Colorado Special Districts Property and Liability Pool

Since 1998

Presented by McGriff, Seibels & Williams

Pool Administration TeamJoe DePaepeJoyce Howell

Jenniffer J. Alvarado

1-888-313-7322

Who Are We? Employees of McGriff, Seibels & Williams hired in 1998 by CSD

Board of Directors to administer the Pool’s insurance programs

We work with the Pool Board of Directors, appointed by the SDA, to offer insurance for P/L and WC lines of coverage

Work closely with SDA to ensure we meet the mission of the Pool which is to provide Colorado special districts a viable and stable alternative at competitive rates and with exceptional customer service, claim handling and loss prevention assistance

Responsible for administrative oversight of: coverage forms, underwriting, policy services, loss prevention, reinsurance placements, member advocacy, claims, financial, actuarial, etc.

Donna Alengi of SDA is the Pool Liaison for day-to-day contact

What You Need to Know About Your Coverage

Does your district have the proper Workers’ Compensation, Property, Liability, and Board Member/manager insurance coverage?

The Colorado Special Districts Property and Liability

Pool will share our expertise on finding you the proper

coverage balance for your insurance needs.

Overview Public Liability Employment Practices Public Officials Liability Employee Benefit

Liability Auto Liability and

Physical Damage Fiduciary Liability Pollution Liability Cyber Liability/Data

Compromise Workers’ Compensation

& Employer’s Liability Excess Liability

Property Equipment

Breakdown Employee

Dishonesty/Crime Identity Theft

Recovery Claim Adjusting Loss Prevention Rates and Rating Innovation Support Services Financial Stability One Stop Shopping

Pool’s Public Liability CoverageWe do things a little differently. The Pool coversdamages the district owes for:

A: Wrongful acts which could lie in tort pursuant to the Colorado Governmental Immunity ActB: Wrongful acts pursuant to state and federal Civil Rights lawsC: Any other jurisdiction claim for bodily injury,

property damage, or personal injury brought within the U.S.D: Employment Practices LiabilityE: Vehicle Liability

All in one coverage document with few exclusions

Liability Claims Covered

Claims that could lie in Tort-Negligence:

Bodily Injury, Personal Injury and Property Damage

Wrongful Acts for Damages Professional Liability for Damages Errors and Omissions for Damages Premises and Operations Completed Operations Course and Scope of Duties of Employees,

Volunteers, Management, and Board of Directors

Subject to Exclusions in the coverage form

Liability Claims DefendedNegligence where Third Party damages are sought:

Failure to maintain your premises Pedestrian steps in sprinkler valve box - $20,000 Sidewalks, parking lots, etc. (slip and falls)

Damage district does during operations Forklift driver damages auto in parking lot Digging up utility line on private property

Negligent Installation Frozen water line broke - $265,000 Water discharge at fire hydrant - $137,500

Wrongful Acts for damages Negligent participation in bond issuance -

$Unknown District emplyee makes decision, or gives

information that causes a loss of income

Employment Practices Liability

Discrimination of Any Protected

Class

Harassment of Any Protected

Class

Hiring/Wrongful Termination

Age, Race

Emotional Distress Gender

Denied Job or Promotion Religion

Disciplining Unwelcome Conduct(verbal, physical, visual)Reputation - Defamation

Disabilities – ADA 0f 1990

Sexual Orientation

50% of Any Wrongful ActFederal Laws are outside of State Tort

Caps

EPLI Claims We Have Seen Younger worker alleged inappropriate touching/sexual

assault by manager – cost to defend? Employee fired for falsifying merchandise order

alleging retaliation - $600,000 Former employee filed suit for wrongful termination,

defamation, hostile work environment, and unlawful retaliation - $225,000

Random Drug Test: employee failed test, was terminated and filed a wrongful termination suit - $$

Derogatory or improper use of an employee’s name over 10 years claims hostile work environment - $4mm

District Manager files lawsuit in Federal Court for wrongful termination, gender & age discrimination, and breach of contract – $900,000 discrimination, $425,000 beach of contract & $375,000 wages = $1,700,000

