HomeMy WebLinkAbout01/19/1999, C8 - RISK MANAGEMENT REPORT FOR 1997-98council
ac En as
Report
C I T Y OF S A N L U I S O B I S P O
FROM: Arm Slate, Personnel Directory
Prepared By: Karen Jenny, Risk Manager
SUBJECT: RISK MANAGEMENT REPORT FOR 1997 -98
CAO RECOMAMNDATION
Receive and file the Risk Management Report for 1997 -98.
DISCUSSION
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The City of San Luis Obispo has invested much time and effort over the past several years in
developing and maintaining a strong risk management program. The 1997 -98 Risk Management
Report reflects an evaluation of the most recently completed fiscal year. It will be used to help
determine developing trends, both positive and negative.
The report is divided into sections covering the elements of risk management, the cost of risk, the
workers' compensation program, City wellness programs, the liability program and the
commercial insurance program. Graphic representations show claims history by department for
both workers' compensation claims and liability clams. Information is also provided on City
wellness programs.
The five -year claims history understandably shows that the higher risk departments, such as
Police and Fire, have the greatest share of the total expense. Police Department claims were
down in 1997 -98. However, Fire Department claims showed a dramatic increase in 1997 -98, due
to a number of back, heart, groin and bicep tendon injuries. Two such claims account for more
than $68,000 in claim costs for that department. The most frequent injury type for all claims was
musculoskeletal injuries to the neck, shoulder, lower back, arms, legs, ankles and knees,
accounting for 40% of injuries City-wide.
Liability claim costs have averaged about $230,000 per year over the last five years. 1997 -98
costs are slightly above that average but show a decrease over the previous year. The largest
number of claims were filed against the Public Works Department, with the majority of those
being for slips and falls as a result of allegedly faulty sidewalks or street design. The Police
Department had the next highest number of claims, most commonly for false arrest or
harassment. Unfortunately, even though the City is regularly found not to be at fault, the legal
process of defending claims is still expensive.
Looking at the trends over the last five years, workers' compensation costs have decreased, but
the number of claims has increased. It is hard to know exactly what causes a "good" workers'
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Council Agenda Report - Risk Management Report for 1997 -98
Page 2
compensation year, but it is our hope that, thanks to our active Safety and Wellness Programs,
the trend of cost reduction will continue. Although the number of liability claims has decreased
over the last five years, the costs have remained steady. This is most likely related to the cost of
defending claims.
It is inevitable that, even with an aggressive risk management program, the City will experience
an increase in the number of claims as our society continues to be more litigious. The City will
need to continue to devote adequate resources to an already strong risk management program so
that those losses that are associated with the kinds of exposures California cities face can be
minimized.
FISCAL IMPACT
None.
ATTACHMENTS
Risk Management Report for 1997 -98
(Council and CAO only. Copy available in City Clerk's Office for review.)
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city of san luis oBispo
pEnsonnet 6epautment
Risk. Management Report
Fiscal Year 1997-98
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Introduction......................................................... ...............................
Elements of Risk Management ...................................... ..............................1
Risk Exposure
Risk Evaluation
Risk Control
Risk Funding
Risk Management Administration
Costof Risk ................................................................... ..............................3
Workers' Compensation Program ................................ ............................... 4
Program Structure
Loss Analysis
Activities and Goals
Wellness Programs ........................................................ .............................10
LiabilityProgram .......................................................... .............................13
Program Structure
Loss Analysis
Activities and Goals
Commercial Insurance Program .................................... .............................16
ACKNOWLEDGMENTS
We would like to acknowledge the help of the following in the preparation of
this report:
Gregory B. Bragg and Associates — statistical information on workers'
compensation claims.
Carl Warren and Company — statistical information on liability claims.
Prepared by:
Karen Jenny, Risk Manager
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INTRODUCTION
During the late 1970's and early 1980's, governmental entities and their public officials were
embroiled in severe financial and insurance difficulties because of the erosion of official
immunity doctrine and the rising tide of litigation in our society. As a result of these trends,
insurance premiums and deductibles rose drastically in the mid- 1980's while coverage was
significantly reduced or not available. The City's response to these trends was to enter into self -
insurance for liability and workers' compensation programs. These changes in the City's
insurance programs have made understanding and controlling City risk exposures a primary
concern.
