RES 77185 - Laserfiche WebLink

A better approach to consider would be a Self-Insured Retention Program. With a Self-Insured Retention Program, a Municipality w{ll agree to self-insure each loss under a particular level. Above that level, the Municipality would purchase insurance to take care of all losses up to a determined amount. On your behalf, we obtained a quotation for a $S0,000.00 Self- nsured Retention rogram, the City would pay all Liability losses up 600 the insurance carrier would pay all Liability losses in excess of $50,000.00 to a limit of $5,000,000.00 per occurrence. The annual cost for this pro- gram would be $169,000.00. The advantages of a program such as this only appear on the surface. The disadvantages are greater than the advantages. 1, This program does not contain any Property, Boiler or Crime insurance. Being removed from the present Special Multi- Peril Package Program, the coverage would have to be bought in the undiscounted open market at an annual cost of approxi- mately $30,000.00. Thus your total insurance outlay would increase to $200,000.00. 2. Just as with a total self-insured program, certain procedures have to be set up and maintained. These are mandated by State Law. A loss adjusting firm would be retained on a monthly retainer basis and unusually large claims would require addi- tional expense. 3. A loss prevention department must be set up. With a Self- Insured Retention Program, this need not be a full-time depart- ment. However, existing personnel must be assigned these functions and must carry out the duties of loss prevention. This is an added expense of doing business. 4. Self-Insured Retention Programs are only being written at this time through non-admitted insurance carriers. These are companies that are licensed to do business in California only through sur- plus lines insurance brokers. Thus, we can never guarantee the h financial stability of any suc company or the likelihood that they will remain on a particular risk. .5. Our current basic Special Multi-Peril insurance carrier is the Continental Insurance Company. This is one of the finest stock companies currently writing business in the insurance industry. It has been extremely beneficial to the City of Pleasanton that Continental Insurance Company has continually agreed to renew coverage. Major stock companies are generally not interested in providing Municipal insurance. If we were to retire Continental Insurance Company from your program at this time, it is unlikely that we could reinterest them at a later time in returning, should you become disenchanted with the Self-Insured Retention Program. (4)