MEMORANDUM
To: R. David Laurrell, County Administrator
R. David Laurrell 6/19 BOS
From: Carolyn Roakes, Purchasing AgentThrough: Alan Lane, Director of Management Services ACL
Subj. AGENDA ITEM – VML/VACo Insurance Proposals (10 minutes) Date: May 8, 2006
________________________________________________________________________
BACKGROUND:
Proposals for the County’s liability, property, and Workers Comp insurance were requested from VACo (Virginia Association of Counties Group Self-Insurance) and VMLP (Virginia Municipal Liability Pool). The County has had its insurance coverage with VACo for the past three years. Prior to this the County had its insurance coverage with VML. The current policy with VACO will expire June 30, 2006.
Both VML and VACO are associations established in accordance with 15.2-2703 of the Code of Virginia whereby political subdivisions form a group self-insurance pool to provide insurance coverage for pool members. These groups are determined to be “intergovernmental;”
contractors; therefore, it is not necessary for local governments to solicit bids for insurance if it decides to participate in the pools.
DISCUSSION:
The attached spreadsheets show the FY07 rates offered by VML and VACo for General
Liability, Property, and Workers Comp coverages. The quotes submitted were based on identical amounts provided both VACo and VML for FY06 payrolls, schedules, and inventory of property and vehicles. Actual premiums for FY07 may vary, depending on additions or deletions to our property inventory.
General Liability & Property
Overall, total cost difference is in VML’s favor on an annualized basis of $6,213. Additionally, when the County was insured with VML three years ago and earlier we received dividend refunds that averaged $20,000/yr. The County has not received any dividend refunds the last three years since we switched to VACo. VML will also include the County’s Public Officials Liability insurance in a $1,000,000 excess liability premium. Our Public Officials liability
Memo to Mr. Laurrell Page 2
May 8, 2006
coverage is currently with Virginia’s Division of Risk Management group self insurance plan (VaRisk2) with a yearly premium of $4,090.00; has a $3,500 deductible, and a $1,000,000 limit. By including this coverage in VML’s program with a lower premium for this specific coverage, we will eliminate the premium cost of VaRisk2 and increase our coverage limit by one million dollars for this potential risk. Increasing our property deductible to $2,000 will also result in a lower premium for property insurance coverage that staff feels is a reasonable cost/benefit change. Historically property claims have been negligible.
Workers Comp:
There are very small differences in the rates quoted for Workers Comp insurance. Presently, Social Services has Workers Comp coverage under VML and the County has VACo.
Combining both under one policy will result in reducing administrative time and cost.
All coverage levels, policy terms and conditions, and services offered are equal to or better than the County’s current insurance program. VML does offer more comprehensive loss control services such as consultations, workshops and seminars, and safety procedures programs. The two insurance proposals have been reviewed by the Administration/Management Services Committee.
RECOMMENDATION:
The Administration/Management Services Committee and staff recommend the Board accept VML’s proposal for Property, Liability, and Workers Compensation Insurance as Staff believes the VML proposal provides the best cost/benefit to the County. Additionally, Staff requests that the Board adopt the required resolution to execute the Application for Membership and Member Agreement in order for the County to become a member in the Virginia Municipal Liability Pool. The resolution required for VML membership is attached separately.
Attachment:
General Liability & Property Spreadsheet Workers Comp Spreadsheet
RATE PROPOSAL COMPARISON
GENERAL LIABILITY &PROPERTY INSURANCE COVERAGES FY06 – FY07
COVERAGES 7/1/-06 – 6/30/07 VACO COST – FY05/06 VACO VML MISC. GENERAL LIABILITY $2, 000,000 Limit $19,890 $13,770 $1 Million Limit - $3,648 + Excess $1 Million Limit (On all coverages) $4,979 = $8,627 VML membership fee - $100 $1,000 Deductible $18,505 $1,000 Deductible $19,770 PROPERTY
Buildings, Contents & Inland Marine
$16,949
w/$2,500 Deductible $16,968
w/$2,000 Deductible $16,456
Boiler & Machinery $2,341 $2,341 $2,751
CRIME BONDS $250 Deductible $760 $760 ($1,250 deductible) $550 AUTO (154 vehicles) $2, 000,000 Limit
(With Comprehensive Coverage. No Collision Coverage) ($350 per vehicle) $53,170 ($331 per vehicle) $50,971 ($326 per vehicle) $50,213
Medical Payments – Auto & Gen. Liability:
VACO - $5,000 VML - $10,000
TOTAL $93,110 $84,810 $78,597
For an additional premium of $3,200, VML offers Public Officials Liability coverage with a $2 million limit. This insurance is currently purchased from the state-sponsored plan, VaRisk2, for $4,090 annually with a $1 million dollar limit. VML’s total cost, including Public Officials Liability, will be $81,797. Savings versus VACo and VaRisk 2 is $7,103 annually.
