HomeMy WebLinkAbout2005-12-13; City Council; Resolution 2005-3691
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RESOLUTION NO. 2005-369
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARSLBAD, CALIFORNIA, APPROVING CITY COUNCIL
POLICY NO. 70 REGARDING INSURANCE STANDARDS
WHEREAS, the City requires contractors, builders, subdividers and other persons doing
business with the City to obtain various types and amounts of insurance or bonds; and
WHEREAS, it is necessary to ensure that the insurance and surety companies selected by
those persons meet certain financial and performance standards; and
WHEREAS, a Council policy establishing standards for insurance from contractors,
builders, subdividers and other persons doing business with the City, along with insurance
requirements, specifications and guidelines adopted by the City Manager to supplement and
implement the Council policy will enhance the efficiency of processing insurance matters.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That City Council Policy No. 70 is adopted as shown on Attachment “A” to this
resolution.
3. That City Council Resolutions 91-403,90-96, 89-387, 81-08 and any other resolutions
in conflict are rescinded.
4. That the City Manager is authorized to adopt written insurance requirements,
specifications and guidelines to implement and supplement the Policy and enhance the efficiency
of processing insurance matters.
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I
PASSED, APPROVED AND ADOPTED at Regular Meeting of the City Council of the
City of Carlsbad on the 13 th day of December , 2005, by the following vote:
AYES: Council Members Lewis, Hall, Kulchin, Packard, Sigafoose
NOES: None
ABSENT: None
ATTEST:
H:\WORD\InsuranceWesolution Council Policy on Insurance.doc
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ATTACHMENT A
Page 1 of2
CITY OF CARLSBAD Policy No. 70
Date Issued - 12/13/2005
Effective Date 12/13/2005 1 COUNCIL POLICY STATEMENT 1 Cancellation Date 1 Supersedes No.
General Subject: Administration
Specific Subject: Insurance Requirements
Copies to: City Council, City Manager, City Attorney, Department Heads and Division Heads,
Employee Bulletin Boards, Press, File
BACKGROUND: Insurance is the principal financial means to implement the hold harmless agreement
required of most businesses with which the City does business. It is an invaluable tool to protect the City
from liability costs. It is also a complex tool. Insurance does not lend itself to one size fits all requirements
easily, and the cost and terms vary significantly depending on the type of coverage and the state of the
industry.
The last time the City’s insurance standards were modified was by resolution in 1991. Since that time, the
insurance market has hardened; insurance is more expensive, and some coverage terms have become more
restrictive. The evaluation of insurance needs, review of insurance documents, and steps necessary to ensure
appropriate coverage is in place has become a complex and lengthy process. Staff has seen an increase in
requests for flexibility in requirements, the need for additional resources to help staff tailor requirements to
loss exposures, evaluate risk and coverage issues, review insurance documents for compliance with
requirements, and the need for greater efficiency in the administration and management of these issues.
PURPOSE: This Council policy establishes standards for insurance companies providing coverage required
of those with which the City does business, and will be supplemented by additional insurance requirements,
specifications and guidelines adopted by the City Manager to implement this policy and improve the
processing of insurance matters. These supplementary insurance provisions are to help staff (1) review loss
exposures, (2) identify the need for specialized coverage in unique situations, (3) apply certain requirements
specific to individual coverages, (4) review insurance documents for adequacy of coverage, and (5)
implement the Council policy and the supplementary provisions efficiently.
Page 2 of 2
CITY OF CARLSBAD
COUNCIL POLICY STATEMENT
Policy No. 70 Date Issued 12/13/2005
Effective Date 12/13/2005
Cancellation Date
Supersedes No.
General Subject: Administration
Specific Subject: Insurance Requirements
Copies to: City Council, City Manager, City Attorney, Department Heads and Division Heads,
Employee Bulletin Boards, Press, File
POLICY: It is the policy of the City Council that contractors, builders, subdividers and other persons doing
business with the City are required to obtain various types and amounts of insurance or bonds, and the
insurance and surety companies must meet certain standards.
The City Manager shall adopt written insurance requirements, specifications and guidelines to implement the
following parameters of this Council policy and improve the insurance review and approval process:
1. Except as expressly provided by law or bid specifications to the contrary, insurance or surety
companies securing or insuring any obligation or risk under an insurance policy or surety bond of
which the City is a beneficiary or an additional insured shall meet the following minimum standards:
a. The company shall be admitted to conduct the business of insurance in the State of California.
The City may accept a surplus line carrier on the California List of Eligible Surplus Line
Insurers (LESLI). Any surplus line carrier must meet the rating requirements for a surplus
line carrier included in Paragraph b below.
b. The admitted company shall have a rating in the latest “Best’s Rating Guide” of “A-” or better
and a financial size of $50-100 million (currently class VII) or better. The surplus line
company shall have a rating of “A:X” or better.
2. The Risk Manager may allow a carrier not meeting the criteria above if circumstances and risk
factors justify a lower standard.
3. Contractors, builders, subdividers and other persons doing business with the City who are required to
provide insurance shall provide coverage in a form and in an amount acceptable to the Risk Manager.
3. Administration of this policy will be as directed in a written Administrative Order by the City
Manager.
H:\WORD\Insurance\Council Policy Statement 1nsurance.doc