Report to Carson Reclamation Authority
Monday, June 07, 2021
Consent
SUBJECT:
Title
AUTHORIZE EXECUTIVE DIRECTOR TO APPROVE AND BIND COVERAGE ON A PUBLIC ENTITY LIABILITY POLICY FROM CHUBB COMPANIES USA, WRITTEN BY ACE AMERICAN INSURANCE COMPANY, PROCURED THROUGH MARSH USA, INC. IN AN AGGREGATE LIMIT OF NO MORE $10,000,000 AND A PREMIUM AMOUNT NOT TO EXCEED $130,040; AND, APPROVE RESOLUTION NO. 21-05-CRJPA IN THE AMOUNT OF $130,040 TO AMEND THE FISCAL YEAR 20-21 BUDGET
Body
I. SUMMARY
This action authorizes the Executive Director to approve and bind a renewal of a Public Entity Liability Policy on behalf of the Carson Reclamation Authority offered by Chubb Companies USA, underwritten by ACE American Insurance Company. As in previous years, Marsh recommends placing such a policy instead of a standard Directors and Officers Liability (D&O) policy to ensure that the public officials are adequately covered for their D&O exposure - personal liability as well as Errors and Omissions exposure (E&O) and Employment Practices Liability (EPL) exposure.
This policy is a much broader D&O type coverage and tailored to CRA in its capacity as a quasi-governmental agency making development decisions on environmentally contaminated property, and includes both E&O and EPL in one policy form.
Due to significant changes in the public officials liability market and the D&O markets overall, the CRA is seeing a significant increase in quoted premium for the same coverage, from slightly less than $80,000 in 2020 to $130,040 this year, while maintaining the Self Insured Retention (SIR) at $250,000. The SIR is similar to the deductible in personal insurance.
The brokers at Marsh have reported that they are seeing similar increases for their D&O clients - from 30% to 100% -- even for policies that do not have a claim history. Inquiries with other carriers have not yielded better results.
One option would be to reduce coverage from $10,000,000 to $5,000,000, which would reduce t...
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