Public Officials LiabilityAny Wrongful Act:

Coverage is provided for an entity’s wrongful acts, or errors and omissions of public officials within the course and scope of duties

Coverage for the district includes all employees, volunteers, officers and directors

Defense costs will not erode the Districts limit of liability

$25,000 for defense cost for injunctive relief claims seeking monetary damages

Subject to Exclusions in the coverage form

Public Officials Liability Claims Defended

Failure to maintain treatment plant - $125,000 Constituent Discrimination based on ADA - $65,000 Suit alleges fraud/purchase bonds - $33,500 Donor made large contribution to a District for a

specific purpose; funds applied elsewhere - court ordered repayment

District identified a glitch in computerized tax roll system where tax rate for charges were improperly calculating causing new retroactive assessments; district sued by residents for negligence and breach of duty

Board sued for failure to supervise manager alleging breach of duty of care and misrepresentation of financial information

Injunctive relief claim to cease and desist from all activities - $25,000 defense costs

Employee Benefit Liability (EBL)

EBL protects your district against claims by employees,former employees, or prospective employees resultingfrom negligent acts or omissions in the administrationof:

Life, accident or health insurance plans Profit sharing plans/employee stock plans Workers’ compensation/unemployment insurance Social security Disability plans Sick leave

EBL Claims Defended A part-time employee moves to full-time where

all full-time employees receive benefits The employee has heart attack but was

never enrolled in the benefits program

Employee marries and/or has a child Employee’s paperwork was not handled/filed

in a timely manner

Employee termination Employer neglects to provide terminated

employee with appropriate COBRA information resulting in ex-employee losing benefits

Auto Liability and Damage District Owned Vehicles used in course and scope of

duties: All employee’s & volunteers operating a district vehicle

must be able to show proof of a valid driver’s license Use of a district vehicle must be related to the particular

job responsibility, and apply to employee’s, volunteers and Board Members

District must have a Personal Use Agreement Use by family members then covered

Non-Owned Auto – employee’s, volunteers and Board Member’s used in course and scope of duties:

Covers only district liability; driver’s coverage is primary

$2,500 deductible reimbursement for physical damage

Hired or Borrowed – rental vehicle liability and physical damage

Subject to Exclusions in the coverage form

Auto Claims Covered District insured vehicle hits other party causing

property damage to other vehicle and bodily injury to driver and passenger - $$

District scheduled vehicle runs into third party building causing property damage - $26,000

Board Member rents vehicle while on business; damage to rental is covered when caused by the negligence of the Board Member - $35,000

District vehicle or car rental is stolen or vandalized - $20,000

District Driver hits pedestrian, bicyclist or livestock - $$

Other party hits district’s vehicle causing BI & physical damage with no insurance.

Subject to Exclusions in the coverage form

Fiduciary Liability $200,000

If you are a trustee, officer or manager who makes decisions on your district’s 401(k) plan or other ERISA qualified employee benefits plans, you need fiduciary liability coverage as ERISA assigns personal liability

Covers damages and legal fees from lawsuits against pension benefit administrators accused of not acting in accordance with the Pension Reform Act of 1974

Do not confuse this with ERISA coverage under Crime or EBL coverage under General Liability

Subject to Exclusions in the coverage form

Fiduciary Claims Covered Trustees invests the employee’s pension fund

in junk bonds or derivatives that do not perform well; the employer is sued for poor judgment because it costs employee’s a secure retirement

After well publicized issues develop with your Plan Administrator the Trustees fail to make a change in the administrator of trust; when performance falls below industry average and principal funds begin to erode retired employees sue current and past trustees

Failure to give suffient choices Prudence in selection of program

Pollution Liability $1,000,000

Pollution liability protects districts for sudden and accidental

Newly Discovered Events: First Party onsite clean-up costs for bodily injury, property

damage, and remediation costs from pollution at, on, under, or migrating from your property for new events newly discovered

