HomeMy WebLinkAboutTR-32-82 CORPORATION OF THE TOWN OF NEWCASTLE
40 TEMPERANCE STREET
BOWMANVILLE, ONTARIO
L1C3A6 TELEPHONE 623-3379
REPORT TO THE GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING OF
JUNE 28, 1982.
TR-32-82
SUBJECT: 1982-83 INSURANCE COVERAGE
RECOMMENDATION:
It is respectfully recommended that:
The following actions be taken on the recommendations
contained within the 1982 Risk Management Report as
prepared by Frank Cowan Company Limited Insurance.
1 . Legal expense insurance at an annual insurance cost
h`�,v—..,r. ' Rai
of $25.00 per number of Council be considered and
discussed by the Committee; and the legal expense
insurance for board members not be considered for
the 1982-83 premium year; and
2: Under the crime insurance coverage that the commercial
blanket bond be increased to $250,000.00 with an
additional annual premium cost of $471 .00; and
3. The excess liability insurance on Non-Owned
Automobile, Owned Automobile and Municipal Liability
not be increased to $10,000,000.00; and
4. The errors and omissions liability insurance limit be
increased to $5,000,000.00 at an additional annual
premium cost of $622.00; and
5. & 6. The various department; review the appended lists of
replacement values, and once completed the Treasurer
inform Frank Cowan Company Limited of any necessary
amendments, with the resultant changes in the premiums
to become part of the annual insurance premium cost;
and � `�
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TR-32-82
7. The engineering - boilers and machinery insurance
coverage limit per accident be increased to $1 ,000,000.00
at an additional annual premium cost of $75.00; and
The loss of income protection insurance as a result of
damage to the engineering plant of $225.00 per day for
90 (ninety) days subject to the limit of $20,250.00 at
all locations not be considered for inclusion in the
Town's insurance coverage for the 1982-83 premium year;
and
8. The insurance policies in force as of June 30, 1982 be
renewed for the 1982-83 premium year, at an annual premium
cost of $91 ,026.00 without amendment, until such time as
Committee and Council have given its final approval to any
ammendments to the existing insurance coverages.
BACKGROUND & COMMENTS:
In 1981 the Town's insurance coverage was extensively
reviewed by staff and the Town's insurers. The attached
1982 Risk Management Report is therefore much more concise
than the report provided for 1981 . Members of staff have
met with our insurers and offer the following comments in
support of our recommendations with regard to the recommend-
ations contained within the 1982 Risk Management Report.
1 . The legal expense insurance for elected and appointed officials
of the Town has only recently been made available (May 4, 1982) .
It is to provide protection for legal fees and disbursements
should a public official be involved in litigation under the
Municipal Conflict of Interest Act where the outcome of the
proceedings is other than guilty.
This insurance can not be made available to Members of Council
or individual members of other boards on an individual basis.
The cost to cover the Members of Council with this insurance .._
would be $25.00 per person annually. Such boards whi.ch might
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TR-32-82
be deemed to have exposure in this area could be insured
at an annual cost of under $5.00 per board member . The
comments from our insurers indicate that many municipal
councils are taking steps to include this coverage in
their insurance program.
2. The crime insurance bonding limit should be increased to
$250,000.00 to reflect an update in the Town's insurance
coverage. The bond provides protection for the municipality
against defalcations etc. in all locations.
3. We have recommended against increasing the excess liability
coverage to $10,000,000.00 at this time. Although there have
been writs put in place in excess of $5,000,000.00; to date
there have been no judgements made by the courts in excess
of $5,000,000.00.
This increase in the liability limit should be reconsidered
in the 1982-83 premium year, as the circumstances concerning
judgements may well have changed. Also, the Town of Newcastle's
exposure in this area is rather larger than other municipalities
of similiar size because of our geographical area, number of
recreational parks and facilities and associated maintenance
equipment.
4. In order to bring our liability limits in all coverages to the
same level ($5,000,000.00) , it is recommended that the errors
and omissions liability limit be increased from $1 ,000,000.00
to $5,000,000.00. This insurance is to provide protection for
the municipality in the case where actions are taken by another
party based on erroneous advice from Council or Town staff,
which results in a loss to that other party.
5. & 6. The review of the replacement value of the physical assets of the
Town is being undertaken at this time by staff and will be reported
to our insurers in due course.
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TR-32-82
7. The liability limit per accident involving the boilers
and associated machinery should be increased to $1 ,000,000.00
from $500,000.00. This insurance coverage is to protect the
Town against damages resulting from boiler failures due to
means other than wear and tear,or a boiler explosion which
does not result in a fire. If a fire ensues from a boiler
explosion, this coverage would replace the boiler and the
property "all risks" coverage would replace the assets lost
due to fire. It is felt that the additional coverage on the
boilers would more appropriately indemnify the Town against
such losses.
In conclusion, it is generally felt that the overall insurance
program for the Town is adequate, but the coverages must be
reviewed and updated annually to compensate for changes in
risk exposure and to allow for extended coverage as required.
Respectfully submitted,
cvi Cc taw
Kathry A. Campbell , C.A. , B.Com. ,
Treasu r
e C:slg
17 June 82
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