The objective of the City's Risk Management Program is a coordinated and continuous effort to
uncover significant loss exposures, apply reasonable and effective risk control, and ensure that
the financial integrity of the City is not impaired after a loss.
The purpose of this report is to summarize the activities and programs of the City's risk
management effort. The intent of the report is to identify the City's cost for risks, the City's risk
experience, and the City's programs for risk management
ELEMENTS OF RISK MANAGEMENT
The purpose of risk management within the City is twofold: first, it seeks to protect the resources
of the City from loss or destruction-, and second, it seeks to continue the financial viability of the
City by ensuring that expected and unexpected losses are properly financed. This is done
through the following basic elements of risk management:
Exposure Identification is the continuous process of identifying the resources for
which the City is responsible and the accidental loss exposures that could affect them. In
San Luis Obispo, this is accomplished through a program of periodic facility/site surveys,
contract and policy review, a Safety Committee, and active participation in the Central
Coast Cities Self Insurance Fund Risk Management Committee.
Risk Evaluation is the measurement of risk by analyzing past loss frequency and
severity and estimating future frequency and severity. This is accomplished through
analyzing loss reports produced by the City's workers' compensation and liability claims
administrators. This report will provide a summary of these loss reports.
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City of San Luis Obispo
1997 -98 Risk Management Report
Risk Control is the reduction or elimination of risk or loss through procedures and
practices in security, personal safety, fire prevention, vehicle safety, and emergency
planning. This function is actively pursued by the City's Safety Committee and the Risk
Manager. Since the City self- insures many of the risks, risk control is even more critical
in preventing or reducing losses, thus saving direct costs for the City. Risk control
activities are identified in various sections of this report.
Risk Funding is the provision of sufficient funds to meet loss situations if they occur
by the most effective use of internal and external financial resources, including insurance.
The City participates in a Joint Powers Authority (JPA) called the Central Coast Cities'
Self Insurance Fund (CCCSIF), which is a banking group set up to purchase insurance.
The following section identifies the cost of risks to the City, while Table III provides a
schedule of insurance coverage for the various City insurance programs.
Risk Management Administration is the development of administrative techniques
to carry out the risk management process most effectively, using skills both within and
outside the City. This includes overseeing the administration of claims handled by third
party administrators for the City's workers' compensation and liability programs,
providing direction to the City's Safety Program, and assisting all City departments as
appropriate.
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City of San Luis Obispo
1997 -98 Risk Management Report
COST OF RISK
The cost of risk for the City is the sum of costs for all self - insurance and commercial insurance
programs. The self - insurance programs are detailed further to account easily for excess
insurance costs, administrative costs, services, and incurred claim costs. These costs are shown
below in Figure 1.
Risk Cost for 1997 -98
Insurance or
"1997 -98 .::•
1996r97
Self- Insured Coverage
Cost: :, . ;' :
Cost
Workers' Compensation Total Expense
8:58;021:
800,031
Liability Total Expense
- 515,490.
573,479
Property—Multi-Peril, Fire,
41,125
40,779
(Including Boiler and Machinery)
Mobile Equipment
31;830.
27,977
Volunteer Insurance
1612
1,582
Faithful Performance Bond
: Q
8,372
(Three-year policy paid every third ear
Total:
". 1;446;078
17452,220
Figure 1
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City of San Luis Obispo
1997 -98 Risk Management Report
WORKERS' COMPENSATION PROGRAM
Program Structure
The City of San Luis Obispo has been self- insured for workers' compensation coverage since
July 1, 1978. In 1984 we obtained an excess workers' compensation policy which currently
covers any claim in excess of $300,000 up to a maximum limit of $5,000,000. Workers'
compensation claims for the City are adjusted by a third party administrator. The Risk Manager
oversees the claims administrator and reviews and coordinates open claims with the adjuster.
