January 2, 2014 9:29:51 AM
Nathan Gregory - [email protected]
The city of Columbus is going to pay $55,000 more to insure itself in 2014 than it did in 2013.
The overall 2014 premium is $315,621 -- the highest amount in six years and an almost 18-percent increase over 2013's premium, which was $260,038.
Columbus councilmen renewed the city's insurance plan with Chicago-based CNA Financial during a meeting Monday. The new plan includes coverage for city property and equipment as well as general, vehicle, law enforcement and employment practice liabilities.
Hopkins Insurance agent and owner Eddie Mauck sought quotes from several insurers and reviewed the premiums the city will pay CNA for each of those coverage categories.
Premiums slid gradually each year from $297,774 in 2008 to $241,058 in 2012. Mauck said they were decreasing due to a soft market, or a market that has more potential sellers than buyers. That trend recently changed, necessitating the increase.
"Every year I try to get four or five quotes," Mauck said. "We got a couple of declines primarily because we had two or four claims in law enforcement the last two years and two claims on public officials."
Property insurance covers all city buildings and the contents inside them. Mauck said the value was $15,125,000. The city will pay a premium of $24,916 and a $2,500 deductible for each claim.
Equipment coverage includes machinery mainly used by public works crews for maintenance projects, such as backhoes and bulldozers. Their cumulative value is nearly $1.25 million. To cover the cost in case any equipment is damaged or stolen, the city will pay a $7,526 premium and $1,000 deductible for each claim.
Liability and physical damage coverage for the city's 181 vehicles (including city official cars, police cars and fire trucks) has a $134,358 premium and $1,000 deductible. The policy provides the city a $1 million liability limit, but Mississippi's tort cap is $500,000, meaning the city would never be liable for more than that amount on a single claim stemming from an accident within state boundaries.
"We have a $1 million limit for liability on there because it's potentially possible that you could be out of state on city business," Mauck said. "If (a city employee is) in a city car, the city's liability is primary. If you're in your own car, the city's would be excess over yours. If you were on city business in your own car driving in Alabama and you had an accident, the city's insurance company is still going to protect the city. It would pay in excess of what your own personal liability insurance was."
Tort law also applies to general liability insurance, for which the city will pay a $53,829 premium. One of the most common liabilities this category addresses is complaints from motorists who receive damage to their cars as the result of potholes in city roads. The tort law spares the city of liability if there's no prior knowledge by a city official of a hazard that could cause vehicle damage or physical injury, Mauck said.
"If you were to pay those type claims, you would have 100 claims a day coming in," he told the council. "If there was documentation that you guys had prior knowledge that a drain hole was open, then the insurance company would have an obligation to pay that claim. Municipalities and counties are not liable just because they own something and it creates damage to some part of the public if they didn't know about it."
General liability also covers herbicide and pesticide spraying, city-owned cemetery liability and employee benefits liability, for which there is a $1,000 deductible per claim.
The city will pay a $68,765 premium for law enforcement liability insurance, which protects the city and police department. That premium covers any legal costs that may be incurred from lawsuits. The cost of a deductible doubled from $5,000 in recent years to $10,000.
Rounding out the premiums are public official management liability and employee practices liability, which Mauck wrapped into one category. That premium is $26,227.
Past yearly insurance premiums for Columbus
Nathan Gregory covers city and county government for The Dispatch.