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Home My WebLink About6 Property and Liability insurance Agenda Item #Public Utility District � } Memorandum To: Board of Directors From: Mary Chapman Date: April 13, 2001 Subject: Consideration of renewing the District's property and liability insurance policies for 2001-2002 Attached is the insurance renewal proposal from Aon Risk Services for the District's 2001-2002 property and liability insurance. The total premium for the District's basic insurance package is $208,648 plus the cost for the options that the Board chooses. A summary of the various policy costs is under Section 8 of the proposal. Some of the options are attached. There are also a few options for other levels of coverage and deductibles that we can discuss at the meeting. Included in the 2001 budget is $189,505 for insurance Robb Hubbard from Ron Risk Services will be at the meeting to present the proposal and to answer any questions that you may have. RECOMMENDATION: That the Board renew the property and liability insurance as proposed by Aon Risk Services subject to revisions as agreed upon by the Board. `Rural Electric Utilities 'be St Fhul f� I Underwriting Manage rsT" RURAL ELECTRIC UTILITY PROGRAM Truckee Donner California A Formal Proposal Presented By Robb Hubbard San Francisco April 13, 2001 SECURITY THAT ' S GROUNDED IN FINANCIAL STABILITY 09/01/00 Ed. 14AMeXTA • 1 11 Rural Electric Utilities Underwriting Managers, St. Paul Fire and Marine Insurance Company and Hartford Steam Boiler Inspection and Insurance Company, and Virginia Surety have joined together to provide a comprehensive property and casualty insurance program specifically de- signed for the Rural Electric Cooperatives. We're committed to servicing the needs of the Rural Electric Cooperatives now and into the fu- ture. Our combined years of experience have given us the technical expertise to design a com- plete insurance program to include an effective loss control program and a knowledgeable claims department. Rural Electric Utilities Underwriting Managers and its affiliated agents have been associated with the Rural Electric Cooperatives for over twenty years. During this time we have pioneered many program improvements that have provided enhanced protection for the rural electric utili- ties from their unique risks. Each representative broker is knowledgeable in program design and coverage, service-oriented, and dedicated to meeting the specific needs of cooperatives across the country. Our claims adjusters take a reasonable, common-sense approach to the resolution of claims and we base our claim decisions on timely and factual information. Our approach to claims handling encompasses the best use of our people, our technology and our experience. We guarantee that all claims will be handled fairly. The Loss Control and Risk Management staff are loss control specialists that help you control and prevent loss exposures. These designated and certified safety professionals have the training and experience to work specifically with rural electric utilities. In addition, our safety profes- sionals are also qualified observers of the NRECA's Safety Accreditation Program. CHARTER PLATINUM POISED FOR THE FUTURE MEMBERS OF THE NRECA As your industry changes through deregulation. As part of our long-term commitment to serving you can rely on us to help you through the tran- the Rural Utilities, the St. Paul and Rural Elec- sition. Rural Electric Utilities Underwriting tric Utilities Underwriting Managers are proud Managers and St. Paul Fire and Marine Insur- to be Charter Platinum Associate Members of ance Company are experienced in handling the the NRECA. As Platinum Members, we are insurance coverages for diverse industries that leading participants in The Associates Council, have undergone significant transformations. We which interacts with the NRECA on a broad will stand by our Rural Utility customers and range of issues. In addition, we receive first- provide you with the assistance that you need to hand information on important business trends meet any challenges the future holds. —particularly as they relate to changes in insur- ance exposures, coverages, and costs. The quality provided by The Rural Electric Utility Program is made possible by the teamwork of three outstanding companies. April 13,2001 COMMERCIALPACKAGE POLICY PROPERTY COVERED PROPERTY LIMITS OF LIABILITY Real &Personal Property, Substations, $20,154,202 Tanks, Wells Communications Equipment $86,300 Contractors Equipment(insured to value) $243,831 Motor Cargo $25,000 Miscellaneous Tools $49,540 Extra Expense $500,000 Computer Equipment Hardware, Media &Extra Expense included $725,000 Perils Insured: Against Risks of Direct Physical Loss or Damage(Excluding Flood and Earthquake)subject to the Policy Terms. Conditions and Exclusions Coinsurance: Waived—(100%Insurance Values applicable) Valuation: Replacement Cost except Contractors Equipment which is older than five(5)years, actual cash value will apply. Deductible: $500 per occurrence. A. ADDITIONAL POLICY BENEFITS COVERAGE LIMIT PROVIDED Newly Acquired Buildings........................................................................................