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Village of Mount Prospect
Mount Prospect, Illinois
INTEROFFICE MEMORANDUM
TO: DAVID STRAHL, ACTING VILLAGE MANAGER
VS
FROM: FINANCE DIRECTOR
12-
DATE: DECEMBER 5, 2014
SUBJECT: 2015 PROPERTY AND WORKERS COMPENSATION INSURANCE PROGRAM
PURPOSE:
To present a recommendation for the property and workers compensation insurance program for the
policy year beginning January 1, 2015 and ending December 31, 2015.
DISCUSSION:
The Village's current property and workers compensation insurance policies are set to expire on
December 31, 2014. With the assistance of the Village's insurance consultant, staff sought quotes with
the existing broker and insurance companies to secure coverage for 2015. There remains just a single
competitive insurer for the excess workers compensation - Safety National while Federal Insurance
(Chubb) has been the most competitive on cost and coverage for property. The following is a brief
summary of our expiring insurance program, an analysis of the proposal received, and a summary of
the insurance package being recommended by staff and its consultant.
Expiring Program
Attachment I provides a listing of the current schedule of insurance in force, showing the type of
coverage, the carrier, policy limits, and the broker of record.
Village buildings and vehicles were insured this past year by Federal Insurance (Chubb) Company.
Property values on which the premium was based totaled $95,296,056. A $25,000 deductible is in
place for this coverage. The annual premium was $101,750. The broker offering the coverage was
Arthur J. Gallagher and Co.
Excess workers compensation coverage was purchased from Safety National, which insured the Village
for individual claims in excess of $600,000. There is a $1 million aggregate limit for worker
compensation claims. The annual premium was $81,465. The broker again was Arthur J. Gallagher
and Co.
Proposal Received
Nugent Consulting Group assisted the Village in securing proposals from our current broker and
underwriters. Attachment II presents a summary of the 2015 insurance renewal for the upcoming policy
period. A breakdown of premium by coverage type for policy year 2013 and 2014 is also included.
The renewal quote for property coverage increased $2,865, or 2.8% from the prior year and totals
$104,615. Insurable values during the same period increased 2.9%. The renewal quote for excess
workers compensation coverage increased $6,043 or 7.4% from the prior year and totals $87,508. The
self-insured retention level did not change from the prior year and remains at $600,000. The total for all
premiums and commissions for selected coverage levels is $204,505, an increase of 4.55% from the
2014 premium.
Property and Workers' Compensation Insurance Program
December 5, 2014
Page 2
The insurance companies being recommended are very sound financially and have an excellent claims
payment history. Federal Insurance is rated A++, XV (Superior) by A.M. Best, a recognized insurance
company rating service. Safety National Casualty Corp. is rated A, IX (Excellent).
RECOMMENDATION:
It is recommended the Village purchase property and excess workers compensation insurance from
Arthur J. Gallagher and Co. with premiums and broker's fees not to exceed $204,505.
David O. Erb
Finance Director
DOE/
Attachments
I:\Insurance\Renewals\2015\2015 Renewal - Property and WC.docx
Attachment I
VILLAGE OF MOUNT PROSPECT
SCHEDULE OF INSURANCE IN FORCE
December 31, 2014
Type of Coverage
Carrier
Deductible/
Self -Insured
Retention
Specific
Excess
Limit
Aggregate
Excess
Limit
Expiration
Date
Policy
Number
Broker
Premium
Property & Inland Marine
Federal Insurance / Chubb
$25,000
$95,296,056
none
01/01/15
35826710
Arthur J. Gallagher
$101,750
Workers' Compensation
Safety National Insurance Co.
$600,000
Statutory
$1,000,000
01/01/15
SP 4047829
Arthur J Gallagher
$81,465
Self -Insured Liability Program
General Liability
N/A
$2,000,000
$0
$0
$0
Auto Liability
N/A
$2,000,000
$0
$0
$0
Employment Practices Liability
N/A
$2,000,000
$0
$0
$0
Police Professional Liability
N/A
$2,000,000
$0
$0
$0
Public Officials Liability
N/A
$2,000,000
$0
$0
$0
(Errors and Omissions)
Excess Liability
High-level Excess Liability Pool
$2,000,000
$13,000,000
$13,000,000
04/30/18
n/a
n/a
$82,282
Fiduciary Liability - Police Pension
Federal Insurance / Chubb
$25,000
$5,000,000
$5,000,000
08/01/15
8158-5499
Arthur J. Gallagher
$11,960
Fiduciary Liability - Fire Pension
Federal Insurance / Chubb
$25,000
$5,000,000
$5,000,000
08/01/15
8169-8992
Arthur J. Gallagher
$13,100
Public Employee Dishonesty
Travelers
$5,000
$500,000
none
05/01/15
105779765
Arthur J. Gallagher
$2,678
Depositors Forgery
Travelers
$1,000
$100,000
none
05/01/15
105779765
Arthur J Gallagher
Incl. in above
Public Officials Bond - President
Liberty Mutual
$0
$100,000
$100,000
05/01/15
404009933
Arthur J. Gallagher
$100
Public Officials Bond - Manager
Liberty Mutual
$0
$100,000
$100,000
05/01/15
404009934
Arthur J Gallagher
$100
Public Officials Bond - Treasurer
Liberty Mutual
$0
$250,000
$250,000
05/01/15
404009932
Arthur J. Gallagher
$250
Contingent Tax Interruption
Federal Insurance / Chubb
$25,000
$9,000,000
$9,000,000
01/01/15
35826710
Arthur J. Gallagher
Incl. in Prop
Employee & Retiree Health Ins.
Intergovernmental Personal
$30,000/
Benefit Cooperative
$75,000
none
none
06/30/15
n/a
n/a
Varied
Third Party Administrators
Workers' Comp Claims Administration
ASC
Liability Claims Administration
Gallagher Bassett
I:\Insurance\Schedule of Coverage0ecember 31, 2014 xlsx
Attachment II
VILLAGE OF MOUNT PROSPECT
2015 INSURANCE RENEWAL
Percent Increase of Renewal 4.55%
Property Values
$ 92,717,046 $
Expiring
Renewal
Coverage Type / Values
2013
2014
2015
Property & Inland Marine
$ 99,466
$ 101,750
$ 104,615
Excess Workers Compensation
65,720
81,465
87,508
Gallagher Fee
12,382
12,382
12,382
Total
$ 177,568
$ 195,597
$ 204,505
Percent Increase of Renewal 4.55%
Property Values
$ 92,717,046 $
95,296,056
$ 98,062,237
Property Deductible
25,000
25,000
25,000
Auto Physical Damage Deductible
100,000
100,000
100,000
WC Self-insured Retention - General Employees
600,000
600,000
600,000
WC Self-insured Retention - Police/Fire
600,000
600,000
600,000