Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Cynthia Wagner, Assistant City Manager
DATE:	May 12, 2014
RE:	Consent Agenda Item – Renewal of Public Officials Liability and Law Enforcement Liability Insurance Policies – UPDATED May 12, 2014

Background

The City’s Public Officials Liability (including Employment Practices Liability) and Law Enforcement Liability insurance policies expire at midnight May 18, 2014.  The City has been working with the current broker, Hays Companies, of Kansas City and CEK Insurance of Lawrence in order to secure quotes for premiums which would provide the same levels of coverage and deductibles as currently provided. 

The current Public Officials Liability policy provides coverage up to $500,000, with deductibles of $25,000 per occurrence relating to public officials acting in their official duties and $50,000 per occurrence for employment practices.  The current Law Enforcement Liability policy provides coverage up to $1,000,000, with a $75,000 deductible level. 

Quotes were received from our current provider, AIG through the Hays Companies and Scottsdale through CEK.  A summary of current coverage and the quotes is provided below.

	Public Official Liability Coverage	Employment Practices Liability Coverage	Law Enforcement Liability Coverage	Total Cost
Current Coverage	$500,000 coverage/occurrence and aggregate $25,000/$50,000 deductible ELPI included in aggregate and policy total $23,489	Included in Public Official Liability Coverage	$1,000,000 each act and aggregate $75,000 deductible $73,067	$96,556
AIG/Hays Quote	$500,000 coverage/occurrence and aggregate $75,000 deductible in each instance ELPI included in aggregate and policy total $32,155	Included in Public Official Liability Coverage	$1,000,000 each act and aggregate $75,000 deductible $69,589	$101,744
Scottsdale/CEK Quote	$500,000 coverage each person each act $500,000 annual aggregate $50,000 deductible $24,999	$500,000 coverage each person each act $500,000 annual aggregate $50,000 deductible $29,777	$1,000,000 Each act and aggregate $75,000 deductible $59,444	$114,220

It was not possible to retain the same level of deductible in public official coverage.  As previously noted, over the past year, the city has experienced a fairly significant number of claims made.  These claims have not resulted in losses at this time, however they did affect deductible levels. 

Staff Recommendation

Staff has reviewed both proposals and recommends renewal with AIG based on the fact that this renewal represents a 5% premium increase rather than 18% increase for the Scottsdale quote and given the good working relationship we have had with the AIG and the Hays Companies in representing the city in ongoing coverage for the past two years. 

Action

Authorize City Manager to bind coverage for Public Official Liability and Law Enforcement Liability Insurance with AIG Insurance in an amount totaling $101,744.