04-24-2012 Special School Board Meeting
Agenda Item #17


Title
School Board Property Insurance Policy Renewal

Discussion

Grant the Superintendent the authority to bind the School Board's property insurance and the School Board's boiler and machinery policies as of April 25, 2012 to a maximum not to exceed premium cost of $6,066, 888. The request to grant the Superintendent authority to bind is necessary as the Board's property insurance policies will expire on April 25, 2012. We anticipate property insurance negotiations will be concluded before the April 24, 2012 Board Meeting, but in the event negotiations are not completed, authority to bind is needed to assure that property insurance will be in place on April 26, 2012. The actual premium and terms for the District's property insurance policies will be presented to the Board as soon as negotiations with the insurance carriers are completed. Last fiscal year, the School Board was able to procure policies with sixteen (16) insurance carriers divided into six (6) separate layers of coverage for a total premium cost of $4,493,991. These policies include a $100,000 deductible for all perils except named windstorm. Named windstorms require a deductible equivalent to 5% of the appraised value for each building damaged subject to a minimum loss of $500,000 per storm. In the event of a loss, these policies would pay up to a maximum of $100,000,000 for all perils except named windstorm's or hurricane's which carry a maximum payment of $70,000,000. This renewal will require an additional budget allocation of up to $1,572,897, which represents a 35% premium increase for a total premium increase to $6,066,888.

*As of April 13, 2012, all but $1.3 million of the fourth layer of the District's six layer property insurance schematic has provided firm pricing (See attachment: 2012-2013 Property Insurance Renewal by Layer 4-12-12). We anticipate the entire renewal will be complete by 4/25/2012 and the expected increase will be slightly less than 12% of last fiscal year's renewal for a premium cost of $5,042,591, including all costs and assessments.



Recommendation
Grant the Superintendent the authority to bind the School Board's property insurance and the School Board's boiler and machinery policies as of April 25, 2012 to a maximum not to exceed premium cost of $6,066,888.

Meeting Date(s)
Information - 4/10/2012
Consent after Information4/24/2012

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
11/124,493,991YES10098550011647900322000
11/121,572,897NO10098550011647900322000

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


Attachment:  2012-13 Property Insurance Renewal By Layer 4-12-12.pdf
Attachment:  2012-13 Property Insurance Renewal Results as of 4-12-12.pdf