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LETTER to the DECATUR CITY COUNCIL <br /> Finance Department <br /> DATE: September 15, 2021 <br /> TO: Honorable Mayor Moore Wolfe <br /> City Council <br /> FROM: Scot Wrighton, City Manager <br /> Gregg D. Zientara, City Treasurer& Director of Finance <br /> SUBJECT: Risk Management Insurance <br /> Continued social unrest throughout the country, increased occurrence of law enforcement excessive force <br /> events, as well as the weather-related events from windstorms and fire hazards, continue to drive a <br /> significant shift in the risk management insurance profiles and risk coverage assessments in the <br /> insurance industry. <br /> Although, it is of continued belief that this is a shorter-term marketplace situation, insurance carriers have <br /> increased coverage pricing or have limited risk exposure in their coverage offerings, passing more risk <br /> exposure to insured clients. <br /> These dynamics are now impacting the city as we set to renew insurance coverage effective October 1, <br /> 2021. <br /> Property coverage, crisis protection, boiler, crime, and workers compensation renewals are extensions of <br /> existing coverage limits with premium pricing at 2-3% inflation level increases, or higher in the case of <br /> excess property and crisis protection. The later price renewals driven by the current marketplace <br /> environment. <br /> Liability coverage across the board, i.e., general, employment, law enforcement, automobile, cyber; is the <br /> challenge where proposals have included a reduction in coverage limit combined with premium rate <br /> increase. To maintain current coverage policy limits has required the city to entertain additional sources of <br /> coverage, albeit at increased premium cost. <br /> Following much discussion with city insurance advisors, Arthur J. Gallagher over the last 6 months, we <br /> have concluded that given the current environment of risk, we do not believe coverage limit reductions to <br /> save policy premium costs are a wise choice at this time. We believe it wiser to maintain coverage limits <br /> and incur the higher policy premium costs in the short term, as we believe that coverage limit reduction at <br /> this time given the marketplace may place us in an unfavorable future position when we would seek <br /> higher coverage limits. <br /> Upon council approval, city risk management will bind coverage as recommended in this material. City <br /> has yet to finalize the excess liability coverage limits and premium costs with the carriers. The material <br /> presented to council will upon resolution passage provide risk management with a maximum level or not <br /> to exceed level of coverage at this time. City will then proceed to finalize the excess liability insurance <br /> balancing coverage limits with premium price. <br /> Attached is the risk management insurance renewal proposal for the city for the coverage period effective <br /> October 1, 2021. <br /> Gregg D. Zientara <br /> City Treasurer& Director of Finance <br />