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HomeMy WebLinkAbout2012-06-20 PACKET 04.B.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 6/20/2011 • PREPARED BY CITY CLERK CARON STRANSKY ORIGINATING DEPARTMENT STAFF AUTHOR COUNCIL ACTION REQUEST Consider renewal of the package policy with a $50,000/$100,000 /$1,000 deductible and volunteer accident coverage through the LMCIT and outlined in the Insurance Proposal from Wells -Fargo Insurance Services. STAFF RECOMMENDATION Renew the package policy and volunteer accident plan coverage for the 2012 -2013 policy period. BUDGET IMPLICATION ADVISORY COMMISSION ACTION N/A SUPPORTING DOCUMENTS: ❑ MEMO /LETTER: City Clerk Caron Stransky dated June 14, 2012 ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ® OTHER: Insurance Proposal and Coverage Changes ADMINISTRATORS COMMENTS City Administrator Date COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER CITY OF J MINNESOTA COTTAGE GROVE To: Honorable Mayor and City Council Members From: Caron Stransky, City Clerk Date: June 14, 2012 Subject: PACKAGE POLICY AND VOLUNTEER ACCIDENT PLAN The City of Cottage Grove received the attached insurance proposal from our insurance agent, Wells Fargo Insurance Services, for the renewal of our package policy and the accident plan for volunteers. The coverage type and premiums are broken down as follows: Package Policy The package policy includes property, mobile equipment, automobiles, boiler and machinery, crime, employee dishonesty, general liability coverage, and open meeting law coverage. The City carries a $50,000 per occurrence deductible, $100,000 policy period aggregate. Once we exceed the annual aggregate of $100,000, a $1,000 per loss deductible would apply. The deductible under the Boiler and Machinery coverage is $2,500 per occurrence. Overall, our manual premium increased from $177,266 to $184,938, or by $7,672, primarily due to coverage and rate changes to the policies. For example, property rates increased 3% and there were a number of changes in LMCIT's liability, property and other coverage Package Policy: • Property /Mobile /Crime /Open 68,216 69,835 77,592 81,783 Meeting Law • Automobile 24,485 24,525 27,299 27,470 • Boiler & Machinery 5,870 5,963 5,973 6,742 • Bond 1,193 1,198 1,278 1,212 • General Liability 67,369 64,825 63,529 67,731 Total Package Policy: 167,133 169,346 175,671 184,938 Open Meeting Law 1,142 Included in Included in Included in Package Package Package Policy Policy Polic Volunteer Accident 2,175 1,813 1,595 1,450 Total Premium 170,450 168,159 177,266 1 186,388 Package Policy The package policy includes property, mobile equipment, automobiles, boiler and machinery, crime, employee dishonesty, general liability coverage, and open meeting law coverage. The City carries a $50,000 per occurrence deductible, $100,000 policy period aggregate. Once we exceed the annual aggregate of $100,000, a $1,000 per loss deductible would apply. The deductible under the Boiler and Machinery coverage is $2,500 per occurrence. Overall, our manual premium increased from $177,266 to $184,938, or by $7,672, primarily due to coverage and rate changes to the policies. For example, property rates increased 3% and there were a number of changes in LMCIT's liability, property and other coverage Volunteer Accident Plan The accident plan for City volunteers covers volunteers working under the City's direction and control for disability, death, impairment, and medical benefits for any injury while performing volunteer services. The premium decreased $145 from $1,595 to $1,450. 2012 Budget In 2012, the City budgeted $190,700 in the Self- Insurance, 4352 - General Liability expenditure account for package policy coverage. The premium for the accident plan for City volunteers is budgeted in the Self- Insurance, 4148 - Workers Compensation expenditure account. Recommendation Staff recommends renewal of the package policy with a $50,000/$100,000 /$1,000 deductible, and the volunteer accident plan for the April 3, 2012 to April 3, 2013 policy period. /Attachment Coverage Changes The LMCIT Board has approved a number of changes in LMCIT's liability, property, and other coverages for the 2011 -12 underwriting year. Changes will be effective for property/casualty coverage written or renewed on or after November 15, 2011. Property Coverage Changes Data security breach mitigation coverage Coverage has been expanded so that if a member has or believes it has had a data security breach releasing secure or confidential data, LMCIT will pay for the costs to respond to the breach, including legal and information technology consulting, providing notice to affected persons, credit monitoring and identity theft services, and similar things. A covered breach could range from a stolen laptop containing confidential information to the unauthorized use of paper records retrieved from a dumpster. This coverage provides response costs even if a liability claim has not been filed. There is a $250,000 annual aggregate limit for this coverage. Utility power plant engines The definition of replacement cost for electric generators at electric generating facilities was amended to exclude costs necessary to comply with the U.S. Environmental Protection Agency's (EPA) National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, if the equipment did not comply with the standards prior to the loss. Liability Coverage Changes Data security breaches A definition for data security breach claims was written into the liability coverage that mirrors the property coverage definition for these losses. An annual aggregate limit of $2 million was added for these types of claims. Independent contractor exclusion LMCIT's coverage does not extend to independent contractors (except for city ambulance service medical directors). The existing language has been clarified in response to occasional questions LMCIT gets regarding this. Municipal Bankruptcy An exclusion was added to the LMCIT liability coverage for claims which arise from or relate to a city bankruptcy. The goal of this change was to avoid a situation