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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, Chief Financial Officer |
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PRESENTER(S): |
David Pitcher, Claims and Insurance Manager |
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|
Troy Bingham, Comptroller |
TITLE:
title
Ratification of 2018-2023 Insurance Premium and Presentation of 2023-2024 Annual Insurance Renewal Report
end
AGENDA ITEM TYPE:
Other Approval
RECOMMENDATION:
Approve request to ratify 2018-2023 insurance premium total of $16,143,020.00 and receive the Annual Risk Management Report required in Board Policy 2.1.
BACKGROUND:
This agenda item is being presented in compliance with Board Policy 2.1 Financial Management which requires and annual report be provided to the Board. The policy requirements include:
- The Authority will maintain Public Officials Errors and Omissions Insurance in an amount determined to adequately protect the Authority.
- The Executive Director will, as necessary, procure other insurance to compensate for losses that would adversely affect the Authority.
As part of this presentation the Board is being asked to ratify premium expenditures for 2019 through 2023 (see discussion below).
DISCUSSION:
Insurance Market - 2023-2024 increases in most markets; largest increase was in property due to addition of Depot District.
Public Officials Errors and Omissions
5.3% decrease
Other Insurance
- Property 32.8% increase (addition of Depot District)
- Rail Liability 3.79% increase
- Railroad Protective No increase
- Rideshare VanPool Liability 2.44% increase
- Police Professional Liability 6.12% increase
- Blanket Excess Liability 11.38% increase
- Premises Liability 5% increase
- Excess Work Comp Liability 6.35% increase
- Cyber Security Liability 6% decrease
- Fiduciary Liability No increase
- Terrorism - liability only 10.5% increase
- Crime 3.4% increase
In December 2018 the Board was asked to approve a five-year contract (three-year contract with two one-year options to extend) for insurance broker services. At that time the board was also presented with projected five years of insurance premiums in the amount of $8,750,000.
This projection was inaccurate due to: unanticipated hardening of insurance markets; not including in this amount, premiums for the rideshare and railroad protective liability insurance program; and the procurement of additional coverages for Crime and standalone Terrorism Liability.
Though inaccurately forecast, the Board has been informed of the insurance renewals annually and those increases have been within the budgeted amounts every year.
Using 10 years of historical premium data, a more accurate forecast of future premiums will be presented with the new Insurance Broker Services contract and working with accounting there will be procedures in place to keep the Board informed of any unexpected changes affecting the forecast. This presentation will continue to be given annually and will include benchmarking to keep the Board informed as to how actual premiums compare to those anticipated in the forecast.
ALTERNATIVES:
The Board may provide input and direction for consideration in future insurance renewals.
FISCAL IMPACT:
An overall 10.6% increase in premiums for 2023-2024.
ATTACHMENTS:
None