Memorandum

City of Lawrence

City Manager’s Office

To:	Brandon McGuire, Assistant to the City Manager
FROM:	Gary Cooper, Risk Manager
DATE:	December 22, 2014
RE:	2015 Excess Workers’ Compensation Policy Renewal

Background

The City maintains a self-insured retention of $750,000 for its workers’ compensation insurance program.  The City pays the first $750,000 of any workers’ compensation claim.  The excess carrier pays statutory limits above the city retention of $750,000.

Renewal Process

Few carriers will write policies for small municipal entities.  In the 2014 renewal process, the City solicited bids for this policy and received only one response.  The same has occurred for the 2015 renewal.  There is very little competition in the small municipality workers’ compensation market.  This is due to the high hazard occupations found in local government including first responders and manual labor positions that utilize heavy equipment.

The City’s current Excess Workers’ Compensation policy broker, HRH Willis, submitted the only bid in response to the City’s solicitation.  Staff discussed options with the broker and determined that completing a renewal application with Safety National and obtaining a quote for the 2015 policy period was in the City’s best interest.  Safety National provided an original quote of $76,511 for the 2015 insurance year but the City’s broker successfully negotiated a smaller premium of $68,457.  The insurer’s final quote of $68,457 represents an increase of $13,964 over the 2014 premium.

Recommended Action

Staff recommends renewing coverage for the Excess Workers’ Compensation policy with Safety National for the insurance period of January 1, 2015 to December 31, 2015 in the amount of $68,457.