HomeMy WebLinkAboutAGENDA REPORT 1986 0707 CC REG ITEM 12BLiability Insurance
July 2, 1986
Page 2
A)_ -$990,000 excess of a $10,000 self—insured retention at a premium of
50,349.
B) $1,000,000 excess of the above at a premium rate of $17,771.
This coverage provides that City with coverage up to 2 million dollars
at a premium of $68,120. An additional excess of $1,000,000 is expected to
be offered to the City in the beginning of August. It is unknown at this
time what the additional cost of this coverage will be. This excess would
provide the City with coverage up to 3 million dollars.
With the purchase of the above mentioned excess the City will, in all
likelihood, be in the position to purchase additional excess for coverage
of the $3,000,000 to 5,000,000 layer from First State Insurance Company.
This final layer of coverage would provide the City with liability insurance
to the desired 5 million dollar limit. It is unknown at this time what the
cost of this layer will be.
EXPLANATION OF CHANCE IN POLICY FROM "OCCURRENCE BASIS" TO "CLAIMS MADE
BASIS"
The City's prior policy was on an OCCURRENCE BASIS. In essence this
type of coverage provided coverage of a claim, for the life of the claim,
provided there was coverage during the_occurance. __If__the_City_ decided_.to
change _carriers, the.=insurance carrier_providing coverage during- the-prior-
year would still be responsible for the claim.
A CLAIM MADE BASIS provides coverage only for claims noticed or filed
during the period of coverage. Should there be an occurrence but no
claim filed the carrier would not be responsible for coverage of the said
claim if the company was not retained as the carrier for the subsequent
year. Should the City change carriers the next fiscal year and a claim
be filed during this year based on an occurrence of a prior year the
carrier currently retained would not be responsible for the claim. As
may be noted from the above description of the CLAIMS MADE BASIS there
is the possibility of a void of coverage for occurrences that are not
filed as claims. The City will however have a means to eliminate this
void by means of the purchase of tail coverage( purchase of coverage from
past carrier to extend a time certain in past to have claims filed and
covered) or retroactive coverage (purchase of coverage from present
carrier to extend a time certain in past to have claims filed and covered) .