where a bankrupt city's creditors would attempt to use the city's LMCIT liability coverage as an additional asset in the bankruptcy. As explained more fully below, however, coverage has been created for individual officials in these situations. Securities litigation Litigation relating to city debt obligations, including bonds, notes, financing certificates, lease- purchase agreements, or other similar debt instruments or financial obligations, is now within the scope of the existing coverage for Land Use and Special Risk Litigation. Damages and defense costs under Land Use and Special Risk Litigation coverage are covered on a sliding percentage basis, subject to a $1 million annual aggregate limit. Land Use and Special Risk Litigation Coverage Coverage D under the liability coverage document, previously known as "Land Use, Development, Franchise or Enterprise Operations Litigations ", has been renamed "Land Use and Special Risk Litigation." 41Page Insurance Proposal for Presented By: Bill Velin Wells Fargo Insurance Services USA, Inc. 43 MarketPointe Drive, Suite 600 Bloomington, MN 55435 952.830.3000 Main 952.830.3oog Fax Together well .. far City of Cottage Grove Coverages Common Coverage Terms Named Insured City of Cottage Grove Principal Address 7516 80 Street South Cottage Grove, MN 55016 Effective Dates April 3, 2012 to April 3, 2013 This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal Is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 2 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved, 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Named Insured The Named Insured is amended to read as follows: City of Cottage Grove and City of Cottage Grove EDA And any other divisions, subsidiaries and persons and organizations under the control of the Named Insured, and any business entity incorporated or organized under the laws of the United States of America (including any state thereof), its territories or possessions while the person or organization named in Item 1 of the Declarations or the forenamed owns, during the policy period, an interest in such entity of more than fifty percent (SO %). This clause is subject to the acquisition reporting provisions as outlined in the policy. This Insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. you are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 3 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Schedule of Locations Location #1 75168 01h Street South Cottage Grove, MN 55016 This Insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the Insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 4 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Property Carrier League of Minnesota Cities Insurance Trust Limits of Liability $49,608,154 Blanket Real and Personal Property, Property in Open, Scheduled & Unscheduled Equipment Actual Loss Sustained Blanket Business Income, Extra Expense, & Expediting Expense $ 50,000,000 Terrorism Activity Annual Aggregate Limit i - .; _ $ 50,000 Per Occurrence 100,000 Annual Aggregate ** * *If the annual aggregate is exceeded, a $1,000 deductible per claim, per line of coverage applies *See Statement of Values on -line at the League of MN Cities Website for Specific Location Information. This insurance proposal Is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not Intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the Insurance contract between you and the Insurance carrier. Only your insurance carrier may modify the terms of your Insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 5 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Property (coot.) Scope of Coverage includes but is not limited to • Asbestos Clean up, Abatement and Removal - $250,000 Per Location • Loss of Revenue, Extra Expense and Expediting Expense - $5,000,000 Per Occurrence • Demolition and Debris Removal - Direct Physical Damage to Covered Property - 25% of Replacement Cost - No Direct Physical Damage to Covered Property - $50,000 Per Occurrence • Leasehold Interest - $500,000 Per Location • Pollutant Cleanup & Removal - $250,000 Per Location • Errors - $500,000 Per Occurrence • Rental Reimbursement - $25,000 Annual Aggregate • Arson Reward - $5,000 Per Fire Loss • Accounts Receivable - $500,000 Per Location • Valuable Papers and Records - $500,000 Per Location • Extraordinary Expense - $250,000 Annual Aggregate • Utility Services - $100,000 Per Occurrence • Water and Supplemental Flood Coverage - $500,000 Per Occurrence /$500,000 Annual Aggregate This insurance proposal is a descriptive summary of the Insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your Insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 6 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Petro Fund Claims -Made Carrier League of Minnesota Cities Insurance Trust Limits of Liability $ 250,000 Reimbursable Costs and Defense Costs Each Tank Release 250,000 Term Aggregate Deductible Not Applicable This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your Insurance carrier may modify the terms of your Insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the polity's terms and conditions. Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Boiler & Machinery Carrier League of Minnesota Cities Insurance Trust Blanket Limit of Coverage $49,608,154 Per Occurrence Air Conditioners /Compressors Includes Production Machinery $ 2,500 Any One Accident This insurance proposal Is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your Insurance carrier may modify the terms of your insurance policy. You are obliged to read your Insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 8 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Mobile Equipment Carrier League of Minnesota Cities Insurance Trust Limits of Liability $ 3,213,826 Scheduled Equipment Valued over $25,000 561,685 Unscheduled Equipment Valued under $25,000 $ 50,000 Per Occurrence 100,000 Annual Aggregate ** Scope of Coverage includes but is not limited to ® Perils Insured Against - Special Form Valuation - Replacement Cost 100% Coinsurance Note: ** If the annual