The firm of Gregory B. Bragg & Associates has been the City's claims administrator since
January of 1994. Settlement authority for claims is: $5,000 or less - Bragg & Associates, after
consultation with the Risk Manager; $5,000 to $20,000 - City Administrative Officer or his/her
designee; above $20,000 - City Council.
Loss Analysis
The City receives monthly, and annual loss reports from the City's claims administrator,
identifying the nature and cause of each claim, as well as how much has been paid and/or
reserved for each claim. This information is helpful in determining cost of risks by frequency
and severity, as well as the type of risk control to focus on City-wide or within a particular
department.
Reserves are defined as unpaid claim liabilities. A reserve amount is established for each claim
representing potential costs yet to be paid based on the information known about the claim and
historical costs for similar claims. Reserves are modified over time as new facts about the claim
are known.
The City of San Luis Obispo's claims represent 28% of the total claims reported by the Central
Coast Cities' Self- Insurance Fund (CCCSIF) during 1997 -98. At the same time, San Luis
Obispo's losses represent 30% of the CCCSIF's total losses.
Ninety-one (91) workers' compensation claims were filed during 1997 -98, an increase from 76 in
the prior year. Total incurred cost (actual paid -to -date plus estimated reserves) went from
$696,341 in the 1996 -97 fiscal year to $601,596 in 1997 -98, for a decrease of $94,745. It should
be noted, however, that workers' compensation claims tend to "mature" over a period of 2 -3
years, so we can expect the total incurred costs for 1997 -98 to increase. It is hard to know exactly
what causes a "good" workers' compensation year, but it is our hope that, thanks to our active
Safety and Wellness Programs, the number of claims can be reduced in the coming year.
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City of San Luis Obispo
9997 -98 Risk Management Report
Below is a list of incurred claim costs by year and department for five years:
Five Year Workers' Compensation Claims History
Fiseal -.
Year
_.Fire ' /6 of
:_ ___Total.
Police:
-_ -- -- -- -_-
�� of:
3otal_
- PUiSRy - - -:96 of.
___Works_ : "Total
Utinties
_ -= .
% of
_ Total
Other- .
%-of'
:
Total
1993 -94
$ 30,267
10.4%
$ 175,799
60.3%
$ 26,615
9.1%
$ 54,008
18.5%
$ 5,017
1.7%
$
291,706
No. Claims
25
30.5%
27 32.9%
13
15.9%
7
8.5%
10
12.2%
82
1994 -95
342,120
68.6%
37,313
7.5%
17,435
3.5%
72,215
14.5%
29,336
5.9%
$
498,419
No. Claims
36
37.5%
18
18.8%
18
18.8%
13
13.5%
11
11.5%
96
1995 -96
195,431
29.7%
52,754
8.0%
25,698
3.9%
13,235
2.0%
371,520
56.4%
$
658,638
No. Claims
20
23.8%
28
33.3%
9
10.7%
9
10.7%
18
21.4%
84
1996 -97
40,513
5.8%
513,642
73.8%
44,710
6.4%
1,672
0.2%
95,804
13.8%
$
696,341
No. Claims
15
19.7%
26
34.2%
16
21.1%
7
9.2%
12
15.8%
76
1997 -98
134,278
22.3%
364,231
60.5%
16,464
2.7%
1,015
0.2%
85,608
14.2%
$
601,596
No. Claims
36
39.6%
26
28.6%
14
15.4%
2
2.2%
13
14.3%
91
Total
$742,609
27.0%
$1,143,739
41.6%1
$130,922
4.8%
$142,145
5.2%
$587,285
21.4%1
$ 2,746,700
No. Claims
1 132
30.8%
125
29.1%1
70
16.3%
38
8.9%
64
14.9%
429
Figure 2
Evaluating all claims, the Police Department accounted for 60% of the City's total incurred claim
cost and nearly 29% of the number of claims filed for fiscal year 1997 -98. The Fire Department
had nearly 40% of the total number of claims, but the cost of claims amounted to 22% of the
total cost for 1997 -98. The Public Works and Utilities Departments decreased both the number
of claims and the cost for those claims.
