Agenda Item #40
Renewal of the Board’s Property, Boiler/Machinery, and Terrorism Insurance Policies
The Superintendent requests authority from the Board to bind the District’s property, boiler/machinery insurance, and terrorism policies on or before April 25, 2017. This request is necessary as the District’s current insurance policies are set to expire on April 25, 2017 and we do not anticipate that the renewal quote will be fully known by the Board’s April 18, 2017 meeting, which is the only meeting prior to the renewal date. We anticipate the renewal will not exceed the 2016 renewal rate for all of these policies. The 2016 rate of renewal was $4,696,622.00. The current property insurance policies provide the district with all perils coverage except the peril of a named windstorm up to $150,000,000 in coverage subject to a $100,000 deductible. In the event of a named windstorm, the current property insurance policies provide the district up to $110,000,000 in coverage subject to a 3% replacement value deductible for each building damaged. This policy also includes a maximum loss of $10,000,000 in damages and if that is met the policy will reimburse the district up to the maximum windstorm limit. The boiler/machinery policy covers the district for all property losses that may occur up to $50,000,000 subject to a $25,000 deductible, the 2016 premium for this coverage was $28,430, and our terrorism policy covers the district for terrorism/sabotage activities excluding chemical, biological, radiological, or nuclear incidents up to a maximum loss of $50,000,000 in building damage and $50,000,000 in bodily injury. The policy is subject to a $100,000 per incident deductible and the total cost for this policy was $53,970.00 in 2016.
We believe the 2017 negotiations will result in an overall lower premium than 2016. Should the Superintendent be granted the authority requested, the savings if any will be used to purchase any one or more of the following: more coverage for named windstorm losses, lower the named windstorm deductible, or possibly cap the windstorm deductible to a maximum dollar value lower than at present. If the negotiations become finalized before the 4/18/2017 meeting, we will provide the Board with all the pricing and terms. When the negotiations are finalized, we will provide the Board with an update as to the final pricing and policy terms.
Grant the Superintendent authority to bind the School Board’s Property, Boiler/Machinery, and Terrorism insurance policies as of April 25, 2017 up to a maximum premium of $4,696,622.00. No policies in excess of this amount will be bound without Board approval. If additional premiums should be required, they will be presented at a future Board meeting.
Information - 3/28/2017
Consent after Information4/18/2017
Authority for Action
Board Policy 8710
Involves Expenditure of Funds Directly in the Classroom
Source of Funding
Operating - Other
Mark Langdorf, Director
Employee Benefits and Risk Mangement
Attachment: 2016-17 Chart for Property, Boiler, and Terrorism Insurance Renewal - 3-8-2017.pdf
Attachment: Cost Analysis Property, Boiler-Machinery and Terrorism Insurance Policies.pdf