Warren County is staying with Safety National Causality Cooperation for its excess insurance needs.
The county’s Budget and Finance Committee and Financial Management Committee reviewed two proposals.
According to Bob Shupe of Employee Security Planning, an insurance consulting company for the county, up for renewal is the excess policy required by state law on the self-insured fund for workman’s compensation insurance.
“To be in compliance with state law, you are required to carry an excess policy that would pay a particular claim or occurrence went over a certain deductible or what they call a retention,” said Shupe. “Currently, and for the last three or four years at least, retention has been at $500,000 per occurrence.”
In giving an example, Shupe says about a year ago two of the county’s Highway Department employees were injured when they were traveling Highway 55 and were struck from behind by a tractor trailer.
“Because the driver of the tractor trailer was uninsured, the county is having to assume responsibility on the employees’ injuries up to the $500,000,” said Shupe. “As of today, that is right at $455,000. Because the claim is still open, it could breach that retention. If it does, the current excess carrier, which is Safety National Causality Cooperation, would assume all the payments beyond that. That’s how the coverage works.”
Since the self-insured fund for workman’s compensation began in 1999, the county has not had to use its excess insurance coverage.
For the last 15 years or so, the county has been with Safety National Causality Cooperation. Last year, the county paid $81,348 for its excess policy coverage. Up for renewal on Aug. 1, the company has decreased the premium to $79,636.
However, the county received an additional proposal from Midwest Employers Company.
“The county has been using Safety National as its excess workman’s compensation carrier," said Shupe. "The safe insurance fund for worker’s compensation has been in force since 1999 and for all but about two or three of those years, the county has been with Safety National. Prior to that, the county was with Midwest Employers Causality Company. They have come in with a proposal with a retention of $600,000. The annual premium would be $66,770.”
If the county went with Midwest, it would have to increase its self-insured fund retention to $600,000. While Safety National will assume payments once the county has paid out $500,000, Midwest would not assume any payments until the county has paid out $600,000.
“If you go up $600,000 you are creating another $100,000 risk that you don’t currently have,” said Shupe. “Beside the retention amount, there would be no difference in coverage between the two companies and they are both A+ rated companies.”
Committee members voted to remain with Safety National Causality Cooperation. The measure will be sent to the full Warren County Commission for its consideration.