The most frequent injury type for all claims was musculoskeletal injuries to the neck, shoulder,
back, ribs, arms, legs, ankles and knees, accounting for 40% of total injuries City-wide. Of these
injuries, back injuries were the most common, making up 18% of the total claims filed. Cuts and
bruises comprised 12% of total claims filed, lung and throat irritation another 9 %, with the
remainder falling into a variety of miscellaneous categories.
5
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140
120
0
E 100
m
V
`0 80
a 60
E
z 40
20
City of San Luis Obispo
1997 -98 Risk Management Report
Five Years of Workers Compensation Claims
Fire Police Public Utilities Other
Works
Figure 3
Figure 3 is a graphic illustration of the total number of claims filed over five years by
department. Note that the total number of claims reported does not have a direct correlation to
the total cost of claims as shown in Figure 4 below.
1.40
0 1.20
1.00
E
0.80
U
m 0.60
v
= 0.40
0
Z; 0.20
0
U
Figure 4
Five Years of Workers Compensation Claims
Fire Police Public Utilities Other
Works
Figure 4 is a graphic illustration of five years total of workers' compensation claims costs by
department.
6
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a
0 600
C
500
0
t
400
0
V 300
E
a 200
U
0 100
0 -
c
1993 -94
Figure 5
City of San Luis Obispo
1997.98 Risk Management Report
History of Claims Costs by Department
1994 -95 1995 -96 1996 -97 1997 -98
--*-- Fire
—0— Police
— Public Works
—X Utilities
--*-- Other
Figure 5 is a graphic illustration of each departments' changing Worker's Compensation claim
costs by year from 1993 -94 to 1997 -98.
0
U
E
m
U
v
m
3
U
C
1993-94 1994 -95 1995 -96 1996-97 1997 -98
Figure 6
■Other
O Utilities
0Public Works
■ Police
EI Fire
Figure 6 shows each departments Workers' Compensation claim costs as compared to the total claim costs
in the years from 1993 -94 to 1997 -98. Costs are illustrated as a percentage of total claim costs.
`I
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City of San Luis Obispo
1997 -98 Risk Management Report
1997-98 WORKERS' COMPENSATION CLAIMS OVER $5.000
Department
Iniury
Cause
Finance
Shoulder and elbow strain
Repetitive motion
Public Works
Neck and shoulder strain
Motor vehicle accident
Police
Back strain
Cumulative trauma
Police
Chest and arm pains
Stress
Police
Psyche, gastrointestinal
Unknown
Police
Back strain
Bending over
Police
Carpal tunnel syndrome
Repetitive motion
Police
Back strain
Combative suspect
Police
Groin strain
Combative suspect
Fire
Rapid heart beat
Unknown
Fire
Neck pain, headaches
Strain, awkward positions
Fire
Neck pain, headaches
Cumulative trauma
vascular system, internal organs
Fire
Cracked rib, bruises
Motor vehicle accident
Fire
Tom bicep tendon
Fire training exercise
Fire
Groin strain
Tilting cab on fire engine
Activities and Goals
Incurred
16,300
10,500
32,613
34,987
17,000
7,670
93,500
12,800
39,800
14,216
19,704
16,960
8,000
45,500
23,000
The City of San Luis Obispo implemented an Injury and Illness Prevention Program in 1991 -92.
The program is designed to reduce and keep to a minimum occupational accidents and injury as
required by the passage of SB 198 in October, 1989.
