HomeMy WebLinkAboutAgenda Report - May 4, 1983 (26)AUTHORIZED iblloE%ring introduction of the matter by City Clerk Reimche,
Council, on motion of Council Mmber Murphy, Pinkerton
second, authorized the obtaining of $300,000 Stop Loss
Coverage to the City's Excess Liability Program at a cost of
$7,375.00 and authorized the City's Agent of Record Max
Elson Insurance, Inc. to obtain the subject coverage for the
City of Lodi.
•. _ .d A � t d� .a t ga � ;. �
• .t
.. (�' N ..•.-tri
z
+i t
'ax ted.
LM
'V.�r - r, �`R,.•; 1 a �r,.i .t+<.� r'�a,.�.1:ia ��'s
} e
y 'w t•+it 4�q.
a
w,; r 4 t s F^✓x�$,e, � �,
r
r 4 �r e ,' w z-c�t�;�. ��2 r'.r•SJ i � r'�`„f�t ,�,,�f�.,�� ' � �
.� 3 ♦+.o-� 1 v {v Ylj.�ic�
a� ^Y*.,r � .�. :..'yc. � �'JAi�k. �wr C •�.r 3�tv"•'r a
} i4
t +"i,� t' '^ ,1. r a �^ C s•' bIc ,,M' P, ,ih9
t t .
+ ._Y f .U� ed:� . 7. ar +s a :>1ir r. �r i -r>.. :✓ t t. 4�.�Td� t.
.� :tee i� ``aY'-r »�`,+,•y z.,�''�. a '� �5*�•" ,y ,�•• �t ��;
' t� „.,� X y ..c -C ',Vt - ... ♦3>' _<yL SyR*f aft .�. +�Tv
X.) a r `✓' �5rc T a `f �� , d v .: S+>K a - r%:,
X,
w.
"`z J :r`.s a�J .� •fix � +• .�•�
x Y is r.. - } +` y � "' r�•^',�'t�" ,p�
tom..• .. -. �1 ��;�Y3o'ar', w,
••� Y i2t• �
t
May 2, 1983
Mr. Ron Stein,
CITY OF LODI
221 W. Pine St.
Lodi, CA 95240
Dear Ron:
City Attorney
9
Confirming our discussion today, the cost to add a
$300,000 Stop Loss to the City's Excess Liability
Program would oe $7,375.00.
The.effect of this Stop Loss would be to put a cap
on the maximum amount payable by the City under this
program to $300,000 in any given policy term, per the
attached endorsements (Pages 2 5 6).
As mentioned, there are two schools of thought on
Stop Losses.
The first is that, should there be three occurrences
that have the potential of exceeding the $1.00,000
Self Insured Retention, early in a policy term the
insurance carrier would in all probability cancel
their policy.
The reasoning behind this view is that this program
is designed to have the City absorb the first $100,000
of any one loss. No insurance carrier wants to be in
the position of assuming first dollar coverage under
these circumstances.
The second thought is that with the "long tail" of
litigation, it is very possible that it may be some
time after a policy expires before it is discovered
that the Stop Loss provisions have been fulfilled.
To limit the City's potential outlay as much as possi-
ble, I would recommend to the council that they pur-
chase the Stop Loss and continue to do so in the future.
The question about the "failure to provide" exclusion
creates some problems for the current carrier.
832 SOUTH FAIRMONT AVENUE • LODI, CALIFORNIA 9524i • P.O. BOX 188 • 208/369.'!833 ---/'
This was quoted for the 1982 program and, at that time,
the additional $14,400 in premium seemed excessive in
light of the potential exposure and prior loss history.
f The City's current carrier will remove this exclusion,
but only as it relates to the "failure to provide
water". This would cost an additional $2,950 annually.
This does not, unfortunately, address the rvai exposure
electricity.
If this item creates concern for the council, we can
go back to the market place and attempt a mid-term re-
placement with a carrier that would be willing to cover
this exposure.
Ron, I will await your advice on both these items,