EXCESS LIABILITY INSURANCE COVERAGE THROUGH PUBLIC RISK - - PowerPoint PPT Presentation

EXCESS LIABILITY INSURANCE COVERAGE THROUGH PUBLIC RISK INNOVATION, SOLUTIONS, AND MANAGEMENT (PRISM) JPA

July 21, 2020

BACKGROUND

• The City is self-insured for the first $2 million of liability

coverage and has historically carried $20 million of excess liability insurance, insured by a variety of carriers.

• Global

catastrophic events, civil unrest related to excessive force cases, and years of low rates have created some instability in the overall marketplace.

• Certain

lines

• f

insurance coverage have been impacted more heavily than others and there has been a significant shift in the liability market.

BACKGROUND

• The City’s insurance broker, Alliant Insurance Services,

solicits options for excess liability insurance coverage

• n an annual basis.
• For FY 2020/2021, the City’s current liability carrier,

Allied World Assurance Company (AWAC), revised its quotes for coverage including Law Enforcement due to excessive force exposure occurring nationally.

• AWAC initially increased the self-insured retention

(SIR) requirement for police professional retention from a $2M SIR to a $5M SIR for law enforcement liability with a 75% increase in premiums.

• The

City’s insurance broker, Alliant, subsequently requested additional proposals and options including a revised proposal from AWAC.

ANALYSIS

• AWAC subsequently quoted a stand alone option to

reduce the police related retention from $5M to $3M. However, this still represents a $1M increase in SIR with a 75% increase in premiums.

• A proposal was also received from the Public Risk

Innovation, Solutions, and Management (PRISM) JPA. PRISM Is a member directed risk sharing pool with 40 years of liability and risk management experience. The proposal retains the City’s $2M SIR.

ANALYSIS

• PRISM’S

program also provides these additional benefits:

• $25M limit as opposed to our current limit of $20M
• Limit is not aggregated, limit applies per occurrence
• Additional risk control services including a loss

control subsidy and actuarial fund

• PRISM

membership includes 95%

• f

California Counties and 70% of California Cities and has also been accredited with excellence continuously by the California Association

• f

Joint Powers Authority (CAJPA).

FISCAL ANALYSIS

• The proposal from PRISM retains the City’s $2M SIR

and increases coverage to $25M at a premium of $346,869 which represents an increase of $106,566

• ver AWAC’s proposal.
• Funds

totaling $92,153 are included in the self insurance fund in the FY 2020/2021 budget.

RECOMMENDATION

• Adopt Resolution Number 20-44 to join Public Risk

Innovation, Solutions and Management JPA

• Authorize the City Manager and City Clerk to execute

the Joint Powers Agreement

• Authorize the City Manager and City Clerk to execute

the Memorandum of Understanding for the General Liability Program and appropriate additional funds to cover increased premium costs.