Washburn University Board of Regents
SUBJECT: Renewal of Insurance Policies Effective January 1, 1999
Each year at the December meeting, the Board of Regents is requested to approve the University's annual insurance renewals. These renewals include coverage primarily for property and liability exposure through eleven policies that are listed on Attachment 1. Ten of the eleven policies renew January 1 for a one-year period. The eleventh policy to provide comprehensive blanket fidelity bond coverage was issued for a three-year period in November 12, 1997 and we just entered the second year of the contract period on November 12, 1998. This policy is Item 10 in the Attachment 1and is included to reflect the annual premium payment. As reported to the Board in an August 24, 1998 letter from the Vice President for Administration and Treasurer, the University has worked with the Independent Insurance Agents of Topeka (IIAT) for risk management advice in the property and liability areas. All policies will be purchased through The Topeka Insurers, LLC, a wholly owned affiliate of IIAT that was established to sell insurance to public entities.
Two changes are recommended for 1999. Currently, the Worker's Compensation policy provides for a $1,000 deductible per injury. Because deductible payments have been between $9,000 and $12,000, and because eliminating the deductible adds only $10,333 to the premium, and because recent changes in regulations negate the value of the deductible as it relates to the experience modification, the deductible is eliminated.
The second change involves the Student/Faculty Professional Liability insurance. We are increasing the coverage from the current $100,000/$300,000 limitation to $1,000,000/$3,000,000. This change is primarily because the agencies where our students are placed are requesting that our coverage be at the higher limit. Currently the policy is with St. Paul and is on "a claims made" basis. The recommended policy is with Maginnis and Associates and is on "an occurrence" basis. Maginnis offers coverage at the $1mil/$3mil level at a lower annual premium rate. However, since the Maginnis coverage is on "an occurrence" basis, it is necessary to purchase separate prior acts coverage. Even though this one time premium to purchase separate prior acts coverage is necessary, there is a long term financial advantage. For example, the two year cost of the Maginnis policy ($70,024) is $19,740 less than the same policy with St. Paul. Attachment 2 describes this change in more detail and provides a comparison of the costs.
Expenditure of $172,354 from General Fund accounts budgeted for this purpose. This compares to the FY98 expenditure of $156,105.
Expenditure of approximately $118,000 for continuing coverages (excluding the Non-owned aircraft liability coverage expected to cost $3,500 to $5,000) and $37,738 for one-time prior acts coverage from the accounts in the Tort Liability Fund budgeted for this purpose. This compares to the FY98 expenditure of $136,077.
Attachment 1, page 6, provides a summary of these expenditures with a comparison to the FY98 premiums.
President Farley recommends Board of Regents approval to order the insurance policies outlined on the attached summary sheet.
(date) Jerry B. Farley, President