$ 1,000,000 Newly Acquired Personal Property.........................................................................$ 500,000 Property In Transit..................................................................................................$ 500,000 Builders Risk/Course of Construction....................................................................$ 500,000 (must be reported within 6 months of construction) Property Away From Premises................................................................................$ 250,000 BlanketEarnings.....................................................................................................$ 100,000 Accounts Receivable-Coverage................................................................................$ 100,000 Valuable Papers Coverage......................................................................................$ 100,000 Building Codes Coverage........................................................................................$ 100,000 Computer Coverage;Hardware And Media (If Not Scheduled Above)...................$ 50,000 (Includes any office files/documents converted to CD ROM.) Contractors Equipment—Rented or Leased(short term/3 months or less)........... $ 50,000 Computer Equipment— Used in the field(owned, rented or leased)...................... $ 50,000 Pollution Clean Up And Removal(due to a covered loss at your location)............$ 25,000 Water Damage Due To Back—Up, Sewers And Drains............................................$ 25,000 Fire Department Service Charge.............................................................................$ 25,000 FineArts Coverage..................................................................................................$ 25,000 Tools owned by Employees(Any one tool S500/$5,000 any one toss)...................$ 5,000 'B , BLANKET CRIME COVERAGE BLANKET LIIIT Blanket Employee Dishonesty* $500,000 Forgery or Alteration Protection $500,000 Money and Securities Protection Loss Inside Your Building $500,000 Loss Outside Your Building $500,000 Computer Fraud Protection $500,000 Depositor's Forgery Protection $500,000 * Coverage extends to collection agents. April t3,2001 BOXIER ELECTRICAL APPARATUS ASSUMPTION CLAUSE MECHANICAL BREAKDOWN COVERED PROPERTY LIMIT Scheduled Locations and Substations Co- S 6,500,000 Generation Facilities Excluded Perils Insured. Provides sudden and accidental breakdown coverage to scheduled properties. Comprehensive Coverage: Including transformers, switchgear and electrical distribution equipment, as well as emergency generators, pumps, motors, boilers and air conditioning equipment. Sublimits: Expediting Expenses: S 100,000 per accident Extra Expense: $ 50,000 per accident Pollution Clean up &Ammonia Contamination: $ 100,000 per accident Spoilage: S 100,000 peraccident Water Damage: COVERED UNDER PROPERTY SECTION Newly Acquired Locations: $100,000 Business Income: NOT COVERED Deductible: Property Damage: $5,000 Transformers: $ 1.50 per KVA based on "midrange nameplate rating,"$5,000 Minimum ICE/Generator Units$30 Per Horsepower$5,000 Minimum Valuation: Repair or Replacement Actual Cash Value on Transformers 30 years old or older that have not been rewound. Eneineerine Services The following engineering services are available: Transformer Oil Gas Analysis (TOGA)for both oil Infrared Thermograph Surveys of main transformers screen testing and dissolved gas analysis tests of se- and electrical distribution equipment at selected sub- lected oil cooled transformers 2,500 KVA and larger. stations. Facilities selected will be determined in co- The appropriate substations will be selected with the operation with the insured. Information describing cooperation of the insured. Information describing these tests and their benefits may be supplied upon re- these tests and their benefits will be supplied upon quest. request. Available on a per account basis All engineering services are performed by Hartford Steam Boiler Inspection and Insurance Company without additional cost. Please contact your REU program representative for more information regarding these services or to request an inspection. Electrical equipment inspection services Electrical equipment requires expert inspection to ensure smooth operation. The services and underwrit- ing for this aspect of the REUP are provided by Hartford Steam Boiler—the world's premier inspector and insurer of industrial machinery and electrical equipment.As part of the Aon Risk Services/St. Paul team, HSB utilizes its experienced engineering and loss control services to help ensure your substations operate safely. Should