City of Oak Creek

Common Council Report

Meeting Date: 12/19/06

Item No.:        

Recommendation: That the Common Council award the City's insurance renewals for 1/1/2007- 1/1/2008 to the following:

For:      Employment Practices Liability

To:      LEXINGTON INSURANCE (THROUGH CVMIC)

For: Property:  Buildings, Contents & Property in the Open, Contractors Equipment, Monies/Securities, and Special Use Animal Coverage

To:      LOCAL GOVERNMENT PROPERTY INSURANCE FUND (LGPIF)

For: Boiler & Machinery

To:      TRAVELERS (THROUGH CVMIC)

For:      Blanket Bond:  Employee Dishonesty, Forgery & Alteration, and Computer Theft

To:      OHIO CASUALTY GROUP  (THROUGH CHRIS SCHROEDER AGENCY)

For:      Automobile Physical Damage

To:      LEXINGTON INSURANCE COMPANY (THROUGH CVMIC)

For:      Workers' Compensation

To:      CVMIC

Background:  Renewal of coverage for the major insurance categories of Automobile Liability, General Liability, Law Enforcement Liability, and Public Officials Liability were processed as part of a three-year renewal, for 2006-2008, under CVMIC ,and were authorized by the Council on 08/16/05.  Premium costs for the major coverage elements have been stable during the renewal term (2006-2008). 

Action on this agenda item will approve additional insurance coverages that are not part of the 3-year liability package.  Coverages being renewed will still be provided by or through CVMIC, except for the Property damage insurance element.

The Local Government Property Insurance Fund appears to be the best value available for property-related coverages, and is again being recommended for renewal.  We recommend renewing with the same deductibles of $15,000 for the Property Insurance coverage, with a two-limit aggregate applicable.  Deductibles for the Contractors’ Equipment and Monies & Securities coverage would remain at $500. 

For Auto-Physical Damage coverage, expected to be carried with Lexington Insurance Company through CVMIC, we would continue our deductible for incidents under this coverage to $5,000 per event. 

The Boiler & Machinery coverage is expected to again be secured through Travelers Insurance through CVMIC at an increase of approximately 5%.

The Blanket Bond- Employee Dishonesty coverage renewal is a formality to confirm coverage that was also bound for a three-year period with stable premiums.

Workers Compensation coverage is dictated by the State of Wisconsin and rates are determined by the workforce makeup.  Our experience modification factor means that we will be paying in the higher range of premiums.   CVMIC would remain the carrier.

Complete descriptive record pages for each type of insurance are available in the Clerk’s office.

Fiscal Impact: 

(Note:  where exact premium figures are not yet available, we have provided the best-guess estimates)

                                                                                                                           PROPOSED

2006 FOR 2007

Excess Liability (Umbrella)                                          $6,562                                     $6,897

Employment Practices Liability                                   10,784                                     11,323

Property:

LGPIF Buildings, Contents & Property

            in the Open                                                      32,429                                     30,346

            Contractors Equipment                                     4,745                                       4,958

            Special Use-Animal Coverage                              135                                          135

            Money & Securities                                               597                                          597

Boiler & Machinery:                                                        3,123                                       3,410

Crime:

            Employee Dishonesty, Forgery &

            Alteration, Computer Theft                                 3,600                                       3,600

Auto Physical Damage:                                               17,101 19,869

Subtotal:                                                         79,076                                     81,135

Workers’ Compensation:                                           437,447 461,885

TOTAL                                                         $516,523                                 $543,020

The difference from 2006 to 2007 is an increase of approximately 5.1%, primarily due to increased workers compensation premiums, which are based on higher payroll costs and the experience ratio calculated by the State of Wisconsin

Previously approved costs for liability coverages for 2007 through CVMIC are $118,163.  Sufficient funding for all insurance coverages has been provided in the 2007 budget.  The Water & Sewer Utility will pay their share, approximately $98,000.

Prepared by and fiscal review by: Beverly A. Buretta, CMC City Clerk/Comptroller

Respectfully submitted, Patrick DeGrave City Administrator