Manatee County Government Administrative Center Commission Chambers, First Floor 9:00 a.m. - September 24, 2013
REVISED September 24, 2013 - Regular Meeting
Agenda Item #17

Purchase of Excess Workers Compensation and Liability Insurance


Contact and/or Presenter Information

Raymond Carter, Risk Manager County Attorney's Office

Extension 3782

Action Requested

Motion to approve the purchase of excess workers compensation and liability insurance in an amount not to exceed $461,421.50 (inclusive of all State/Federal mandated fees) which is Option 1 of the attached proposal from First Florida Insurance Brokers, and to approve the County Attorney or his designee to execute all required documents.

Enabling/Regulating Authority

Ordinance 08-49

Background Discussion

The Board of County Commissioners of Manatee County purchases excess workers' compensation and liability insurance to protect the County from catastrophic financial loss. Pursuant to Florida Statute 768.28 and Chapter 440 Florida Statutes, the Risk Management Division administers the risk management fund 505 to finance its Property, Casualty and Workers’ Compensation programs. The Property insurance program is renewed each year on June 1st and is not included in this agenda item.

To ensure sufficient coverage limits, the County purchases excess coverage, necessary to protect against large losses; to provide higher limits required by contract; or to cover a claims bill pursuant to Florida Statute 768.28.  The current program expires on October 1, 2013, and contains the following provisions: The liability total loss limit per expiring program is $5 million per occurrence and $10 million aggregate, with a $500,000 deductible. The workers compensation portion of the expiring program has a $600,000 deductible. The county self administers the auto and general liability claims, and Commercial Risk Management administers workers compensation claims.

The current carrier, Star Insurance Company, notified the County on July 5, 2013, that they would not renew the expiring policy. Research through the AM Best website and other sources indicates that Star’s financial outlook has been downgraded to negative. Additionally, Star Insurance, who has been underwriting many public entities’ excess policies, decided to not write new polices effective immediately. This places tremendous upward pressure on pricing because of their very competitive rates in the market place, and creates a very short window of opportunity for many October 1, 2013 renewals. The workers compensation portion of the program is driving premium increases because of “presumption” claims. Presumption laws assume that first responders like Sheriff’s deputies and firefighters claims related to heart and lung are “presumed” to be caused by employment.

The Risk Management Division has performed an extensive programmatic review of the risk financing program to ensure that it would be comprehensive, competitive, and underwritten by financially sound carriers. Staff has examined loss runs for workers' compensation claims, and determined that the County has not had a workers' compensation claim breach its $600,000 deductible within the last five years. Staff recommends increasing the workers compensation deductible to $750,000 to save valuable premium dollars and apply these savings to fund reserves. Staff is also aware that the County is currently bare (does not maintain) public officials, or employment practices, excess coverage, this recommendation will provide this coverage, and thereby provide a more well balanced and comprehensive excess liability insurance program.

Key enhancements of this recommendation are outlined below:

Public Officials Liability & Employment Practices Liability Coverage: This coverage offers protection for claims of wrongful acts by the County or its representatives. It provides coverage for catastrophic claims that allege wrongful acts by the County or its representatives; employment practices violations and civil rights violations. This would include wrongful termination, discrimination including; racial, gender based, or age based. In addition, this coverage would respond to claims involving sexual abuse allegations, subject to terms and conditions of the policy. These claims generally are not afforded the benefit of a statutory damages cap, which is currently $200,000 per claimant and $300,000 per occurrence, as provided in Florida Statute 768.28.

Clash Coverage: In the instance of multiple claims arising out of the same occurrence (incident), only one deductible would apply. For example if a county vehicle is involved in a serious accident, where the county was at fault, that resulted in injuries or death to our employee(s), and/or the other driver, or occupants, in the second vehicle, only one deductible would apply.

Superior Credit Rating: The Risk Management Division has evaluated over a dozen different program options from many different carriers. The insurance carrier determined to have the best financial stability through its reserves, or AM Best rating, was with Brit Re (Lloyds of London) A XV, and Safety National A XII. Safety National has been a stable partner of public entities for over 30 years. This program structure is a significant improvement over the current carrier that has been downgraded to b++ and an overall negative outlook.

Option 1 will have excess liability limits of $2 million per occurrence and $4 million aggregate for General Liability and Auto Liability claims, and provide the public officials/employment practices coverage, along with the clash coverage, and increase our retention on workers' compensation claims to $750,000.



Expiring Premium

Percentage Change

Deductible (SIR) WC

AL/GL Limits (Occurrence/Aggregate)

Public Officials/Employment Practice Limits






$5 million/$10 million


Renewal per Expiring





$5 million/$10 million


Option 1





$2 million/$4 million

$1 million/$2 million

Option 2





$5 million/$10 million


Option 3





$2 million/$4 million


Staff recommends a Motion to approve the purchase of excess workers' compensation and liability insurance in an amount not to exceed $461,421.50 (inclusive of all State/Federal mandated fees) which is Option 1 of the attached proposal from First Florida Insurance Brokers and to approve the County Attorney or his designee execute all required documents. All coverages are subject to the terms, conditions, endorsements, and exclusions of the policy. Limits and Self Insured Retentions as proposed are in line with those in place for like sized counties in the State of Florida.

County Attorney Review
Other (Requires explanation in field below)

Explanation of Other

The Risk Management Division has discussed this item with the County Attorney Mr. Palmer.

Reviewing Attorney

Instructions to Board Records

Please return a stamped copy of this Agenda Memorandum certifying its approval by the Board of County Commissioners to Raymond Carter (raymond.carter@mymanatee.org) – County Attorney’s Office.

Cost and Funds Source Account Number and Name
$461,421.50 From 5050001300(50%), 5050001400(25%), 5050001500(25%) Risk Management Fund

Amount and Frequency of Recurring Costs
$461,421.50 One time payment

Attachment:  MCBOCC- XS Liability Proposal Revised 09 16 2013.pdf