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Home My WebLink About1974-06-18; City Council; 3118; Cancellation of liability policyI* -,S ^ T H F C I 'JV OF C A R L S B W D, C A L --Z P o P ,V J 3 ^-Z-1 No- ^£JLL$ - Dace.- iTllne 1Rf 1Q74S Referred To Subject Submitted By CANCELLATION OF CITY'S GENERAL LIABILITY POLICY Wm. C. Baldwin Asst. to the City Mgi Statement of the Matter Notice has been received cancelling the General Liability Policy of the City. Chubb/Pacific Indemnity is declining to renew our policy, effective 7-1-74. Pacific Indemnity is going out of the municipal business. Our Brokers (National Certified) can place this coverage with either Indemnity Pacific or Firemen's Fund. Both of these companies are stock companies with an A+AAAAA rating. Exhibit Report to City Manager Staff Recommenda tions to the City Manager I recommend that we negotiate with our present Broker for coverage with one of the other companies named "and that this be for a one year period. Our present Broker assured me that the premium rate will be virtually the same as we are paying Pacific Indemnity. A3 No. " • Date: June 18, 1974 City Manager's;Recommendation Mr. Tierney who works for National Certified will be at the Council meeting to answer questions Council may , have It is recommended that we proceed through M? Tierney on a negotiated basis for liability coverage with a new company. . Council- Action the of $44,745. -2- DATE: JUNE 3, 1974 :TO: CITY MANAGER FROM: Assistant to the City Manager SUBJECT: CITY'S GENERAL LIABILITY POLICY I am in receipt of a letter written to our insurance carrier, Davis and Tierney of National Certified Insurance. This letter is from Chubb/Pacific Indemnity, who are the carriers of the City's General Liability Policy. Chubb/Pacific is invoking their. 30 day notice of cancellation on the City's policy. They site as a reason that the company will have a virtually unlimited, no fault, situation with respect to governmental liability. They further stated that trends have made it difficult for us to properly assess loss reserve values. It makes it difficult to assign realistic premiums to government entity accounts. They concluded by stating that the company has reluctantly decided they can no longer continue to write liability for public entities in California. j i In my conversations with our brokers, they have assured me that they can place our insurance with either Indemnity Pacific or Firemen's Fund at virtually the same premium rates that we are now paying. Both of these companies are stock companies with an A+:AAAAA rating. It is my opinion that we should allow the present brokers to replace our policy for at least another year. At that time we could again go to bid with the policy. I might add that the advantage of dealing with a local insurance broker is that he is available to the City for pro- cessing claims and handling problems that arise regarding insurance matters, rather than having an agent who is in the Los Angeles or San Francisco area. Mr. Tierney has offered to be present at the June 5 or June 18 Council meeting to answer any questions which the City Council may have regarding the situation, WILLIAM C. BALDWIN Assistant to the City Manager WCB:ldg m -FUNNEL & CHRISTsEN INSURANCE D MYERSf SMITH & MARKS ; H DAVIS & TIERNEY INSURANCE Insurance Agents & Brokers . '•' . ' • • " . DIVISIONS OF "NATIONAL CERTIFIED, INC." . :: (7.14)729-7133 . r P. O. .Box 979 \ ' 2802 D Carlsbad Blvd. . ' . Carlsbad, California 92008 June.17, 1974 CITY OF CARLSBAD . '' CITY HALL 1200 ELM AVENUE • ' . CARLSBAD, CA 92008 - . . - ' .--:••' RE: REPLACEMENT OF CITY'S LIABILITY INSURANCE EFFECTIVE JULY 1 . 