Agenda Item No. V. B. 1. c.

Washburn University Board of Regents



SUBJECT: Renewal of Insurance Policies



BACKGROUND:



For many years, the renewal date for the majority of the University's insurance policies was January 1, which is the busiest time of year for commercial insurance underwriters. This frequently meant quotations were received too late for there to be adequate time to consider options. As a result, in December 2000 when approval was requested for renewal of insurance coverage, we discussed changing the renewal date from January 1 to October 1. After consulting with Topeka Insurers and others, it was decided to make that change. Consequently, in September 2001 the Board of Regents approved the cancellation of the University's insurance policies and rewriting the policies with and October 1 effective date. This change will give insurance companies more time to respond to the University's requests for coverage.





DESCRIPTION:



Prior to the October 2002 renewal, the University's insurance agent reviewed the market and submitted applications to companies expressing an interest in writing coverage for Washburn. The previous review conducted prior to the January 2001 renewal, resulted in Washburn being able to consolidate some of its coverages. United Educators Insurance Risk Retention Group's proposal continues to be judged to be more advantageous for the University both in coverage and premium. Coverage for the general liability policy was moved to United Educators in 2000, who had written Washburn's Educators Legal Liability coverage for several years.



United Educators, rated A: Excellent by A.M. Best, provides broad coverage created specifically for educational institutions. United Educators is a mutual insurance company owned by over 1,000 policyholder-members. United has become the standard of excellence for broad, tailored coverage and unmatched risk management and claims services for colleges and universities.



It is advantageous to have the general liability and educators legal liability written by the same insuror in the event of a claim since there is no question of which company is responsible.



Attached is a schedule of proposed October 1 insurance coverages and premiums compared with last year's coverages and premiums. All the quotations are firm, except for the Worker's Compensation coverage. We are still working with the agent to determine if there is a way to reduce the increase reflected on the attached schedule. The amount shown on the schedule is the maximum amount Washburn might have to pay for coverage.





FINANCIAL IMPLICATIONS:



10-1-01/02

10-1-02/03

General Fund
Property

$86,028

$122,688

Auto Physical Damage

$4,255

$3,976

Boiler

$9,520

$1,424

Fine Arts

$6,923

$7,655

Account # 01-63163 (Property Insurance) Total

$106,726

$135,743

Account # 01-75082 (Workers Compensation)

$237,356

$262,459

Account # 01-40064 (KTWU Insurance)

$54,934

$40,229

Total General Fund

$399,016

$448,231

Tort Claim Fund
Auto Liability

$10,279

$22,723

General Liability

$51,030

$69,039

Umbrella

$26,500

$33,494

Aircraft Liability

$6,800

$10,250

Educators Legal Liability

$30,740

$39,112

Total Tort Claim Fund

$125,349

$174,618

Total

$524,365

$622,849





RECOMMENDATION:



President Farley recommends approval to purchase the policies as shown on the attached schedule.



_________________ ___________________________

Date Jerry B. Farley, President





SCHEDULE OF PROPOSED INSURANCE COVERAGE FOR OCTOBER 2002 RENEWAL
LAST YEAR RENEWAL
LAST YEAR RENEWAL PREMIUMS PREMIUMS
Package Policy - Great American
Property $156,690,697 $157,495,222 $86,028 $122,688
Deductible $25,000 Same
Business Income including Extra Expense $1,000,000 Same
Earthquake - Per Occurrence/Aggregate $25,000,000 Same
Flood $5,000,000 Same
Musical Instrments - $1,000 Deductible $1,109,849 $1,204,454
Miscellaneous Equipment - $1,000 Deductible $83,500 $105,000
Automobile
Limits of Liability $14,534 $26,499
Bodily Injury & Property Damage Liability - Each Accident $1,000,000 Same
Medical Payments $5,000 Same
Uninsured Motorist $1,000,000 Same
Comprehensive/Collision Per Schedule Per Schedule
Garagekeepers Legal Liability $100,000 Same
Deductible $500/$500 $1,000/$1,000
General Liability - United Educators
Bodily Injury/Property Damage Combined Single Limit $1,000,000/3,000,000 Same $51,030 $69,039
Excess Indemnity Policy (Umbrella)-United Educators
Excess of Base Limits of General $5,000,000 Same $26,500 $33,494
Non-Owned Aircraft Liability
Limit of Liability $5,000,000 Same $6,800 $10,250
Boiler Machinery Policy - Hartford Steam Boiler
Limits Per Accident $10,250,000 $50,000,000 $9,520 $11,424
Expediting Expense Limit $10,000 $25,000
Water Damage/Ammonia Contamination $25,000 Same
Deductible $1,000 Same
Business Income/Extra Expense $250,000 $1,000,000
Workers Compensation - Fireman's Fund
Employers Liability $1,000,000 Same
Payroll Amounts - subject to audit
College: Professional Employees, Teachers & Clerical $27,252,600 $28,100,000
College: All Other Employees $2,866,000 $2,952,000
Radio or TV Broadcasting: All Employees $964,000 $993,000
Aircraft Operations $3,500 $3,500
Total $31,086,100 $32,048,500 $237,356 $262,459
Fine Arts Floater - St. Paul Insurance
Limit Per Schedule $3,643,851 $3,866,175 $6,923 $7,655
Deductible $1,000 $5,000
Educator Legal
Limits of Liability $1,000,000/1,000,000 Same $30,740 $39,112
Deductible $75,000 Per Claim Same
KTWU Tower Policy - Fireman's Fund
Buildings and Contents $417,200 Same $54,934 $40,229
Towers, Transmitting Equipment, and Studio Equipment $3,957,000 $3,386,000
Deductible $25,000 Same
TOTAL $524,365 $622,849
10-1-01/02 10-1-02/03
General Fund
Property $86,028 $122,688
Auto Physical Damage $4,255 $3,976
Boiler $9,520 $1,424
Fire Arts $6,923 $7,655
Account # 01-63163 (Property Insurance) Total $106,726 $135,743
Account # 01-75082 (Workers Compensation) $237,356 $262,459
Account # 01-40064 (KTWU Insurance) $54,934 $40,229
Total General Fund $399,016 $448,231
Tort Claim Fund
Auto Liability $10,279 $22,723
General Liability $51,030 $69,039
Umbrella $26,500 $33,494
Aircraft Liability $6,800 $10,250
Educators Legal Liability $30,740 $39,112
Total Tort Claim Fund $125,349 $174,618
Total $524,365 $622,849

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