R2011-151 AUTHORIZING BINDER COVERAGE WITH ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC.

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The quotations received for liability and property insurance include the same limits of insurance and SIR as the City's current program. The options for workers compensation all included changing the City's self insured retention. The options were for a $750,000 SIR, $600,000 SIR, $400,000 SIR and remaining at the current SIR of $200,000. Even though each higher limit of SIR provides a lower premium, the premium savings does not offset the higher risk the City would be taking on workers compensation claims. The past six (6) years of workers compensation history shows that an average of just over $300,000 has been paid out each year above the City's $200,000 SIR. The premium savings that would be from selecting higher self insured retentions do not offset the average annual payout above the current SIR and in fact are just over 'h of the annual average payout. The recommended companies offer the best combination of insurance with the self insured retentions remaining the same. Included in the marketing by A. J. Gallagher was the selection of an independent professional claims administrator, loss prevention services and loss reporting services from a qualified public entity third party claims and loss control administrator. Gallagher Bassett was chosen for its many years of experience with public entities and prior experience with the City. POTENTIAL OBJECTIONS: None known. INPUT FROM OTHER SOURCES: None. STAFF REFERENCE: For questions or comments regarding this item, contact Risk Manager Scott Clark at 424-2803 or Finance Director Ron Neufeld at 424-2702. Both will be present at the City Council Meeting of September 19, 2011 to address any Council concerns. BUDGET/TIME IMPLICATIONS: Excess insurance and professional services are budgeted in the Self-insurance fund for this purchase.