Title
Liability Insurance Renewal 12/1/22 to 12/1/2023
History
The Horton Group completed a coverage renewal market analysis on behalf of the Village of Orland Park and provided the final recommendations for the December 1, 2022, renewal of Liability insurance. The renewal premium for the 2022-2023 term as recommended will result in an increase of $116,210 over last year driven by a combination of the current, difficult insurance market, law enforcement liability exposure and inflation significantly increasing the replacement cost of Village assets and higher medical treatment costs.
At the recommendation of the Horton Group, the Village joined two public entity risk pools for the 2022 coverage year. ICRMT, Illinois Counties Risk Management Trust, accepted the Village of Orland Park membership effective 1/1/22 for Liability and Property coverages. IPRF, Illinois Public Risk Fund accepted the Village’s application for Workers’ Compensation Coverage effective 1/1/22. The decision to move to public entity risks both was made to offer the Village broad based public entity specific coverage terms, pooling risk with other risk conscious public entities, cost effective pricing and pool specific claims administration services geared towards public entities.
The 2023 Coverage year represents the first renewal for both public entity risk pools.
Municipalities which carry Cook County exposures face a more restrictive insurance market than those based in other counties. For example, several public entity insurers have pulled out of Cook County altogether. Additionally, most public entity carriers are increasing rates and restricting coverage forms for specific lines of coverage including:
-Property
-Law Enforcement Legal Liability
-Cyber
-Sexual Misconduct / Abuse
-Excess Liability
Because of the above factors, the Horton Group is recommending renewing coverage with the Illinois Counties Risk Management Trust (ICRMT) and the Illinois Public Risk Fund (IPRF) for 2023 as detailed below.
Illinois Counties Risk Management Trust (ICRMT)
Since 1983, the Illinois Counties Risk Management Trust (ICRMT) has provided insurance and risk management services to Illinois public entities. ICRMT offers a full line of coverage options, including property and liability designed to meet the needs of its public entity clients. Since its inception, ICRMT 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, several Horton clients and other public entities have opted to join ICRMT over the past several months.
With the exception of the cyber liability policy and excess liability, the renewal rates are essentially flat. The ICRMT casualty deductible is $50,000 less than standard market options. 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 more broad (i.e. excess is “over” each casualty line of coverage).
Illinois Public Risk Fund (IPRF)
In 1985, the Illinois Public Risk Fund (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 per claim deductible is $150,000 less for employees and $250,000 less for police than provided by the Village’s previous long term workers’ compensation carrier.
Tony Evans from the Horton Group will be present at the Board of Trustees meeting on Monday, November 7, 2022, to explain the renewal process, results, and to answer any questions.
Financial Impact
The FY2023 budget will include the amount necessary to fully fund the liability insurance program.
Recommended Action/Motion
I move to approve liability insurance renewal agreements with the recommended carriers/vendors and associated expenses effective December 1, 2022;
AND
Authorize execution of said agreements by the Village Manager, subject to Village attorney review.