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10.B.

Meeting Date:	04/18/2017
From:	Dean Coughenour, Assistant to City Manager - Risk Management

TITLE:

Consideration of Insurance Premium Renewals: Workers' Compensation, Property and General Liability Policies.

RECOMMENDED ACTION:

1) Approve the renewal of our Workers' Compensation agreement with Copperpoint Mutual with an estimated annual cost of $576,000.
2) Approve the renewal of our Property insurance agreement with A.I.G. with an estimated annual cost of $199,321.
3) Approve the renewal of our General Liability, Auto, Umbrella and associated lines of coverage with Travelers Insurance with an estimated annual cost of $685,389.

Executive Summary:

By renewing our Workers Compensation coverage with CopperPoint Mutual, the City will save an estimated $154,000 next fiscal period over this fiscal period. Since policy ending 6/30/14 we have saved over $1,150,000 in renewal premium verses premium paid in fiscal 2013-2014 not withstanding an increase in exposures. The estimated annual premium for 2016-2017 is less than the total paid during the 2003-2004 fiscal period. There has been no change in coverage.

By renewing our property coverage with AIG the City will save an estimated $2,191 next fiscal period over this fiscal period. Although we have added additional property and AIG has included enhanced coverage this year, the policy premium has been reduced.

By renewing our General Liability, Auto, Umbrella and associated lines of insurance coverage with Travelers Insurance Company the City will expend $25,223 more next fiscal period over this fiscal period. This is primarily due to an adverse loss the City experience this year in relation to a January 2011 claim. There has been no change in coverage. We have saved $1,400,000 in renewal premium verses premium paid in fiscal 2013-2014 on our General Liability, Auto, Property and related coverage not withstanding an increase in exposures.

Financial Impact:

The net fiscal impact of insuring all lines of coverage is a reduction in expenditures next fiscal year by $131,000.

Policy Impact:

None

Connection to Council Goal, Regional Plan and/or TeamFlagstaff Strategic Plan:

None

Has There Been Previous Council Decision on This:

Background/History:

The City of is required to carry Workers' Compensation coverage per Arizona Statute. The City is currently insured with Copperpoint Mutual, formerly SCF of Arizona and have been for over ten years. Because of the efforts of our employees and the subsequent reduction in injuries, we have able to secure a reduction in each of our renewals over the last four years. The City of Flagstaff carries insurance to protect the City from unexpected financial loss. Main coverage areas include auto, general liability, excess liability ($20 million), property coverage, crime, cyber, airport liability in the amount of $40 million, flood and specific properties, employers liability, errors and omission coverage, and other supplemental coverages as appropriate. Our current carrier for most lines of coverage is Travelers Insurance. For our property coverage, we are insured with AIG. The City has a $75,000 self insured retention on both general and auto liability claims. This self insured retention applies to both legal fees incurred as well as settlement amounts. Recent adverse claim activity from a January 2011 claim, is likely to cause a modest increase in the general liability portion of our renewal in FY 2018.

Attachments
Renewal Presentation