The key elements of the Injury and Illness Prevention Program are:
• - Identification of the person(s) responsible for implementing safety programs;
• A system for identifying and evaluating work place hazards including inspections
and accident investigations;
• A program to correct unsafe and unhealthy conditions in a timely manner;
• Health and safety training instructing employees in safe practices;
• A system to communicate with employees regarding safety, including means for
employees to report hazards and unsafe work practices without fear of reprisal
(i.e., safety committee); and
• A system ensuring that employees comply with safe and healthy work practices,
which may include disciplinary action-
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City of San Luis Obispo
1997.98 Risk Management Report
The Safety Committee continued to be active in promoting safety awareness and training. In the
process, the following activities took place during 1997 -98:
• Defensive Driver Training
Classes in Defensive Driving were offered for employees who regularly drive on City
business. The classes were taught by State Office of Risk and Insurance Management at State
offices in San Luis Obispo
• Personal Ergonomics Training
Training classes in personal ergonomics included discussion of how the various parts of the
neck, shoulders and anus work together and how employees can protect themselves from
injury; a self-assessment by employees; and an evaluation of a typical worksite. Although the
classes focused on dispatchers, a wide variety of employees were able to attend.
• First Responder Awareness
The City's Industrial Waste Coordinator instructed Public Works and Utilities Field staff to
increase their awareness of safe and competent hazardous material response actions.
Participants learned to recognize a hazardous materials event; basic identification and hazard
assessment techniques; and how to make the required notifications.
• Safety Incentive Program
The Safety Incentive Program continued for the fourth year with individual awards to
employees who suggested safety improvements in their work areas. Safety suggestions
included a procedural change to limit exposure to high voltage electricity, racks for holding
specialty equipment, automatic gas shut -off valves, wide angle mirrors on service trucks, door
maintenance, and preventing a vehicle accident from causing private property damage by
quick - thinking action.
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City of San Luis Obispo
1997 -98 Risk Management Report
WELLNESS PROGRAMS
The City's Overall Wellness Program
The City implemented a voluntary Wellness Program for all regular City employees in
November of 1986. The Wellness Program for the City of San Luis Obispo was inspired by a
desire to develop a preventative program that would increase employee productivity and at the
same time decrease the City's health- related costs. Currently, the program has approximately
150 members.
By encouraging employees to participate in this program, the City believes that a new attitude of
health and fitness awareness will result. From this knowledge a healthier and more fit work
force will emerge. Benefits to the City include a safer, healthier, more productive work force;
benefits to the employee include reduced injuries, illness and accidents, and improvement in the
quality of life.
The program consists of the following components:
1. A health risk appraisal which provides computerized feedback based on blood tests and
employee supplied health information. This appraisal is interpreted for the employee by a
health professional.
2. A Nutrition Profile for each employee based on answers to a questionnaire.
3. A Fitness Evaluation which includes blood pressure measurement, body fat measurement,
and testing of muscular strength, endurance, flexibility, and aerobic capacity.
4. Fitness goal setting done individually by each employee to provide direction for his/her
own particular fitness activities.
5. Fitness and educational activities selected by the employee which allow him/her to meet
established goals.
6. Re- testing and re- evaluation of goals at the end of each 6 -month session. Partial subsidy
of expenses is available to employees who follow pre - determined requirements and
achieve their goals.
7. Educational programs offered on a bi- monthly basis.
A survey of employee participants showed Wellness employees to have a higher understanding
of proper nutrition and be more satisfied with the elements of work life, interpersonal life and the
direction of their life.
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City of San Luis Obispo
1997 -98 Risk Management Report
To further aid employees in their effort to stay physically and mentally fit, the City offers an
Employee Assistance Program administered by Managed Health Network (MIIN), formerly
Occupational Health Services. MHN provides a wide -range of counseling services to all
employees and eligible family members including: marital and family problems, alcoholism,
drug dependency, financial and credit concerns, legal issues and questions, tax problems,
emotional problems, stress, childcare, eldercare, interpersonal conflicts and situational life
problems.
Fire Department Wellness Program
The Health and Fitness Program for the San Luis Obispo City Fire Department assists the
members of that organization in maintaining a high level of physical fitness.
Beginning January 1, 1990 a physical fitness program was implemented to meet the training
requirements of each Fire Department safety employee. This program adopted as guidelines the
policies outlined in Chapter 8 of the 1987 edition of the National Fire Protection Association
Standard 1500. Physical conditioning programs in public safety departments have shown
beneficial physiological changes, improved physical performance, and a reduction in cardio-
respiratory disease risk factors. A properly designed and managed physical conditioning
program is the best solution to the problem of low fitness, high injury rates, and excessive
cardiovascular disabilities among firefighters.
