Board Agenda - June 05, 2007

j. Excess workers' compensation insurance

Presenter: Danny Modisette

Purpose: A - Request decision - closure required

Time: No time limit

Description:

Arthur J. Gallagher Risk Management Services, Inc. presented the district with a competitive quote underwritten by Safety National Insurance Company for excess workers' compensation stop loss insurance. Safety National is a very well respected company and writes this coverage for many school districts in Texas.

Although the district is self-funded for workers' compensation, excess coverage protects the fund from potential large claims (any single injury or multiple injuries at one location), similar to the stop loss coverage we purchase for the employee health plan. Fortunately, the $350,000 specific stop loss retention has only been penetrated once in the past 13 years. Unlike health claims, workers' compensation costs are somewhat controlled by the state laws and fee guidelines. The excellent management of the district's workers' compensation claims and a pro-active return to work program helps keep lost time expenses to a minimum, further insulating the fund from large claims.

The premium for 2007/2008 will be approximately $84,782, a savings from last year of approximately $17,981. This coverage is secured on an estimate of expected payroll and audited at fiscal year-end, based on actual payroll records. In the event the estimated premium exceeds the actual payroll, the insurance company refunds the district at the end of the year-end audit. Excess coverage is an administrative expense to the workers' compensation fund. This item supports the district's goal of data based decision making.

Recommendation:

Approve Arthur J. Gallagher Risk Management Services, Inc., to place excess workers' compensation coverage for the district's workers' compensation plan through Safety National Insurance Company, effective July 1, 2007, with renewals negotiated for two additional years.

Business Impact:

Ensures protection against per occurrence claims in excess of $350,000 in the workers' compensation self-insurance plan.

Summary:

Appendix:

Return to Meeting Agenda