Title
Excess Workers Compensation Insurance Program Renewal (B)
Explanation
The City of Gainesville markets its insurance program on an annual basis through its broker, Arthur J. Gallagher & Co. The most recent renewal of the program produced a $673,302 net decrease in premiums across all lines of coverage compared to current year costs. This translates to an overall premium reduction of 20%, as indicated in Exhibit A, Insurance Program Summary.
During this most recent renewal process, the City Commission directed staff to allow Public Risk Insurance Agency (PRIA) to submit a proposal for excess workers compensation insurance coverage, in addition to those programs marketed through Arthur J. Gallagher & Co. Currently the City utilizes a modified self-insurance program to protect itself against claims arising under the Florida Workers Compensation Statute. This program includes both a self-insured and insured layer. Under this program, the City purchases excess workers compensation insurance that pays claims that exceed the self-insured retention (SIR). During the policy year ended September 30, 2005, the SIRs were $500,000 for police, fire and utility employees, and $400,000 for all other employees.
As a result of this approach, the City received a quote, through Arthur J. Gallagher, from the Preferred Governmental Insurance Trust (PGIT), a product marketed by PRIA, in addition to quotes from two insurance carriers. These quotes are summarized in Exhibit B, Excess Workers Compensation Fiscal Year 2006 Renewal Options and Quotes. The lowest quoted premium, before considering SIRs, was a no aggregate product from Safety National. While this quote was lower ($725,000 vs $797,320) the lower SIR associated with the PGIT program ($350,000 vs $500,000) on the City's higher exposure employees (police, fire and utilities) results in a lower projected overall cost to the City, in that the premium savings ($72,320) associated with the Safety National bid co...
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