Program Components:
The design of an effective fitness program must include certain essential factors to insure its
success in the Fire Department. These factors include, yet are not limited to:
a) a comprehensive health and fitness evaluation;
b) an hour during the scheduled work day which allows the participant to workout and
attend to his/her fitness needs;
c) provide proper equipment, exercise area and an atmosphere which permits each
individual to strive to reach a high fitness level.
d) cooperative arrangement for ongoing fitness evaluations at Cal Poly University at varying
intervals.
e) fitness evaluation available every six months through the City -wide Wellness Program.
Through the ongoing implementation of its program, the San Luis Obispo Fire Department has
become an organization committed to assisting its personnel in reducing the health risks resulting
from occupational demands. The department strives to develop and maintain a level of fitness in
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City of San Luis Obispo
1997 -98 Risk Management Report
each employee that contributes to the wellness of that individual and to the department as a
whole. The objectives of the program are:
Provide each employee an opportunity to learn more about making positive lifestyle
changes for themselves and their families.
2. Increase employee morale and effectiveness.
3. Reduce early retirement due to disability.
4. Reduce the number of sick days taken due to stress, injury or illness.
5. Maintain the health of all safety personnel above levels of disease and injury risk.
1997 vs. 1998 On- The4ob Injuries /Accidents by Fire Suppression Personnel.
There were eight reported incidents of back strain in 1997 -98 among fire suppression personnel,
with six resulting in lost time. This number is a increase in reported incidents from the prior
year's six reported back injuries, and a increase in the number resulting in lost time from three to
six.
Knee injuries also increased in 1997 -98 from none to one. All other types of injuries ranged from
various musculoskeletal injuries to cuts and throat and lung irritation while responding to a fire.
The year total for work - related injuries increased from 15 injuries in 1996 -97 to 36 in 1997 -98, a
140% increase.
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City of San Luis Obispo
1997 -98 Risk Management Report
LIABILITY PROGRAM
Program Structure
On July 1, 1978, the City joined the Central Coast Cities Self Insurance Fund ( CCCSIF) for
liability coverage. The City is self - insured through the CCCSIF for the first $100,000 for liability
claims, which include bodily injury, personal injury and property damage to the public. Carl
Warren and Company adjusts claims for the CCCSIF member cities. Sedgwick of California
provides administrative services to the CCCSIF. Settlement authority for claims is: $1,000 or less
- Carl Warren and Company; $1,000 to $10,000 - City Administrative Officer or his designee;
$10,000 to $100,000 - City Council. For claims in excess of $100,000 the CCCSIF has purchased
excess liability insurance through Zurich American Insurance Company, Travelers Indemnity
Company, Reliance Insurance Company, The Royal Insurance Company, and Lexington
Insurance Company up to a total of $70 million. The City paid a deposit premium to the CCCSIF
in 1997 -98 of $513,490. This deposit includes the estimated cost of claims, administrative charges
and the cost of purchasing excess liability insurance.
Loss Analysis
The City receives monthly loss reports from Carl Warren and Company. These loss reports
indicate each claim with a brief description, and identify expense reserves, paid loss reserves and
total incurred expense, which is the total of actual expenses plus reserves. The report is organized
by year of claim occurrence. Table I shows the City's claim experience for the past five years.
Table Il summarizes individual liability claims over $10,000.
Reserves are defined as unpaid claim liabilities. A reserve amount is established for each claim
representing potential costs yet to be paid based on the information known about the claim and
historical costs for similar claims. Reserves are modified over time as new facts about the claim are
known.
The total liability claim costs for the City in fiscal year 1997 -98 were $235,870, a decrease of 39 %.
The Public Works Department had the highest number of claims (24); however, the Utilities
Department had the largest claim cost of $106,548, representing 45% of the City's total claim costs.