aggregate is exceeded, a $1,000 deductible per claim, per line of coverage applies. *See Schedule of Equipment on -line at League of MN Cities This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal Is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 9 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages w7 ,,"tr Carrier League of Minnesota Cities Insurance Trust Limits of Liability Deductible Blanket Covering $ 250,000 Forgery or Alteration Money & Securities $ 50,000 Per Occurrence 100,000 Annual Aggregate ** ** If the annual aggregate is exceeded, a $1,000 deductible per claim, per line of coverage applies. This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 10 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Carrier League of Minnesota Cities Insurance Trust Limits $ 1,000,000 Faithful Performance Coverage Deductible $ 50,000 Per Occurrence 100,000 Annual Aggregate ** ** If the annual aggregate is exceeded, a $1,000 deductible per claim, per line of coverage applies. Note: Quote is subject to completion of Bond renewal application This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 11 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages General Liability Claims -Made Carrier League of Minnesota Cities Insurance Trust Limits of Liability $ 2,000,000 1,200,000 2,000,000 50,000 1,200,000 1,000,000 2,000,000 2,000,000 100,000 Retroactive Dates Products & Completed Operations Aggregate Each Occurrence Electro Magnetic Fields Aggregate Fire Legal Liability (Any One Fire) Limited Pollution Liability (Including Lead & Asbestos) Land Use or Development Litigation Failure to Supply - Annual Aggregate Mold Claim Limit - Annual Aggregate Outside Organization Claim Limit Municipal Liability 4/03/87 Municipal Limited Pollution 9/12/88 Deductible 50,000 Per Occurrence 100,000 Annual Aggregate ** ** If the General Annual Aggregate is exceeded, a $1,000 deductible applies per claim, per line of coverage This insurance proposal Is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 12 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages General Liability Schedule Rating Basis Operating Expenditures Cost $ 16,057,435 Streets Miles 156 Golf Carts Cars 75 Pec Centers, Arenas, Community Centers Area 47,716 Liquor Off Sale > $249,999 Stores 1 Independent Contractors Cost 23,968,890 E &O Other 5 Year Prior Acts over 12,000M Cost 46,355,305 This Insurance proposal Is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. it should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 13 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Automobile Carrier League of Minnesota Cities Insurance Trust Limits of Liability lif yn3bof $1,200,000 1 Combined Single Limit for Bodily Injury and Property Damage BASIC 5 Personal Injury Protection 200,000 6 Uninsured /Underinsured Motorists 1,000,000 8,9 Hired or Non -Owned Auto Liability Deductible Automobile Symbols 1 = Any Auto 2 = All Owned Autos 3 = Owned Private Passenger Autos 4 = Owned Autos Other Than Private Passenger 5 = All Owned Autos Requiring No -Fault Coverage 6 = Owned Autos Subject to Compulsory U.M. Law 7 = Autos Specified on Schedule 8 = Hired Autos 9 = Non -Owned Autos *See Schedule of Vehicles on -line at League of MN Cities This insurance proposal is a descriptive summary of the Insurance policies to be placed on your behalf based on risk Information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the Insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your Insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 14 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Group Self- Insured Accident Plan for Volunteers Carrier League of Minnesota Cities Insurance Trust Limits of Liability $ 100,000 100,000 400 1,000,000 500,000 Coverage A: Accidental Death Benefit Coverage B: Permanent Impairment Benefit Coverage C: Weekly Disability Benefit, Waiting Period: 3 Calendar Days, Maximum Period: 26 Weeks Coverage D: Medical Benefit Maximum Amount Total Limit of Liability Per Accident This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the Insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 16 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Workers' Compensation Carrier League of Minnesota Cities Insurance Trust Limits Part One: Workers' Compensation • Statutory Benefits for States Listed Below Part Two: Employer's Liability • Applies in States Listed for Part One $ 100,000 Each Accident 500,000 Disease - Policy Limit 100,000 Disease - Each Employee Part Three: Other States Deductible $ 10,000 Per Occurrence (Other Deductible Options Available) Elected Officials Covered Economic Development Authority This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not Intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the Insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 17 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm City of Cottage Grove Coverages Open Meeting law Claims -Made Carrier League of Minnesota Cities Insurance Trust Coverage Reimbursement to a City Official for 100% of the Defense Costs Incurred by the City Official in Defending an Open Meeting Lawsuit Reimbursement Limits 50,000 Defense Costs Per Lawsuit, Per Official - Maximum ,g 50,000 Agreement Term Aggregate Per Official - Maximum 3/9/94 Retroactive Date This insurance proposal is a descriptive summary of the insurance policies to be placed on your behalf based on risk information provided by you. It should be used for reference purposes only. This proposal is not intended to represent, supersede, amend or alter the terms, conditions, exclusions or other provisions of the insurance contract between you and the insurance carrier. Only your insurance carrier may modify the terms of your insurance policy. You are obliged to read your insurance policy and advise your Wells Fargo Insurance Services' representative of any questions you have on the policy's terms and conditions. 19 Wells Fargo Insurance Services Confidential. © 2012 Wells Fargo Insurance Services. All rights reserved. 5/21/2012 mw \Proposal \City of Cottage Grove 2012- 2013.docm