1974 Gent!emen:. , • When advised by the Pacific Indemnity Company that they were retiring from all "Public Entity. Coverage", including your City, as of July 1, 1974 - we proceeded to check with all of the various insurance companies that we represent to obtain quotations on your City's insurance., "Three (3) Insurance Companies" indicated that they wer.e interested in bidding on same - and we submitted identical updated proposals to "All .Three",, "All of Whom" have a "Best's Rating" of "A+AAAAA". The follow- ing is an outline of the "Bid" of "Each" of the "Three (3)": . I. HARTFORD .ACCIDENT AND TNDEMNI'TY:'COMPANY 3435 WILSHIRE BLVD. . LOS 'ANSELES, CA 90010 A. Coverage: Standard "Bureau" Comprehensive Liability Policy; Including All Coverages outlined in your "1972 Specifications" , b'ut excl udi ng "Professionall LiabiTi ty" Exposures . B. Limits of Liability: $300,000. Each Occurrence on both "General Liability" and "Automobile" Exposures, with "Automobi1e Physical Damage" per .expiring policy. C. Advance Premium - $ 60,682. 11. TIREMAN'S FUND INSURANCE COMPANY ' . . P. 0.: BOX 81151, SAN DIEGOy CA 9ZT3'8" ' • , , A/Coverage.: Standard "Bureau" Comprehensive Liability Policy including All Coverages outlined in your "1972 Specifications" but Excluding "Profess tonal Liabi Tity" Exposures . B. Limits of Liability: $300,000. Each Occurrence on both "General Liability" and "Automobile Exposures" with "Automobile Physical Damage" per expiring policy. C. Advance Premium -: $ 43,381 . CITY OF CARLSBAD Page June 17 2 1974 III. INSURANCE COMPANY OF THE PACIFIC COAST 3250 WILSHIRE BOULEVARD, $UITE_805. LOS ANGELES. CA 90010 A. Coverage- Special "California Public Entity Liability Pol icy">° which is identical to expiring "Pacific Indemnity Policy" *, „'" including All coverages outlined in your "1972 Specifications" with "Professional Liability" exposures covered - and the fo11 owing "Extensions" of coverage provided: 1 . "EXTENSIONS" OF COVERAGE - * a. Specific reference to "Chapter 1681" in Policy. b. Broad Form "Personal Injury Coverage". (i .e.Includes "Discrimination") c. Defense Against Punitive Damages. d. World Wide Coverage e. No Dram Shop Exclusion f. No Watercraft Exclusion g. Broad Form "Property Damage Coverage" And with only the Included few following "Limitations" of Coverage "LIMITATIONS" OF COVERAGE: a. "Inverse Condemnation" and "Pollution" Excluded b. "Bodily Injury Exclusion" with Respect to Injury to "Volunteer Firemen" (i.e. "Same" should be covered under your "Workmen's Compensation insurance") c. "Professional Liability Coverage" excludes destruction of "Tangible Property". B. Limits of Liability T~.General Lia b111ty 2. Automobile Liability a. Bodily Injury b. Property Damage 3. Professional Liability $300,000. Each Occurrence 4. Automobile Physical C. Advance Premium - $ 44 $100,000 $300,000 $100,000 -$ 50,000 $150,000 Damage - As 745. . Each Person . Each Occurrence . Each Occurrence . Each Person . Annual Aggregate per Expiring Policy We wish to point out that the City's "Excess Blanket Catastrophe Liability Policy" written through "Insurance Company of North America" under "Policy No. XBC 10 30 98" does not expire until ' July 1, 1975 - and that this "Policy" provides the City with a "Limit" of "$2,000,000. Each Occurrence"over and above the limits quoted above. The annual Premium for this policy is now $6,150. - but it is our suggestion that the "Limit" be increased to"$5 ,000 ,000 Each Occurrence", which can be effected for an additionalof $1 ,825. Annually.premium — ?•> CITY OF CARLSBAD Page 3 ' ' June 17, 1974 In conclusion, it is the suggestion .of our Agency that "Bid III. •(Insurance .Company of the Pacific Coast)", of which we have filed •a "Specimen Copy" with your Assistant City Manager, be accepted as the "Extra Coverages (including Professional Liability)" could .- not be purchased separately, and in some "Areas" could not be purchased period, for anywhere near the "Difference" of "$1,364." Between "Their Bid" and that of "Fireman's Fund Insurance Company"". 'RESPECTFULLY YOURS, WILLIAM A. TIERNEY .PRESIDENT. WES R. DAVIS :iCE PRESIDENT