HomeMy WebLinkAbout19 - Excess Workers Compensation Insurance RenewalCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 19
February 26, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Human Resources, Lauren Farley, Risk Manager, (949) 644 -3302,
Ifarleya -city. newport- beach.ca.us
SUBJECT: Excess Workers Compensation (WC) Insurance Renewal
Issue:
Should the City Council authorize the expenditure of $376,123 for the excess workers
compensation insurance renewal?
Recommendation:
Approve the renewal of the excess workers compensation coverage for a twelve month
policy with a self- insured retention (SIR) of $1 million with statutory coverage limits and
premium outlined below.
Background:
The City is self insured for workers compensation and purchases excess workers
compensation insurance as a risk - financing tool to protect against catastrophic loss.
This financial mechanism allows the workers compensation internal service fund to
retain a certain level of risk within its financial capacity. In addition to the City
purchasing excess workers compensation insurance, legislative reforms over the past
ten years have provided assistance to the City in lessening the monetary impact of its
workers compensation claims.
Renewal Quotation:
The City's workers compensation program is viewed by the insurance carriers as an
excellent risk (during this policy period we did not have a single claim that exceeded our
self insured retention limit of $1 million), thereby providing the City with very competitive
renewal quotes. Our expiring coverage is with National Union and their renewal
proposal again offered the greatest protection. Last year our premium was $377,730
and this year's premium is $376,123.
Excess Workers Compensation (WC) Insurance Renewal
February 26, 2008
Page 2
Therefore, staff recommends the renewal policy from National Union as outlined below:
Coverage Limits
Carrier SIR WC & Employers Liability Premium
National Union $1 million Statutory Limits & $1 million $ 376,123
Employers Liability
Funding Availability:
Funds which cover the recommended expenditure are in the Internal Services Budget —
Insurance Reserve Fund 6010 -8638. The renewal premium of $376,123 is slightly less
than last year's of $377, 730 and is 75% of the budgeted amount of $500,000.
Prepare Submitted by:
Lauren Farley, isk Mana er Barbara Ramsey, HR Director