a loss occur, we are committed to helping you get your system back up as soon as possible. Through HSB's National Supplier Referral Service, we can recommend reliable, qualifed firms that can supply and install any electrical equipment you may need. April 13,2001 D , COMMERCIAL GENERAL LIABILITY COVERAGE COMPREHENSIVE GENERAL LIABILITY LIma OF LIABILITY Bodily Injury, Property Damage' S 2.000,000 per occurrence Personal Injury S 2.000,000 per occurrence Advertising Injury S 2,000.000 per occurrence Products and Completed Work $ 2,000,000 per occurrence S 2,000,000 annual aggregate Fire Legal Liability S 500,000 per occurrence Premises Medical Payments S 10,000 per accident Fire Suppression S 1,000,000 per occurrence Pesticide or Herbicide Application S 2,000,000 per occurrence Failure to Supply(when loss results from acci- S 2,000,000 per occurrence dental loss to tangible property owned/used by the Insured). Weatherization Errors &Omissions-Liability $ 2,000,000 per wrongful act $ 2,000,000 annual aggregate Livestock Injury Coverage $ 5,000 per animal $ 20,000 max.per occurrence Employee Benefits Liability -$1,000 Ded. $ 2,000,000 per wrongful act $ 2,000,000 annual aggregate COVERAGEINCLUDED: Fire Suppression in accordance with the Federal Land Policy and Management Act of 1976 Blanket Contractual 'r Failure to Supply when loss results from accidental damage to utility generating or distrib- uting equipment owned or used by insured. ? Employees as Named Insureds :• Fellow Employee Coverage Host Liquor Law Liability Incidental Medical Malpractice Pesticide or Herbicide application Watercraft Liability, respect to watercraft less than 50 feet long and is not being used to carry people or property for a charge. Non—Owned Watercraft Liability: watercraft less than 75 feet long. Coverage not subject to audit adjustment Defense in addition to limit of liability Contingent Line Movement Expense Reimbursement ? Non-owned Aircraft Liability(chartered with a crew &pilot, not used to carry persons or property for a charge) EXCLUSIONS :• Pollution Liability r Nuclear Energy Liability : Care, Custody or Control of Property unless liability is assumed under a sidetrack agreement Uninsured—Underinsured Motorist Liability ? Directors & Officers Liability exclusion Please note that there is no Aggregate for the bodily injury property damage limit. April 13,2001 Now"MR. . AUTOMOBILE VEHICLES COVERED: Any owned, rented, leased or borrowed auto. It includes hired. non— owned, newly acquired, replacement and temporary substitute autos, but does not include autos owned by your employees or members of their households, borrowed private passenger type autos, or autos where cov- erage has been reduced or limited on the auto schedule. COVERAGE LIMIT OF LIABILITY Bodily Injury and $ 2,000,000 CSL each accident Property Damage Liability Uninsured/Underinsured Motorist Coverage $ 1,000,000 CSL each accident Physical Damage Coverage Comprehensive $ 100 ded.per claim :• Collision $ 500 ded.per claim > Specified Perils—Trailers ADDITIONAL POLICY BENEFITS Fleet Automatic applicable Flat Premium—Policy not subject to audit adjustment :• Employees as Insureds Fellow Employee Coverage MCS 90 Motor Carrier Endorsement Rental Reimbursement-30 days Expenses incurred to rent substitute equipment because of a loss to a covered automobile :• Hired Physical Damage Non—Owned&Hired Automobile Liability Full Glass Coverage April 13,2001 10 L • • COVERAGE EQUIPMENT- LIMIT OF LIABILITY RENTAL DUE TO A COVERED LOSS a Bucket Trucks, Digger Units or similar licensed $ 500 per day equipment. 30 day limitation $ 15,000 per accident b= Other Vehicles $ 50 per day $ 1,500 per accident LOSS VALUATION COVERED AUTOS TEN (10) YEARS OLD OR NEWER For covered autos that are ten(10)years old or newer at the time of the loss, if those covered autos have the following type of mounted equipment: bucket trucks power shovels cranes diggers drills generators air compressors or similar equipment. We'll pay the cost of repairing or replacing the damaged auto without deduction for depreciation.But we won't pay more than the smallest of the following: :• The amount it would cost to replace the damaged auto at the time of the loss with a new auto of simi- lar kind and quality to be used for the same purpose. The actual cash value(ACV)of the damaged or stolen property at the time of the loss, if the damaged property is not repaired or replaced within 365 days of the loss. HYDRAULIC EQUIPMENT 15 YEARS OLD OR NEWER For hydraulic equipment that is fifteen(15)years old or newer,and is attached to a covered auto at the time of the loss, we'll pay the cost of repairing or replacing the damaged auto without deduction for de- preciation.But we won't pay more than the smallest of the following: ? The amount you actually spend in repairing the damage. The amount it would cost to replace the damaged property at the time of the loss with new property