The cost of claims for the Public Works Department decreased by 70 %. Of the 24 claims filed for
Public Works, 14 were for alleged sidewalk and street design defects, which was the most common
claim type filed in fiscal year 1997 -98. The Police Department had the next highest number of
claims (13) representing a total claim cost of $13,875. The Utilities Department had 11 claims,
representing a significant increase in claim costs for the department. This is attributed four claims
for damage as a result of a water main break The most common claims filed against the Utilities
Department were sewer back -ups.
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City of San Luis Obispo
1997 -98 Risk Management Report
Figure 7 below displays the total cost associated with these claims by department.
120
100
a 80
v
c
m
m
0
0
60
w
m
°
p 40
20
Figure 7
Liability Claims by Department
1997 -98
Public Recreation Police Fire Utilities Other
Works
Activities and Goals
Departments are becoming more and more conscious of the need for analyzing the certificates of
insurance received from contractors, and with the help of the Risk Manager, they have worked with
many different contractors to achieve compliance with the City's insurance requirements. These
requirements help to insure that the transfer of risk to the contractor responsible for the work will be
supported by sufficient insurance to pay claims in the event of losses due to something the
contractor does which causes damage to City or private property.
The Public Works, Utilities and Finance Departments are mostly involved in monitoring
compliance, and, during 1997 -98, the Risk Manager met with employees in those departments to
review the adequacy of the insurance requirements and the process for verification. The Risk
Manager reviews exceptions to the requirements and will waive or modify the requirements
depending on the scope of the contract and potential risk to the City.
The City also continues to use its Tenant User umbrella policy under which public groups or
individual may purchase insurance for their special events. In order to streamline the purchasing
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City of San Luis Obispo
1997 -98 Risk Management Report
process, the Recreation Department sells tenant user insurance as part of it parks user permit
process. This means the public can purchase insurance as well as reserve a City park all in one
stop.
The Risk Manager sat in on the pre -event discussions for a number of special events such as the
Holiday Parade, Criterium, Mardi Gras, City to Sea Mini- Marathon, and Street Painting Festival to
assure that there was compliance with City Risk Management Policies.
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City of San Luis Obispo
1997 -98 Risk Management Report
COMMERCIAL PROPERTY INSURANCE PROGRAM
Insurance is purchased by the City through Sedgwick James of California to cover all insurable
property. Generally, insurable property is covered for all risks except earthquake and flood with a
total of nearly $71 million in insured values. The City also purchases boiler and machinery
insurance to cover heavy mechanical equipment such as water well pumps. We also participate in
the California Public Entity Mobile Equipment Program which insures large pieces of mobile
equipment, such as fire trucks, which have a value in excess of $50,000. The total value of insured
equipment under this program is nearly $2.8 million. In addition, the City purchases honesty and
faithful performance bonds, for its employees. There was one claim made for damage to a fire
engine during the 1997 -98 fiscal year. See Table III for a schedule of City insurance.
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City of San Luis Obispo
1997 -98 Risk Management Report
TABLE I
Five Year History of Liability Claims
Net Resecyes_ _ : Net tPaymei is Total Incurred
No.
