|
Only a limited number of cyber carriers have responded to this hard market, and they participate
<br /> with higher rates, higher retentions, and larger coinsurance requirements. Many carriers impose
<br /> sub-limits and coinsurance provisions specific to ransomware claims. We do not have the
<br /> package for cyber liability insurance yet,but it is expected to be slightly higher than the previous
<br /> year. Staff anticipates providing updated information to the Council prior to the September 18
<br /> meeting.
<br /> With the ancillary lines of coverage such as Crime, Excess Crime, Auto Physical Damage,
<br /> Boiler/Machinery and Gallagher Crisis Protect, each of those lines will see competitive renewal
<br /> terms from a pricing and coverage standpoint.
<br /> Three years ago, we moved the Workers Compensation coverage to the Illinois Public Risk Fund
<br /> (IPRF). This move resulted in premium reduction and a lower deductible. Anticipated increased
<br /> payroll cost is driving the premium increase here.
<br /> Following much discussion with city insurance advisors, Arthur J. Gallagher over the last 6
<br /> months, we have concluded that given the current environment of risk, we do not believe
<br /> coverage limit reductions to save policy premium costs are a wise choice at this time. We believe
<br /> it is best to maintain coverage limits and incur the higher policy premium costs in the short term,
<br /> as we believe that coverage limit reduction at this time given the volatile marketplace may place
<br /> us in an unfavorable future position when we would seek higher coverage limits.
<br /> Upon council approval, the City will bind coverage as recommended in this material. City has
<br /> yet to finalize the cyber liability and property liability and excess property coverage limits and
<br /> premium costs with the carriers. The material presented to Council will, if approved, provide
<br /> suitable and appropriate risk management with a maximum level or not to exceed level of
<br /> coverage.
<br /> The City has an insurance broker and advisory arrangement with Arthur J. Gallagher Risk
<br /> Management Services, through their Decatur office. Under this arrangement, Arthur J. Gallagher
<br /> provides broker services including the shopping for insurance offerings and pricing, advisory
<br /> services including evaluation and recommendation of coverage levels and insurance products,
<br /> advisory services in all risk management matters, and loss mitigation services. This specific
<br /> arrangement has been in place since 2014, and further includes a broker / advisor relationship
<br /> with AJ Gallagher and its predecessors approaching 30+years.
<br /> Existing Coverage—The City's expiring insurance program includes:
<br /> Property insurance—coverage limit of$1,000,000 per occurrence with a$250,000 SIR or deductible,
<br /> Excess Property insurance—coverage limit above$1,000,000 to total property of$250 million,
<br /> Auto physical damage insurance—coverage limit of$19.7 million with a$100,000 SIR or deductible.
<br /> Liability insurance—coverage limit of$15,000,000 per occurrence with a$250,000 SIR or deductible,
<br /> Business auto liability—coverage limit$5,000,000 per accident with a$250,000 SIR or deductible,
<br /> Workers Compensation insurance—coverage limit of$3,000,000 with a$300,000 SIR or deductible,
<br /> Equipment breakdown insurance—coverage limit of 100,000,000 with a$5,000 SIR or deductible,
<br /> Crime insurance—coverage limit$2,000,000 per loss with a$5,000 SIR or deductible,
<br /> Cyber liability insurance—coverage limit of$5,000,000 per occurrence with a$50,000 SIR or deductible.
<br /> Crisis protection insurance—coverage limit of$1,000,000 per occurrence with$5,000 SIR or deductible.
<br />
|