Title
Property & Casualty Insurance and Workers Compensation Renewal
History
The Horton Group conducted a comprehensive marketing analysis for all Property & Casualty lines of insurance coverage on behalf of the Village and recently provided the final recommendations for the December and January renewals. The combined renewal premium for the 2025 term will result in a premium increase of approximately $130,000, which is approximately $45,000 less than the 2024 increase. The growth in costs is driven by a combination of the current, difficult insurance market, increase in Village exposures such as total insured property values, Village expenditures and value of owned auto fleet. Furthermore, municipalities which carry Cook County exposures continue to face a more restrictive insurance market than those based in other counties. The number of carriers willing/able to insure in Cook County continues to decrease.
Several years ago, the Village decided to move to public entity insurance pools in order to offer the Village broad based public entity specific coverage terms, pooling risk with other risk conscious public entities, cost effective pricing and specific claims administration services geared towards public entities.
The Horton Group recommends renewing coverage with the Illinois Counties Risk Management Trust (ICRMT) and the Illinois Public Risk Fund (IPRF) for 2025 policy term. If approved, the 2025 coverage year will represent the third renewal for both public entity risk pools.
Illinois Counties Risk Management Trust (ICRMT)
Since 1983, ICRMT has provided insurance and risk management services to Illinois public entities. ICRMT offers a full line of coverage options, including property and liability, and has grown to over 450 public entities. With a hard market comes increased premiums and policy forms providing less coverage, lower limits and stricter terms. As a result, many of Horton’s larger public entity clients continue to renew with ICRMT.
With ICRMT, there is no additional Third-Party Adjuster (TPA) expense as it is included as part of the coverage (saving the Village approximately $20,000 annually), and the coverage is far broader (i.e. excess is “over” each casualty line of coverage). Similarly, IPRF does not carry TPA fees which also minimizes village expenses.
Coverage renewal costs are detailed below for the period beginning December 1, 2024.
Property: Expiring - $280,019; Renewal - $305,353
Public Entity Package: Expiring - $232,957; Renewal - $265,533
Auto Liability & PD: Expiring - $77,512; Renewal - $77,769
Excess Liability: Expiring - $452,174; Renewal - $511,390
Cyber Liability: Expiring - $26,265; Renewal - $25,861
Illinois Public Risk Fund (IPRF)
In 1985, IPRF was established to provide a cost-effective public entity alternative to escalating workers' compensation premiums. The pool uses CCMSI as its claim TPA. The IPRF program has the best combination of premium and deductible.
The following details the renewal costs by type for the period beginning January 1, 2025.
Crime: Expiring - $4,502; Renewal - $5,161
Drone: Expiring - $16,532; Renewal - $16,800
Workers’ Compensation: Expiring - $198,540; Renewal - $199,510
Pollution: Due to the ongoing construction of the Village fueling station, a quote for this coverage is pending. The Board will be asked to consider this coverage at an upcoming meeting.
Horton’s annual service fee is $35,000, which is unchanged from 2024. Tony Evans from the Horton Group will be available to explain the renewal process, results, and to answer questions.
This agenda item is being considered by the Committee of the Whole and the Village Board of Trustees on the same night.
Financial Impact
The Proposed Budget included preliminary estimates based on projections available at the time. The FY2025 budget will be revised to include the amount necessary to fully fund the liability insurance program.
Recommended Action/Motion
I move to approve the liability insurance for Property in the amount $305,353; Public Entity Package in the amount $265,533; Auto Liability in the amount $77,769; Excess Liability in the amount $511,390; Cyber Liability in the amount $25,861and effective December 1, 2024;
AND
Approve the Excess Workers Compensation in the amount $199,510; Crime Policy in the amount $5,161; Drone Policy in the amount $16,800 and effective January 1, 2025;
AND
Approve the Horton Group Annual Brokerage Fee in the amount $35,000;
AND
Authorize the Village Manager to execute all related contracts, subject to Village attorney review.