HomeMy WebLinkAbout97.Item 4 PPP 04-11-18 Administration Committee - Insurance Renewals t
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EVERY ORGANIZATION HAS RISK
EXAMPLES: WAYS TO HANDLE RISK (= FINANCIAL EXPOSURE):
1 . GETTING SUED 1 . TRANSFER RISK TO AN INSURANCE COMPANY
2. DAMAGE TO PROPERTY 2. TRANSFER RISK TO A CONTRACTOR
3. HARM TO EMPLOYEES 3. RETAIN RISK USING SELF-INSURANCE
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INSURANCE COSTS MONEY: 19%
WE DON 'T BUY IT UNLESS
WE NEED IT
• WE NEED IT WHEN:
1 . MONETARY LOSS WOULD HURT -
2. EXPERT CLAIMS HANDLING WOULD HELP
3. JURY AWARDS ARE UNPREDICTABLE
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"THE IDEA IS TO USE YOUR INSURANCE ONLY TO PAY
FOR SIGNIFICANT CLAIMS AND LOOK AFTER SMALLER
ITEMS YOURSELF." — RBC INSURANCE
SPECIAL FACTORS
• 1 . ONLY CERTAIN INSURERS WILL INSURE _
GOVERNMENTAL AGENCIES
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• 2. WE MAY WANT SPECIFIC LIMITS OR
DEDUCTIBLE, BUT INSURER PRICING MAY --...
DISCOURAGE IT
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COMPARISONS
• LIABILITY INSURANCE
IF OCSD GETS SUED FOR BODILY INJURY, PROPERTY DAMAGE, OR MONETARY HARM
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Limits: OCSD = $40 million -
City of Newport Beach = $50 million --
City of Fountain Valley = $50 million
City of Aliso Viejo = $40 million
City of Garden Grove = $35 million
City of Orange = $30 million _" ..�.
Deductible: OCSD = $500,000 per occurrence �-
City of Garden Grove = $2 million
City of Newport Beach = $500,000
City of Buena Park — 500 000
City of Orange = 350 000
COMPARISONS
• WORKERS COMPENSATION INSURANCE
IF EMPLOYEES GET INJURED ON THE JOB
Limits: Required by law to provide "statutory" coverage
Deductible: I
OCSD = $ 1 million per occ.
City of Garden Grove = $ 1 million per occ. X
Cityof Santa Ana BICEP Pool = $ 1 million per occ.
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City of Huntington Beach (BICEP) _ $ 1 million per occ. •
City of Newport Beach = $500,000 per occ.
City of Anaheim (ACCEL Pool) _ $2 million per occ.
COMPARISONS
• PROPERTY INSURANCE
DAMAGE TO OCSD STRUCTURES AND PERSONAL PROPERTY
BY FIRE, EXPLOSION, FLOOD, ETC. BUT NOT BY EARTHQUAKE
Limits: Higher property value ====> Higher limits ••
OCSD = $ 1 billion limits -
Deductible: OCSD = $250,000 per occurrence
City of Anaheim = $ 100,000
City of Garden Grove = $25,000
City of Tustin = $ 10,000
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A SPECIAL CASE
• EARTHQUAKE INSURANCE
A TYPE OF PROPERTY INSURANCE IN CASE OF EARTHQUAKE Ef
VERY EXPENSIVE, SO WE BUY ON 15 KEY STRUCTURES
Limits: OCSD = $25 million ;
Deductible: OCSD = 5% of loss, subject to $5 million minimum
90% of buyers 5% deductible (Source:
Alliant) _ ,-
Cost: _ $80,000
How Insurance Covers Our Operations
Liability Property Earthquake Workers Boiler Cyber E&O Crime Public ,,watercraft Pollution
Ins Ins Ins Comp Ins &Mach Liability Ins Officials Ins Ins
Ins Liability
Public—bodily X X X
injury claim
Public X x
property
damage claim
Public— Y X X
monetary harm
Employees— >;
bodily injury
Damage to X x
OCSD buildings
Damage to Y X
OCSD personal
property
Damage to X
OCSD
computers
Damage to X
OCSD
machinery
Loss of OCSD X
money or
intangible
assets
Note: This table is a simple chart,which doesn't show all the details of insurance. It does not take into account insurance exclusions, limits,
deductibles,or other details which may affect coverage. Coverage may exist only for certain perils or under certain conditions.
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Administration Committee
April 11th 2018 = �
♦ ` i �
2018-19 Operational
Insurance Renewals
Alliant: The specialty insurance leader
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Excess Liability Program
G L Rate
0.70
0.60
0.50
0.40
0.30
0.20
0.10
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Premium
300,000 -
250,000
200,000
150,000
100,000
50,000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
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Property Program
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Property Rate
0.070
0.060
0.050
0.040
0.030
0.020
0.010
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Premium
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
x .
LIL Excess Workers Compensation
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Workers Compensation Rate
0.50
0.40
0.30
0.20
0.10
0.00
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Premium
300,000
250,000
200,000
150,000
100,000
50,000
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
x .
EarthquakeIL
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Earthquake Rate
0.1150
0.1100
0.1050
0.1000
0.0950
0.0900
0.0850
2016-17 2017-18
Premium
$77,000
$76,500
$76,000
$75,500
$75,000
$74,500
$74,000
$73,500
2016-17 2017-18
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