Claims Loss EXP-; -. - :Total.- Loss' : EXP _ ` Total Loss :. Em Total
07/01/93 - 06/30/94 _
Open 0 0 0 0 0 0 0 0 .0 0-
Closed 65 (160) 0= (160) 27,775 .23,678 51,453 27,615 .23,678 51,29i
Total 65 (160) 0 (160) 27,775 23,678 51,453 27,615 23,678 51;293
17/01/94 - 06/30195
)pen 4 70,000. 16,868. 86,868 0 13,132 13,132 70,000 30,000 100,000
.losed 97 0 0: 0 47,611 80,471 128,082 47,611 80,471 .128,082
'otal 101 70,000 16,868: '86,868 47,611 .93,603 141,214 117,611 110;471 228,082
17/01/95 - 06130/96
)pen 3 81 772 853 20,113 23,728 43,841 20,194 24,500 44,694
Nosed 69 0 0 0 81,197 137,324 218,521 81,197 137,324 218,521
'otal 72 81 772. 853 101,310 161,052 262,362 101,391 161,824 263215
17101/96 - 06/30/97
)pen 36 85,182 81,324 167,506 43,896 31,153 . 75,049 130,078 112,477 242,555
Nosed 43 0 0 0 25,564 117,699 143263 25.564 117,699 143263
%)F 79 86,182 81,324 167,506 69,460 148,852 218,312 155,642 230,176 385,818
)7/01/97 - 06/30/98
)pen 42 153,005 47,286 200,291 9,990 13,714 23,704 162,995 61,000 223,995
Nosed 16 0 0 0 7,835 4,040 11,875 7,835 4,040 11,875
Total 58 153,005 47,286 200,291 17,825 17,754 35,579 170,830 65,040 235,870
17
C8 -22
City of San Luis Obispo
1997 -98 Risk Management Report
TABLE II
Total Incurred Costs for Open claims Over $10,000
As of June 30, 1998
_.... _-
- _..PAYMENTS' .. TOTAL'
RESERV ES
DATE. ALLEGED CAUSE LOSS- 'EXPENSES.: LOSS __EXPENSES. 1NCURREE
1994-95
3/10/95 Flooding 70,000 16,868 0 13,132 100,000
1995 -96
9/15195 Use of Equipment 0 772 20,000 23,728 44,500
18
C8 -23
1996 -97
9/26/96 Police Harassment
7,500
5,839
0
16,661
30,000
10120/96 Sewer Back -up
29,267
31,471
733
3,529
65,000
11/16/96 Sewer Back -up
56,000
8,695
7,260
7,805
23,760
1/15/97 Wrongful Termination
10,000
6,888
0
612
17,500
2/10/97 Vehicle Accident
0
0
34,805
2,771
37,576
4/1/97 Violation of Civil Rights
22,500
20,624
0
877
44,001
4122/97 Violation of Civil Rights
10,500
5,000
0
0
15,500
18
C8 -23
1997 -98
7/14/97 Use of Equipment
10,000
347
0
1153
11,500
8/14197 Slip and Fall
10,000
547
0
453
11,000
1/23198 Broken Water Main
56,000
28,129
3,770
8,371
96270
317198 Wrongful Termination
50,000
2,211
0
2,789
55,000
18
C8 -23
City of San Luis Obispo
7997 -98 Risk Management Report
TABLE III
City of San Luis Obispo
Purchased Insurance Policy Summary
Type Company Limit Deductible Premium Expiration
Property
MLP 2850754 -00 Zurich Am. Ins. Co. $ 75,000,000 $10,000 41,125 7/1/98
Travelers Indemnity Co.
QB 8589480 Reliance Ins. Co.
PSD 000254 The Royal Ins. Co.
8898626 Lexington Ins. Co.
Flood and Earthquake
N/A
Boiler and Machinery
Travelers Indemnity Co. 5,000,000
Hartford Steam Boiler
Inspection & Ins. Co.
Municipal Liability
(Incl. E & O)
4797 -2065 Ins. Co. of PA
Automobile Liability
4797 -2065 Ins. Co. of PA
Limited Pollution Liability
4797 -2065 Ins. Co. of PA
Mobile Equipment
100,000
KG 0000525
Twin City Fire Ins Co.
Fidelity Bond
2,000
CCP1285648 (Police)
Fidelity and
CCP1285649 (Others) Deposit Co. of MD
Excess
Workers' Compensation
DRE 3003002860
United States Fidelity
& Guaranty Co.
2,500 Incl. w /property 7/1/98
10,000,000 $100,000
10,000,000 100,000
168,523 7/1/98
Incl. w/ liability 7/1/98
2,000,000
100,000
Incl. w/liability
711/98
1,000,000
2,000
31,830
7/1/98
300,000 2,500 6,338
300,000 2,500 2,034
5,000,000 300,000 10,098
Volunteers
SPS 900303 Ins. Co. of North America 25,000
19
0 1,612
7/1/99
7/1/99
711/98
7/1/98
C8 -24