04-14-15 Regular School Board Meeting
Agenda Item #19


Title
School Board Property Insurance Policy Renewal

Discussion

The district was able to negotiate and complete the property insurance, terrorism/sabotage, and boiler/machinery insurance policy process and obtain a final price for all of these coverages at $4,752,052.70 including all fees and costs.  The renewal is $17,195.01 less than what the Board paid in 2014-15 even though the renewal provides the Board increased named windstorm coverage, a capped named windstorm deductible, and terrorism/sabotage insurance. 
  
The policy highlights are as follows:

1.Property Insurance: The 19 insurance policies will cover the district’s $1,892,131,730 in total insurable property values as follows:
     a. All perils insurance coverage except the peril of named    windstorm up to $100,000,000 per incident subject to a $100,000 deductible.  
     b. Named windstorms coverage up to $85,000,000 per incident subject to a 3% of each individual building’s replacement value deductible. 
         i.The named windstorm deductible is capped at $15,000,000 per storm.  In other words, once a named windstorm sustains damages      equal $15,000,000 all costs will be paid to the maximum limit of $85,000,000 per incident.
     c.The cost for all policies including all fees is $4,663,622.70.

2. Terrorism/Sabotage Insurance:  The policy covers the district for property damage and third party liability claims resulting from terrorist/sabotage activities excluding chemical, biological, radiological, or nuclear incidents up to a maximum limit of $50,000,000 in property damage and $50,000,000 in bodily injury for a total of $100,000,000 per incident subject to a $100,000 deductible.
     a. The cost for this policy including all fees is $60,000.00.       

3. Boiler/machinery Insurance: The policy covers the district for all property losses that may occur as the result of a boiler incident up to $50,000,000 subject to a $25,000 deductible.
     a. The cost for this policy including all fees is $28,430.00.  The district was able to obtain $15,000,000 more in all perils property insurance coverage for named windstorms than obtained in 2014-15. In addition, the named windstorm deductible is capped at $15,000,000, which was not possible during the 2014-15 renewal.   In addition to property insurance, the district was successful at obtaining a quote for terrorism/sabotage related to political, religious, and ideological purposes.      



Recommendation

Grant the Superintendent authority to bind the School Board’s Property, Terrorism, and Boiler/Machinery insurance policies as of April 25, 2015 at a premium of $4,752,052.70. 



Meeting Date(s)
Information - 3/10/2015
Consent after Information4/14/2015

Authority for Action
Board Policy 8710

Involves Expenditure of Funds Directly in the Classroom
No

Source of Funding
Operating - Other

FY
Amount
Budgeted
Fund
Cost Center
Project
Function
Object
Program
15/16$4,752,052.70Yes10098550011647900322000

Contact
Mark Langdorf, Director of Risk Management, Ext. 620
Judy Preston, Associate Superintendent of Financial Services, Ext. 600


Attachment:  2015-16 Agenda Item Authorization to Bind Coverage.pdf
Attachment:  2015-16 Agenda Item Property Insurance Renewal Results page.pdf
Attachment:  2015-16 Agenda Item Property Schmatic.pdf