4.2. SR 09-26-1994 - Laserfiche WebLink

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Insurance Renewal September 20, 1994 Page 3 . in order to inform both the City and Utility employees of the appropriate steps to take if a work related injury occurs. This premium notice also does not include a deductible credit. Page 4 of the handout shows that if the City has a deductible per occurrence of $250, the City would save $2,226. The deductible per occurrence increases all the way up to $10,000 where the City's savings would be $18,918. On Page 5 you will see some three year trend information showing the savings or loss that the City would have incurred over the last three years based on various deductible amounts. The City has not qualified for the deductible program in previous years; however, as you can see, savings would result from any of the various deductible programs. A $250 deductible would have saved $1,843 over the last three years. A $500 deductible would have saved $6,480. Most work comp claims that we have had recently have been at $250 or less. Therefore, going to the $500 deductible does not cost the City any additional amount on most of its claims. If the City Council approves a deductible, the City's deductibles would come from the City's self insurance fund. In discussing this item with the agent, it was felt that a $500 deductible may be appropriate for the 1994-95 contract year. After that time, the City may wish to increase the deductible depending upon the costs incurred. . Retrospective rating is another option available. This handout shows that the minimum premium for the 1994-95 contract year would be $58,868 and the maximum premium $144,667. This program cannot be taken in conjunction with a deductible program. The actual premium for each year is based on the claims incurred. Also, if an employee is injured and incurs costs five years after the injury due to a reoccurrence, those ongoing claims become part of that year's loss. Therefore, it is somewhat risky to participate in this program. However, as you can see on Page 5, the premiums would have been substantially less had the City elected the retrospective rating program. We did not select that program based on the City's experience modification. Since the modification was over 1, it was felt that the possibility of large claims or ongoing claims was too great in order to jeopardize the premiums. However, now that our modification factor is below .90, it is appropriate to explore this option. The final four pages of the handout give more information on both the retrospective rating program and the deductible program. SUMMARY . As I stated earlier, these policies cover not only the City but also the Elk River Municipal Utilities. In that regard, a letter has been sent to Bill Birrenkott regarding the renewal and the decisions the Council will be making which will also affect the Utilities. Dan Greene will be available Monday to discuss these items in detail. If you have any questions prior to