Colorado Special Districts
Property and Liability Pool
Since 1998
Presented by McGriff, Seibels & Williams
Pool Administration Team
Joe DePaepe
Joyce Howell
Jenniffer J. Alvarado
1-888-313-7322
Who Are We?
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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
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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
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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 Coverage
We do things a little differently. The Pool covers
damages the district owes for:
A: Wrongful acts which could lie in tort pursuant to the
Colorado Governmental Immunity Act
B: Wrongful acts pursuant to state and federal Civil
Rights laws
C: Any other jurisdiction claim for bodily injury, property
damage, or personal injury brought within the U.S.
D: Employment Practices Liability
E: Vehicle Liability
All in one coverage document with few exclusions
Liability Claims Covered
Claims that could lie in Tort-Negligence:
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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 Defended
Negligence 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
50% of Any Wrongful Act
Federal Laws are outside of State Tort Caps
Discrimination
of Any Protected Class
Harassment
of Any Protected Class
Hiring/Wrongful Termination Age, Race
Emotional Distress
Gender
Denied Job or Promotion
Religion
Disciplining
Reputation - Defamation
Unwelcome Conduct
(verbal, physical, visual)
Disabilities – ADA 0f 1990
Sexual Orientation
EPLI Claims We Have Seen
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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 Liability
Any Wrongful Act:
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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
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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 resulting
from negligent acts or omissions in the administration
of:
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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
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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
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District Owned Vehicles used in course and scope of duties:
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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
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Subject to Exclusions in the coverage form
Auto Claims Covered
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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
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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
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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:
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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 Covered
Policy covers cost to clean up pollutants when:
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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
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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…
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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
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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 coemployee for on the job injuries
 Reasoning behind this is worker’s compensation is a nofault 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 partial
wage replacement benefits, for bodily injury by accident
or disease - including death - as a result of employment.
The purpose of Workers’ Compensation:
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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
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:
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Auto accident: as driver or occupant when employee is in the
course or scope of employment and/or assigned job duties
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Occupational injuries: muscular, slip/trip/fall, struck by
objects, hearing loss, etc.
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Disease as a result of asbestos, silicosis, and certain other
toxic chemicals
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Fatality when in course and scope of duty, subject to
employer’s polices and procedures, as well as individual
circumstance of specific incident
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 Covered
Employer’s Liability covers suits against an employer.
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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 atfault 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 Liability
Purpose of Excess Liability Coverage is to provide higher
liability 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
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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 Coverage
Direct 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
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Tornado, Windstorm, Hail, Fire, Lightning & Snow
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Wind damage to roof of ice arena - $232,000
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Vandals set fire to covered property - $100,000
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Truck ran into district’s office building - $41,000
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Theft of scheduled equipment - $30,000
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Loss of Revenue from Covered Loss - $350,000
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Cost of rebuilding to current codes - $250,000
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Tear down undamaged portion of building - $300,000
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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
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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…
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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, Crime
Including Faithful Performance
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Meets Statutory “Faithfull Performance” Requirement
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$5,000 each up to $500,000, as Board determines
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Employee Theft
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Forgery or Alteration
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Theft of Monies & Securities
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Electronic Funds Transfer
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Computer Fraud
ERISA Bond Compliance
Crime Claims Covered
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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
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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
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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.
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7.
8.
9.
Intentional Acts
Contractual Obligations
Aircraft
War
Watercraft-Excess of
30’
Airports
Damages other than
monetary
Dishonest Fraudulent
Criminal behavior
ERISA
10.
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12.
13.
11.
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Date-Related Computer
Failure
Nuclear Energy
Lead
Employee Benefit Plans
Relief under Rule 106 Civil
Procedure
Penalties, Punitive
Damages
Eminent Domain,
Condemnation, Inverse
Condemnation
Claims Review Team
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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
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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
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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
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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
Innovation
Information 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
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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
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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
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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 booth
across from the SDA Registration table.
This presentation is a good faith effort on behalf of McGriff to educate Pool members and
prospects 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, conditions
and exclusions have been omitted due to time constraints needed to cover the subjects in
full. Please consult the Pool Master Coverage Documents for any and all coverage terms.