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NIB INSURANCE COVERAGE FOR FISCAL YEAR 88/89 Acting County Administrator Collins reviewed the following: TO: Board of County Commissioners DATE: October 26, 1988 FILE: SUBJECT: INSURANCE COVERAGE FOR FISCAL YEAR 88/89 FROM: William G. Collins II REFERENCES: Acting County Administrator On October 14th presentations were made by representatives from three insurance companies to the County's Risk Manager, Director of Office of Management & Budget, County Attorney, and myself. I requested each of those present to arrive at an independent recommendation for the County insurance program in the upcoming year. In the attached memos, Risk Manager Susan Tillman recommends going with •the firm of Arthur J. Gallagher & Company, under a limited self insurance program. Budget Director Baird and County Attorney Vitunac recommend staying fully insured with the Florida League of Cities in most instances. ANALYSIS If the County is to go self insured with Gallagher & Company, it will require the payment of a $638,000 premium. The County must further self insure to the amount of $100,000/$200,000 per loss until such time as the County has paid $600,000 in claims. At that point Gallagher & Company would pay any claims in excess of those amounts up to $1,000,000. The advantage to such an approach is that we could earn roughly $24,000 in annual interest •on the premium savings. That is, until claims were paid, money would be in County accounts earning interest However, discussions at the presentations by the Insurance Company indicated that the vast majority of our claims are small in nature. Thus we would probably be paying all claims ourselves and not having the benefit of insurance coverage which didn't kick in until after a Targe deductible was paid. To me this looks like we are paying $638,000 in premiums for the advice that we should set up a separate fund which may not be claimed against, and once that fund grows over the course of several years we will have sufficient funds to be self insured and avoid future premiums altogether. I am of the opinion that we shouldn't go halfway like this. If we are going to be self insured we should save that $638,000 in premium now. However, I do not believe the County is ready to go self insured because it does not have a risk limitation program in place currently. Based on the presentations made by the insurance companies, I was of the opinion that the County would be best served by obtaining from the Schlitt Company the following coverages: property, flood and earthquake, fidelity bond, boiler and machinery and valuable papers; from the Florida League of Cities public officers liability, general liability, errors and omissions, and risk management services, workers' compensation, and equipment/marine coverage. I would recommend that the coverages being obtained from the Florida League of Cities be first dollar coverage to the amount of $1,000,000. CONCLUSION I concur in the recommendations of OMB Director Baird and County Attorney Vitunac that we should stay insured for the coming year and adopt the recommendations set out on Page 2 of Mr. Baird's memo of October 25th. 44 NOV 1`98 BOOK 75 PSGE 44