- PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS PART B-PROPERTY 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 $ 125,211,000. $ 500,000. $ 500,O00. $ 1,000,000. $ 500,000. $ 2,584,5O0. Checkroom Liability $ 5,000. Data Processing System and Equipment Media Extra Expense $ 1,440,800. $ 47,000. $ 50,000. Fine Arts Form Exhibition Form $ 2,000. As Per Lists Provided Deductible $ Exceptions: Checkroom Liability, Fire Training Trailer, Fine Arts Form and Exhibition FormS - Peril of Flood $ - Pedl of Earthquake 3% or Minimum $ *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. 10,000. 1,000. 25,000. 100,000. Frank Cowan Company Limited -7- PROGRAM SUMMARY SUMMARY OF COVERAGES 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 $ - Dunbarton Indoor Pool, 655 Sheppard Ave. E., Pickering $ - Pickering Recreation Complex, 1867 Valley Farm Road, Pickering $ Spoilage - Goods under Refrigeration $ Professional Fees $ Data and Media $ By-Law Cover Deductible $ 50,000,000. 500,000. 500,000. 50O,0OO. Included 500,000. 94,500. 600,000. 100,000. 1,790,000. 50,000. 500,000. 10,000. Included 10,000. Frank Cowan Company Limited '8- PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS i~ART C - AUTOMOBILE Automobile Fleet Liability Limit Deductibles Section 3 (Third Party) Section 6 (Direct Compensation) No Physical Damage applies to 1951 Antique Pumper (Parades) All Perils applies to All Other Vehicles $ 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,O00,O00. $ 200,000. $ 5oo. $ 300,000. $ 5oo. Frank Cowan Company Limited '9- COMPREHENSIVE INSURANCE PROGRAM COVERAGE FEATURES 2005 - 2006 Frank Cowan Company Limited -10- PART A CASUALTY Frank Cowan Company Limited -11 - 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 forms 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 furl policy limit, unless specified otherwise: · Employers' Liability · Contractual Liability · Liquor Liability · Tenants' Legal Liability · Sewerback-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 -12- ERRORS AND OMISSIONS LIABILITY INSURANCE Features This is a claims-made poficy that protects the municipality from liability imposed upon it by a court of civil law for compensatory damages because of a wrongful act causing financial loss 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 -13- NON-OWNED AUTOMOBILE INSURANCE 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 of liability 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 -14- 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 limit a municipality to claims arising from 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 for 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 -15- CRIME INSURANCE Features Th/s 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 compensatea. · No deductible applies. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited -16- COUNCILLORS' ACCIDENT INSURANCE Features This policy provides accident insurance coverage for the benefit of the mun/cipality'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, conditions and exclusions that apply. Frank Cowan Company Limited -17- CONFLICT OF INTEREST INSURANCE Features This policy provides for the reimbursement of legal fees and expenses recurred by the elected or appointed members of Council who are charged under the Municipal Conflict of Interest Act, provided that a court finds (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 defined 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 -18- LEGAL 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 (except for 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 -19- PART B PROPERTY Frank Cowan Company Limited - 20 - PROPERTY INSURANCE Features This policy provides "Afl 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. · Permission 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 Environmental/Pollution Clean-up) is included to the policy limit. Frank Cowan Company Limited - 21 - Property Insurance Features continued 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, Summary of Coverage pages): if applicable (please refer to the 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 - 22 - 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: One deductible applies should thera be Machinery and Property Insurance policies. 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. a loss involving both the Boiler and Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 23 - PART C AUTOMOBILE Frank Cowan Company Limited - 24 - 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, - inappropriatelylicensed drivers, - permission to carry explosives, - permission to rent or lease, - damage caused by freezing of Fire-Fighting Apparatus, and - permission to carry 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 the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 25 - GARAGE AUTOMOBILE INSURANCE 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, Uninsured 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 - 26 -