Losses resulting from pollution originating from someone else's property; it is the insurer's responsibility to recover costs from the party that caused the incident

Third Party clean-up costs for bodily injury, property damage and remediation costs from new pollution newly discovered at, on, under, or migrating; our policy pays for damages you may cause to other properties

Natural resources damage Coverage is available for aboveground and underground

storage tanks but must have a separate application

Subject to Exclusions in the coverage form

Pollution Claims CoveredPolicy covers cost to clean up pollutants when:

On-site clean-up of your property from new pollution conditions

District caused pollutant spill on other party’s property

Unknown party dumps hazardous materials on your land/easement

Contamination of site soils and water resulting from fire/explosion

Soil and ground contamination due to newly discovered accidents from storage, or disposal of solvents or chemicals used in district operations

Improper storage and disposal of golf cart batteries

Cyber Liability/Data Compromise $200,000 Data Compromise

Pays expenses to mitigate theft resulting in breach of personal data held by the District and state laws requiring notification of a security breach to affected individuals

Web Site Publishing Liability Pay for wrongful acts associated with content

posted to District’s website, include actual or alleged errors, misstatements/misleading statements, defamation, or violation of a person’s right of privacy

Cyber Extortion Threats Reimbursement of extortion threat expenses and

ransom payments incurred as a direct result of a cyber extortion threat

Subject to Exclusions in the coverage form

Cyber Liability/Data Compromise $200K Continued… Replacement or Restoration of Electronic Data

Cost to re-create or restore electronic data to pre-loss conditions due to a computer virus, malicious code or denial of service attack Web Site Publishing Liability

Network Security Breach Liability Pays for wrongful acts associated with actual or

alleged neglect, breach of duty or omission in maintaining the security of your computer system

The neglect, breach of duty or omission must allow a third party to gain unauthorized access to the District’s computer system resulting in publication of other’s personal information or inadvertently transmission of a computer virus or malicious code

Subject to Exclusions in the coverage form

Cyber Liability Claims Covered

Website failure to prevent unauthorized access to computer system resulted in sensitive data stolen (SS#, address)

District’s computer was breached by external hacker and over 1000 personal and credit card information stolen

Sending an email that crashes another party’s network BI - lost income from a computer attack Network security – damages arising from a computer attack on

your network Internet liability – damages when your internet service

provider goes down or is hacked Web content liability – damages and defense costs arising as a

result of claims of liable, copyright or trademark infringement, or defamation; to website by a hacker or disgruntled district employee

Damages and defense costs arising from electronic communications such as breach of confidence or infringement of right of privacy

Failure to prevent unauthorized access to district’s computer system by a third party or unauthorized district employee

Workers’ Compensation Act

The workers’ compensation and occupational disease law are referred to as “Exclusive Remedy”

Serves as a mutual agreement between the employer and employee barring injured workers from filing liability lawsuit against their employer or a negligent co-employee for on the job injuries

Reasoning behind this is worker’s compensation is a no-fault system, and in return for receiving the automatic (but limited) no-fault benefits under the Act, you give up the right to sue your employer or co-workers regardless of whether employer or employee is to blame for the injury

Act provides Part 1 and Part 2 coverage

Part I: Workers’ Compensation

Workers’ Comp law provides for both medical and partialwage replacement benefits, for bodily injury by accidentor disease - including death - as a result of employment.

The purpose of Workers’ Compensation: Promote injured employee’s return to pre-injury condition Prompt/reasonable payment of benefits for injured workers

(TTD at 66 2/3 Avg. Wk Wage; Med Expenses; Lump Sums) Provide a single remedy in place of suits, if necessary Avoid litigation, attorney fees, lengthy trials Encourage employer interest in safety and risk management Promote analysis of losses to avoid future injury and human

suffering

Part I: WC Claims Covered

Auto accident: as driver or occupant when employee is in the course or scope of employment and/or assigned job duties

Occupational injuries: muscular, slip/trip/fall, struck by objects, hearing loss, etc.