WORKERS COMP RATE COMPARISON
(PAYROLLS AND PREMIUMS QUOTED ARE BASED ON ESTIMATED RATES FOR FY0-FY07. ACTUAL PREMIUMS QUOTED MAY BE MORE OR LESS AFTER STATE RATE APPROVAL)
CLASSIFICATION CODE ESTIMATED
FY06/07 PAYROLL VACO PROPOSED PREMIUM (Experience Modification - .85) VML PROPOSED PREMIUM (Experience Modification - .87)
COUNTY EMPLOYEES RATE PREMIUM RATE PREMIUM
Excavation & Drivers 6217 $ 202,719 4.98 $10,095 4.93 $9,994
Drivers, Chauffeurs NOC 7380 7,829 4.32 338 4.27 334
Police Officers & Drivers 7720 2,092,895 1.98 41,439 1.95 40,811
Clerical 8810 3,994,888 .16 6,392 .16 6,392
Attorney-All Employees 8820 452,570 .13 588 .13 588
Animal Control 8831 80,038 1.21 968 1.20 960
Building Operated by Owner 9015 384,080 2.38 9,141 2.36 9,064
Parks NOC – All 9102 388,146 2.68 10,402 2.66 10,325
Municipal Employees NOC 9410 595,446 2.18 12,981 2.15 12,802
Municipal Social Workers 9411 57,676 .62 358 .60 346
TOTAL ESTIMATED ANNUAL PREMIUM
(Less $10,559 discount)
$68,238
(Less $11,478 discount)
$68,228
SOCIAL SERVICES EMPLOYEES (VACO - Social Services quote only applies if included within County program)
Clerical 8810 $1,469,569 .16 $2,351
Municipal Social Workers 9411 867,085 .62 5,376
TOTAL ESTIMATED ANNUAL PREMIUM – Social Services
(Less $880 discount)
$5,688 TOTAL – COUNTY & SOCIAL
VML VACO
COVERAGES FY99 FY00 FY-01 FY02 FY03 * FY04 FY05 FY06
GENERAL LIABILITY $10,590 $9,214 $9,143 $9,172 $10,293 $14,612 $15,865 $16,338
PROPERTY $20,904 $16,798 $15,778 $16,203 $17,859 $16,771 $18,150 $19,565
$40,576 $40,280 $42,611 $41,072 $45,541 $43,800 $48,906 $53,944
AUTO
COST PER VEH. Unknown
145 veh. $278 ea. 144 veh. $296 ea. 141 veh. $291 152 veh. $299 146 veh. $300 156 veh. $314 154 veh $350
BOILER & MACHINERY $3,023 $3,023 $3,627 $3,656 $4,022 $2,227 $2,268 $2,341
CRIME BONDS $1,621 $1,621 $1,621 $1,621 $1,831 $700 $750 $760 TOTAL $76,714 $70,936 $72,780 $71,724 $79,546 $78,110 (W/C Credit of $3,639) $74,471 $85,939 $92,948 - 8% 2.6% - 1.5% 11% 15.4% 8.2%
AVERAGE YRLY INCREASE/VML – 1.03% AVERAGE YRLY INCREASE/VACO – 11.9%
DIVIDEND $9,088 $5,603 $6,812 $4,475 $5,492
NET TOTAL $67,626 $65,333 $65,968 $67,249 $74,054
PUBLIC OFFICIALS LIABILITY – VARISK2
$44,090 $4,090 $4,090 $4,090 $4,090 $4,090 $4,090
CO. ADMIN BOND CAMPBELL INS
$100 $100 $100 $100 Combined with
other bonds
