FY 2014 Workers' Compensation Excess Insurance RenewalTHE CITY OF
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Masterpiece on the Mississippi
Dubuque
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All- America City
II 111!
2012
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Fiscal Year 2014 Workers Compensation Excess Insurance Renewal
DATE: July 5, 2013
Personnel Manager Randy Peck recommends City Council approval of the Fiscal Year
2014 Workers Compensation Excess insurance renewal rate of .2277 per $100 of
payroll submitted by Safety National, maintaining the retention limit of $500,000 (each
accident) and including sworn police officer and firefighter medical claims under a
$600,000 retention limit effective July 1, 2013 through June 30, 2014, for a total annual
premium of $91,123, which is a $21,618 increase. The increase is related to the
increase in City payroll and the increase in the rate per $100 of payroll.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
kr,„709,,,
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Randy Peck, Personnel Manager
Masterpiece on the Mississippi
Dubuque
* * * **
AG- America City
' 1 1 1'
2012
TO: Michael C. Van Milligen, City Manager
FROM: Randy Peck, Personnel Manager
SUBJECT: Fiscal Year 2014 Workers Compensation Excess Insurance Renewal
DATE: June 27, 2013
Cottingham and Butler has presented the Workers' Compensation excess insurance
renewal options for coverage effective July 1, 2013. Quotes were requested from
Safety National our current carrier, Midwest Employers, Midlands, EMC, Travelers and
Star. Only Safety National and Midwest Employers responded to the request. The
following is a summary of their quotes:
• Safety National - $91,123 (annual premium)
• Midwest Employers - $142,543 (annual premium)
Safety National increased their rate per $100 of payroll from $.179 to $.2277. The
current annual premium is $69,505. The increase in the annual premium is related to
the increase in our payroll and the increase in the rate per $100 of payroll. Finance
Director Ken TeKippe and I recommend that we continue with Safety National as our
excess Workers' Compensation carrier effective July 1, 2013 through June 30, 2014.
We also recommend maintaining the retention limit of $500,000 (each accident) and
including sworn police officer and firefighter medical claims under a $600,000 retention
limit.
The requested action is for the City Council to pass a motion approving the renewal rate
of .2277 per $100 of payroll submitted by Safety National, maintaining the retention limit
of $500,000 (each accident) and including sworn police officer and firefighter medical
claims under a $600,000 retention limit effective July 1, 2013 through June 30, 2014, for
a total annual premium of $91,123. Cottingham and Butler has issued a binder to make
sure there will be no lapse in coverage on July 1, 2013.
RP:Imh
cc: Ken TeKippe, Finance Director
Coverage Specifications Excess Workers' Compensation
1 Proposal of Insurance
2012/2013 2013/2014
Company:
A.M. Best Rating:
Status:
Rating and Status as of:
Limits:
Workers' Compensation (each accident)
Employer's Liability (each accident)
Self Insured Retention (each accident):
All Other
Police /Fire
Aggregate Protection
Estimated Payroll
Rate per $100 of Payroll
Safety National
A, XI
Admitted
March 5, 2013
Safety National
A, XI
Admitted
March 5, 2013
Statutory Statutory
$1,000,000 $1,000,000
$500,000 $500,000
$600,000 $600,000
None None
$38,829,530 $40,018,990
0.179 0.2277
Policy Subject to Annual Audit: Yes or No Yes Yes
Minimum Annual Premium $69,505 $91,123
TOTAL ESTIMATED ANNUAL PREMIUM $69,505 $91,123
EXCLUSIONS INCLUDE BUT ARE NOT LIMITED TO:
♦ Punitive Damages
♦ Injury to employees knowingly illegally employed
♦
Intentional Injury
♦ Serious and willful misconduct of the employer including intentional acts or omissions resulting in an injury
♦ Injuries outside of U.S., its territories and possessions, and Canada
♦ Employment Related Practices
♦ Crew Members of any vessel
♦ Fines or Penalties
♦ Damages to any employee under the USL &H Act, the Federal Employer's Liability Act, or Migrant and Seasonal
Agricultural Worker Protection Act.
♦ Monopolistic States are not covered: North Dakota, Ohio, Washington, West Virginia, and Wyoming
♦ Failure to comply with any health, safety, or notification law or regulation
♦ Firefighter and Policy Officer Employees (see option for Medical Benefits Only)
♦ Relating to any employer owned, leased, or regularly chartered aircraft
ADDITIONAL OPTIONS:
® Voluntary Compensation
® Foreign Voluntary Compensation and Employer's Liability Coverage
Cottingham & Butler Risk Management 1 9
Marketing Summary
The following markets were approached on your behalf:
Proposal of Insurance
• Safety National- Provided renewal terms at the expiring retention levels including Police /Fire. Given the
hardening marketplace conditions in the Worker's Compensation coverage Safety National offered
terms at a rate increase.
• Midwest Employers- Indicated that while they are interested in the account from an Excess Work Comp
standpoint they would still be close or above where they quoted last year which was at $140K in
premium. Given the pricing indication we told them to close their file.
• Midlands - Indicated they would be excess of $250k in premium if they would provide terms at renewal. Given the
pricing indication we told them to dose their file.
• EMC - Declined to provide terms since they could not get close to the renewal pricing offered by Safety
National.
• Travelers - Declined since they would not entertain this coverage on a monoline basis. The underwriter
needed to have all lines of coverage in order to proceed.
• Star - Declined to quote since they cannot entertain the police / fire exposure.
Cottingham & Butler Risk Management 1 7