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HomeMy WebLinkAboutTR-45-84 4 a CORPORATION OF THE TOWN OF NEWCASTLE TREASURY DEPARTMENT K. CAMPBELL, C.A., TREASURER 40 TEMPERANCE STREET TEL.(416) 623-3379 BOWMANVILLE, ONTARIO L1C 3A6 REPORT TO THE GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING OF JUNE 4th 1984 REPORT NO. : TR-45-84 SUBJECT: 1984 - 85 INSURANCE COVERAGE RECOMMENDATION: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council: 1. That this Report and 1984 Risk Management Report perpared by the Frank Cowan Company Limited be received; and 2. That the following actions regarding the Recommendations 1 through 6 on pages 13,14 and 15 of the 1984 Risk Management Report be approved: (a) Recommendation No. 1 That Committee defer the consideration of the purchase of an excess layer of liability insurance to cover possible catastrophic loss in the amount of $5,000,000 until the 1985-86 premium year; and (b) Recommendation No. 2 That Committee not consider the inclusion of earthquake and flood damage insurance in its current property insurance; and L RECOMMENDATION: (continued) 2. (c) Recommendation No. 3 That Committee approve the review of the electronic data processing insurance coverage already in place and that the coverage of the Town owned hardware be updated, as necessary, at an annual cost to be determined; and (d) Recommendation No. 4 That Committee not consider Gross Revenue - Business Interruption Insurance for its arena operations, at this time; and (e) Recommendation No. 5 That Committee approve the inclusion of the insurance relating to Properties under the Tax Registration Program at an annual cost of $350; and (f) Recommendation No. 6 That Committee consider the renewal of this revised form of Legal Expense insurance for Conflict of Interest for the Mayor and Members of Council, at an annual cost of $50 per member; and (g) That Committee consider the renewal of this revised form of Legal Expense Insurance for Conflict of Interest for the appointed Committees of Council being the (i) Committee of Adjustment (ii) Property Standards Committee (iii) Newcastle Community Services Planning Committee (iv) Local Architectural Conservation Advisory Committee, at an annual cost of $50 per member; and RECOMMENDATION: (continued) 2. (h) That Committee not consider the renewal of this revised form of Legal Expense Insurance for Conflict of Interest for the appointed Boards of the Town of Newcastle (ie Community Halls, Arenas, Parks, etc). 3. That Committee approve the renewal of the present insurance coverage for the 1984 - 85 premium year with the Frank Cowan Company Limited at an annual premium of $89,949 subject to any amendments in that coverage which may occur during the 1984 - 85 premium year. BACKGROUND AND COMMENT: Members of Council and staff have received copies of the 1984 Risk Management Report which provides an analysis and inventory of the Town's current insurance coverage and proposed changes. Mr. Dave Reed of Frank Cowan Company Limited has been present at a staff meeting to discuss the 1984 Risk Management Report and will be in attendance at the G.P.A. meeting June 4th 1984 to discuss that report with Members of Council. Any questions relating to the policy coverages could be addressed to Mr. Reed, at that time. Recommendation 1 This excess liability insurance coverage is not considered, by staff, to be necessary at this time. To date there have been no awards in Canada in excess of the $5 million in coverage which the Town presently carries. There have, however, been some claims made in excess of $5 million upon which judgements have not yet been made. y - 30) BACKGROUND AND COMMENT: (continued) Recommendation 1 (continued) This excess coverage should be considered in future years when the progress of the above mentioned claims is more clearly known. Recommendation 2 The coverage of the Town's buildings for earthquakes and floods at an annual premium cost of $1,452 is not considered necessary, in the opinion of staff. For the main part the Town's facilities are not located in areas subject to those types of catastrophies. Recommendation 3 The Town currently has insurance coverage on its owned electronic data processing equipment. The replacement value of such hardware may require updating and this can be done and the Frank Cowan Company so advised. The service bureau with which the Town is "on line" has the responsibility and the only capability to safeguard the live data and microfiched data at its installation in Toronto. Recommendation 4 The Business Interruption Insurance has been considered by the Town staff in the past and still staff feel that the annual premium cost does not warrant the inclusion of this coverage in the Town's insurance program. With the four arena facilities, currently in place, staff feel that should a significant interruption of service at one facility occur, that the community needs could be reasonably accomodated at the other locations for the duration of any such incident. BACKGROUND AND COMMENT: (continued) Recommendation 5 The insurance coverage related to those properties taken over through the tax registration program is recommended for acceptance as it improves the existing coverage of the Town. This coverage will provide the Town with liability coverage for any properties which it may have under the tax registration program for the 365 day period. Under the tax registration program there may be5from time to time, a further requirement to carry property damage insurance, as well, in order to protect the Town's interest in the property. Example: If the taxes outstanding exceed the value of land, and the buildings were to be destroyed by fire, then the Town would have no way to recover the taxes in full from the value of the land, itself. This additional coverage for property damage is considered on a case to case basis, as required. Recommendation 6 The recommendations of staff regarding the Legal Expense Insurance for Conflict of Interest have been separated into three parts, so Committee may consider the need for the coverage, separately, in each instance. There has been a separate circulation to the members of Council, which discusses in more detail the changes in this coverage and its applicability to various bodies. The potential exposure to this risk by members of Council and by the members of the Committee of Adjustment and the Property Standards Committee is considered by staff to be the highest. Other Committee members and local board members are not considered, in general, to have the same level of risk of exposure to conflicts of interest and therefore might reasonably be excluded from this coverage. The Town presently has a limited form of this coverage for its members of Council and local board members, but the change in the coverage offered will increase the premium cost to $50 per person. BACKGROUND AND COMMENT: (continued) Recommendation 6 (continued) Presently members of Council premiums are $50 per person with the local boards covered at a cost of $5.00 per person. This limited coverage will not be available in the 1984 - 85 premium year. In the 1984 - 85 premium only the broadened form of Legal Expense Insurance for Conflict of Interest will be available. This coverage would pay legal expenses when a person is found guilty of conflict of interest, on any council, board, commission or committee, but was deemed to have made a bona fide error or to have inadvertently made such an error. This would apply in all cases as long as a person is allowed to continue as a member of council, board, commission or committee. Mr. Reed of the Frank Cowan Company Limited can more fully discuss this matter with Committee at the June 4th 1984 General Purpose and Administration Committee Meeting. In general, staff find that the Town's basic insurance coverage is adequate and that the Town has been well served by the Frank Cowan Company Limited. Respectfully submitted, ro Kathryn A. Campbell, C.A. , B,Comm. , Treasurer. *gf