Disease as a result of asbestos, silicosis, and certain other toxic chemicals

Fatality when in course and scope of duty, subject to employer’s polices and procedures, as well as individual circumstance of specific incident

It is important to note that all WC claims are evaluated on their own merits; what may apply to one employee, may be denied for another but could include the following:

Part II: Employer’s Liability Tort Liability Coverage against an employer for

accidents to employees, as distinguished from liability imposed by a workers' compensation law

The three causes of action listed on the next page only apply if they are the direct consequence of the bodily injury to an injured employee while in the course and scope of employment

Generally permitted by law, are sums the insured must legally pay toward potential employee suits against the immediate employer

Part II: EL Suits CoveredEmployer’s Liability covers suits against an employer. Third-Party Over suits, where the insured is liable to

a third party for claims against that third party by an injured employee of the insured (suit against other at-fault party, not the employer or co-worker)

Consortium suits are consequential bodily injury to certain immediate family members of the injured employee - also known as, Care and Loss of Services (husband and wife)

Dual Capacity suit, when an employer is responsible for an employees injury - not as the immediate employer - but in a separate capacity, such as the manufacturer of a product that caused the employee’s injury (manufacturer defect)

Excess LiabilityPurpose of Excess Liability Coverage is to provide

higherliability limits:

Unlimited exposure for district to Federal Civil Rights and discrimination laws

Other States do not have tort limitations Courts continue to overturn tort limitations (in

other states) Employer’s Liability (WC) not limited by CO

Governmental Immunity Act Provides coverage for excess limits over general,

public officials, employment practices, automobile and employer’s liability (via Pool WC policy)

Provides additional liability coverage when basic $1,000,000 limits are exhausted

Subject to Exclusions in the coverage form

Excess Limits Claims Covered An employee with a bad driving record was allowed to

continue operating a district vehicle on company business when he struck a bus full of school children from a wealthy neighborhood; courts determined CGIA is inadequate compensation where the district’s poor management is a contributing factor. After 5 years, all parties agreed to $5,000,000 settlement

Intoxicated employee driving to another state on business killed a father and two children who were on the sidewalk; this was not EE’s first DUI

Injured 18-year old EE claims district did not properly train or provide adequate protective clothing and now cannot care for himself; sued district outside of WC for $10,000,000 for loss of lifestyle and lifetime support

Workplace humiliation of a minority EE over a 10-year period results in $6,000,000 damage claim

Property CoverageDirect Physical Loss or Damage, subject to

exclusions,including limited coverage for:

Earthquake up to $2,000,000 Flood up to $2,000,000 Automatic Coverage which have lower sublimits:

Demolition and Increased Cost of Construction

Valuable Papers Cargo Transit Electronic Data Processing Equipment Employee Owned Tools Newly Acquired Property Errors & Omissions in reporting Plants, Trees, Shrubs Debris Removal Property in Course of Construction

Property Claims Covered Tornado, Windstorm, Hail, Fire, Lightning & Snow Wind damage to roof of ice arena - $232,000 Vandals set fire to covered property - $100,000 Truck ran into district’s office building - $41,000 Theft of scheduled equipment - $30,000 Loss of Revenue from Covered Loss - $350,000 Cost of rebuilding to current codes - $250,000 Tear down undamaged portion of building -

$300,000 Contaminated Debris from a covered loss -

$400,00

Equipment Breakdown (EB)Objects insured (picks up some exclusions on Property

Form): Property that generates, transmits, or utilizes

energy including electronic communication and data processing equipment, which under normal use operates under vacuum or pressure, other than the weight of its contents

Automatic coverage sublimits Business Income/Extra Expense Service Interruption Expediting Expense Hazardous Substance Newly Acquired Locations Demolition and Increased Cost of Construction Cold Testing

EB Claims Covered Air intake fan broke apart in the ventilation

system at district’s office; fan, motor and assembly had to be replaced - $130,000

Air conditioning, electrical and lighting equipment damaged at two district offices when underground feeder cable arced and burned out - $56,266

