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Presentation of Insurance Options and FY2020 Projections
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Key Issues:
· Each year the City Council considers and approves the City’s property and liability insurance program.
· Overseen by the Law Department since 2012, the City has enjoyed reduced premium and claim expenses and has increased autonomy and flexibility in the claims management process.
· Considering transitioning liability coverage from OneBeacon to States Self-Insurers Risk Retention Group, Inc. to reduce premium costs and give City more autonomy and involvement in claims management
· Based on FY2019 premium quotes, changing from OneBeacon to States insurance could result in a premium savings of at least $100,000 per year.
Background:
Since 2012, the City of Lee’s Summit has used a risk management program for property and liability matters which is overseen by the Law Department. The program uses a broker relationship for the procurement of insurance products for the City, a defined methodology for requesting competitive quotes for insurance needs, and internal insurance claims management processes and procedures. In addition, the City has a self-insured retention program in lieu of a traditional deductible insurance program. This has resulted in both significant cost savings to the City as well as increased internal control of the City’s risk and loss program, enabling broad internal handling and management of claims and claims processes, resulting in additional cost savings. Currently, the City is under a $100,000.00 per occurrence self-insured retention, with a stop-loss of $500,000.00.
While these measures have helped reduce the quantity of claims the City pays out, the City anticipates increased premiums, because of price hardening in the overall market, and our own adverse experience. We anticipate a 10-20% increase in premiums for FY2020. As such, the City is looking at alternative insurance options for its public entity broad form liability that reduce its costs while stil...
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