of similar kind and quality to be used for the same purpose. :• The actual cash value(ACV)of the damaged or stolen property at the time of the loss,if the damaged property is not repaired or replaced within 365 days of the loss. Except for the state of Louisiana and New York, which are five(5)years for covered autos and ten(10)years for hydraulic equipment. April 13,2001 POLICY'F , UMBRELLA This insurance provides liability insurance protection for your business in excess of the below listed pri- mary insurance. LiVi IIT OF LIABILITY S 10,000,000 Each Occurrence $ 10,000,000 Annual Aggregate $ 10,000 Self—Insured Retention SCHEDULE OF UNDERLYING PRIMARY INSURANCE Commercial General Liability(Bodily In- $ 2,000,000 Per Occurrence jury, Property Damage, Personal Injury) ee Products, Completed Operations $ 2,000,000 Per Occurrence $ 2,000,000 Annual Aggregate Advertising Injury $ 2,000,000 Per Occurrence Employee Benefit $ 2,000,000 Fire Suppression $ 1,000,000 Weatherization $ 2,000,000 Automobile Liability Bodily Injury and Property Damage $ 2,000,000 Combined Employers Liability Bodily Injury By Accident $ 500,000 Each Accident Bodily Injury By Disease $ 500,000 Policy Limit Bodily Injury By Disease $ 500,000 Each Employee EXCLUSIONS Pollution Liability Electro Magnetic Field Liability Nuclear Energy Liability Care, Custody or Control of Property unless liability is assumed under a Sidetrack Agreement Uninsured—Underinsured Motorist Liability Directors & Officers Liability Exclusion April 13,2001 PREMIUM SUMMARY COVERAGE PREMIUM Property $43,935 Crime $1,500 Boiler&Machinery S13,650 General Liability $93,078 Automobile $31,322 Umbrella Liability $25,163 Program Premium $208,648 This proposal is not intended to describe all coverages provided or available or all of their exclusions, condi- tions or limitations It is designed to give you an outline of your insurance/risk management program, but it does not amend, alter, or extend the coverages af- forded by the policies described herein. April 13,2001 OPTIONAL COVERAGES OPTIONAL COMPREHENSIVE GENERAL LIABILITY a) Voluntary Property Damage Endorsement $ 500 Per Resident Consumer $ 5,000 Per Occurrence $ 4,493 Annual Prem. b) Property Damage Deductible per Occurrence: $ 1,000 or $ (6,480)Credit $ 2,500or $ (12,498)Credit $ 5,000 $ (16,664)Credit April 13,2001 ',ELECTRO MAGNETIc FIELD LIABILITY The policy will pay amounts any protected person is legally required to pay as damages for covered bodily injury or property damage that: results from any electromagnetic field; happens on or after the retroactive date and before the ending date of this agreement; and is caused by an event. Electromagnetic field devaluation of real estate: The policy will pay amounts any pro- tected person is legally required to pay as damages for covered devaluation of real estate that: results from any electromagnetic field, and happens on or after the retroactive date and before the ending date of this agreement A $10,000 deductible will apply to each real estate sale. Limit of Liability Annual Premium $500,000 per Claim/$500,000 Annual Aggregate or $1,797 $1,000,000 per Claim/$1,000,000 Annual Aggregate $4,493 April B,2001 • • , • i TINT1625 / 2. LIMITED ABOVE GROUND POLLUTION LIABILITY— CLAIMS MADE Pollution Liability: This policy will pay amounts any protected person is legally required to pay as dam- ages for covered bodily injury or property damage that results from covered pollution incidents. Covered pollution incident means the emission, discharge, release or escape of pollutants from your premises or worksites. But only if such emission, discharge, release or escape: begins on or after the retroactive date; results from an accident; happens entirely above ground; begins and ends within 72 hours; and results in environmental damage. $1,000,000 Each Event/$1,000,000 Annual Aggregate Pollution Cleanup Costs Endorsement Pollution Cleanup Costs: The policy will pay covered pollution cleanup costs that result from the dis- charge, dispersal, escape, or release of pollutants at or from your premises which: begins while this agreement is in effect; is caused by a named peril; :• happens entirely above ground; must be reported within 30 days of discovery Pollution cleanup costs means any reasonable and necessary cost or expense incurred by you for pollu- tion work. Pollution work means: the testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, or neutralizing of any pollutant; or :• the responding to, or assessing, in any way the effects of any pollutant. Named peril means: collision with an aircraft, auto, rolling stock or other vehicle; o explosion; fire; hail; lighting; malicious mischief or vandalism; :• riot or civil disturbance; smoke;or windstorm. Limit: $25,000 Each Event/$100,000 Annual Aggregate * Pollution Claims MUST be reported within 30 days of the discovery in order for coverage to apply. Additional Premium: $ 2,696 April 13,2001