A Park & Recreation district lost power when wiring overheated and shorted out - damaging cables, electrical distribution equipment, and pool - $85,435

Volunteer fire department lost power when an electrical service line shorted out - $34,500 repairs plus $1,313 business income = $35,788 total

EB Claims Covered Continued…

Air Pressure vessel explodes taking out key equipment

Stress facture in flywheel causes it to come apart, damaging other equipment, and shutting down all processes

A water pump can malfunction causing the steam boiler to explode

Loss of revenue from a covered loss Off premise service interruption causes loss

or damage

Employee Dishonesty, CrimeIncluding Faithful Performance Meets Statutory “Faithfull Performance”

Requirement $5,000 each up to $500,000, as Board

determines Employee Theft Forgery or Alteration Theft of Monies & Securities Electronic Funds Transfer Computer Fraud

ERISA Bond Compliance

Crime Claims Covered District employee takes money, securities, or other

property resulting from theft, whether identified or not Forgery or Alteration when a forged check is presented

to the district for payment Theft of money and securities at any district location,

or at your bank premises is covered whether loss is by destruction, theft, or other unidentified “mysterious disappearance”

Funds Transfer Fraud protects district for the loss of money and securities as a result of a fraudulent instruction that causes your bank to remove funds from your account

Money Orders and Counterfeit Paper Currency when your district accepts counterfeit money orders or currency in exchange for services the District provides

ID Recovery Reimbursement Automatic employee benefit for all full-time

employees and Board Members with Crime Coverage

$25,000 Reimbursement for defined expenses associated with your personal ID Recovery

Case Management Services Expenses - does not reduce the limit available for expense Reimbursement

$5,000 Lost Wages and Elder/Childcare at $250/day up to $5,000 total

$1,000 Mental Health Counseling Recovery Assistance (Toll Free: 1-800-945-4617) Does not cover funds lost (financial institution)

Subject to Exclusions in coverage form

ID Recovery Claims Covered

Home computer is hacked via email; it contained your tax return which was filed electronically leaving your personal information vulnerable

Employee or Board Member incurs legal fees to answer civil judgments and defense of criminal charges when someone else used stolen id to secure credit and/or make fraudulent purchases - $3,000

Through a phishing scheme, you give out proprietary information

Theft of lost/stolen wallet causes you to take time off work to reconstruct important identity related documents (drivers license, credit cards, etc) - $5,000

Personal laptop does not have encrypted security; it is stolen and contains your personal financial information

Employee’s credit rating damaged and employee required Mental Health Counseling due to stressful situation - $1,000

Typical Exclusions in Most Coverage Forms

1. Intentional Acts2. Contractual

Obligations3. Aircraft4. War5. Watercraft-Excess of

30’6. Airports7. Damages other than

monetary8. Dishonest

Fraudulent Criminal behavior

9. ERISA

10. Date-Related Computer Failure

11. Nuclear Energy12. Lead13. Employee Benefit Plans11. Relief under Rule 106

Civil Procedure12. Penalties, Punitive

Damages13. Eminent Domain,

Condemnation, Inverse Condemnation

Claims Review Team Claim issues are reviewed by a focused peer group

of special district members and not by a committee of insurance company accountants or lawyers

Claims handled by a Local Government claims expert committed to working and communicating directly with members for the best possible claims outcome

Claim reserves are analyzed annually for appropriateness, and prior to the formulation of experience modifications which affect contributions

Claim reviews based on member need or desire

Loss Prevention Services Loss Prevention is handled by County Technical

Services, Inc. (CTSI), a Denver based Local Government Specialist

Loss Prevention services are provided at no additional cost to member districts

Free unlimited access to the CTSI Training Library, including video and written material for checkout

Web-based Online training available 24/7/365 8 Regional Educational Workshops throughout

