6/22/1993 - Laserfiche WebLink

Home Browse Search

0 insurance According to the County's Risk Manager,, adding the School Board busses (for transportation disadvantaged purposes) to the County's coverage involves various costs - There are premium costs , and there are costs/risks associated with deductibles. These costs are associated with general liability and with physical damage. In premium costse adding two busses to the County's policies will raise the County's bill by $3,340 (see attached memo from Both Jordan). Even with the coverage provided by these policies, the County will still be responsible- for a $25,,000 deductible per accident for physical damage and up to the $200,000 per occurrence sovereign immunity limit for liability. Being self-insured, the County has an obligation to minimize risk and exposure. By covering the busses under the County's program, both risk and exposure would be increased. Besides the potential for a costly judgement,, the County would face the probability of frequent claims for minor accidents and injuries. As a result,, the County will incur the costs of paying the claims as well as the cost of processing the claims. Besides coverage under the County's self insurance program, there are two other options for insuring School Board busses. One option works only if the busses to be used have a capacity of sixteen persons or less. In that case, insurance could be purchased by the Council on Aging for only $1,,500. That alternative is not feasible,, however,, because the School Board does not have any busses as small as sixteen passenger size. The other alternative involves the Council On Aging getting insurance through the assigned risk pool. Though more expensive from a premium standpoint than inclusion in the County's self- insurance program ($6,000 for assigned risk pool insurance compared to $3,340 for Premiums associated with the County self-insurance program),, the assigned risk pool option does not involve the exposure that the County would have if the busses were insured under the County's self-insurance program. 0 Payment Whichever option is chosen, the question arises as to who should pay the cost. Last year,, the Council On Aging received $167,,878. from the County. Their budget request for next fiscal year is higher. If the County paid the school bus insurance cost by incorporating the school busses within the County's program at a cost of $3,340, or paying the $6,,000 assigned risk pool premium,, this would effectively increase the County's contribution to the Council On Aging. Because of the potential exposure involved with insuring the busses in the County's self-insurance program,, effective subsidy of that option would far exceed the $3,340 premium cost. In fact, the effective subsidy of the self-insurance option even exceeds the $6,000 cost of the assigned risk pool premium. 0 Conclusion Although a number of benefits would result from the County providing insurance for the COA's use of School Board busses,, the risk to the County is significant. That risk affects the County's self-insurance program. Because the County has opted to be self- insured, the County has assumed an obligation to minimize risk and exposure. 59 9 BOOK JUN 22 1993