Colorado On-site loss prevention/safety evaluations for

purposes of sharing best practices developed by members

Competitive Rates Rates based on Colorado district performance of peer

groups, no other states or national trending used Economies of scale leveraged to our member’s benefit

with below average cost of administration Individual district contribution modifiers are equitable

and reward best performers based on past experience Management credits given for achieving best practices

going forward In the past, the insurance industry has seen significant

rate increases and major reductions in coverage; however, the Pool during that time provided stability and consistency for its members with an average 3% annual rate reduction over the past several years, while continuing to expand coverage and services for member districts

Multi Program Discounts provide additional credits when members participate in both the Property & Liability (7%) and Workers’ Compensation (1%) programs

Support Services 24/7 Online University available to all members Knowledgeable professionals provide prompt and

reliable customer service As of January 1, 2010 and 2011, 3% average

annual Safety and Loss Prevention (S&LP) Grant Program will apply after one year of Pool membership. This is a 50% reimbursement for products or services districts acquire to prevent losses

Cyber Liability web resource in eRisk Hub™, developed to walk members through a crisis and to provide them with the tools necessary to identify issues preemptively

HR Made Simple, a human resources web portal available to Pool members at reduced pricing

InnovationInformation available on the Pool’s website at

www.csdpool.com:

Pool Member Coverage Handbook and Reference Manual

Online application Details and online registration for upcoming workshops

and seminars, free monthly courses Links to other helpful websites, including those of other

special districts and companies that provide services to our special district members

Access to the Pool’s 24/7 Online University offering a wide range of training topics and solutions for Health, Safety, Driver Education, Human Capital Management, Employment Practices, Discrimination, Office Productivity, and many more titles

Safety and Loss Prevention Grant Program allocates funds to members after one year of Pool membership

Innovation Continued…Information available on the Pool’s website at

www.csdpool.com: Quarterly newsletter published by the Pool; topics vary

seasonally (i.e. tornadoes, winter driving, flood information, working outside in hot weather etc.)

Board and Supervisor Scholarship Fund for training of first time attendees to SDA Annual Conference or Workshops

Coverages added at no additional cost to plug potential budget holes for issues like Pollution, Cyber Liability, and Fiduciary Liability

Maintenance Warranty Program saves participating Sanitation Districts 25% off their Liability contributions

Free Pre-Loss Legal Services Bond coverage for district’s negligence in issuance of

Bonds Auto deductible reimbursement ($2,500) for employee use

of personal auto within the course and scope of job.

Financially Sound The Pool has been in operation since 1988,

consistently demonstrating financial stability and fiscally conservative growth

Annual Financial Audits shared with Pool membership in July

Actuarial Report performed annually to ensure that the Pool’s funding maintains fiscally responsible levels

Audits and Actuarial Reports provided annually to the Colorado Department of Insurance (DOI)

Financial ratios for the Pool are available, along with an Insurance Industry Comparison exhibit

Annual Pool audits ensure compliance with Colorado DOI statutory accounting requirements

One Stop Shopping Members have fewer coverage contacts for all

lines of typical coverage One renewal date for all lines of coverage The same Claims Administrator handles claims

for all coverage lines All Pool Master Coverage Documents, Claims,

Contact Information, Educational Updates, News, and Risk Management publications are available in one convenient place at www.csdpool.com

Summary We are an extension of the Special District

Association (SDA), partnering to bring special districts a host of insurance and educational opportunities

This is YOUR Pool and we’re here to work with special districts either directly or with your broker

We have tremendous Coverage Forms that are broad and inclusive

We extend many other risk management services to Pool members

Financials are sound Knowledgeable, attentive staff who are excited at

the opportunity to serve you

CSD POOL

THANK YOU!

Please come visit us at our boothacross from the SDA Registration table.

This presentation is a good faith effort on behalf of McGriff to educate Pool members andprospects on our understanding of coverages and services offered on behalf of the CSD

Pool.This is not an offer or explanation of the actual coverage afforded as critical terms,

conditionsand exclusions have been omitted due to time constraints needed to cover the subjects

infull. Please consult the Pool Master Coverage Documents for any and all coverage terms.