Risk Management and Insurance For Cities
Presented by:
Robert E. Jester
July 18, 2013
Risk Management
What is it?
By definition Risk Management is a discipline that
deals with management of risk.
But what is risk?
“Risk is an event which results in financial loss to
the City.”
2
Why is Risk Management Important?
When operating a City or Utility there can be consequences:
1. City of Lawler fire – $240,000
•
Fire destroys maintenance building
2. Large Workers’ Compensation Claim – $442,833
•
Firefighter directing traffic on Interstate 80
3. City of Stockton Dishonesty Loss
•
$65,000 missing after State Audit
4. Public Officials Liability
•
City sued for discrimination due to improper
termination.
3
Principles of Risk Management
Avoid
Eliminate the risk
e.g. Fireworks at football games
Reduce/Control
Actively try to moderate risk
e.g. Safety Committee to reduce accident or
injury
Accept/Retain
Make a decision to accept risk
e.g. Take higher deductible on property
insurance
Transfer
Move the risk elsewhere
e.g. Buy insurance
4
Section I
Property
1. Examples of Property Risk
1.
2.
3.
4.
5.
6.
7.
8.
9.
Fire destroyed administration building in Hull
Tornado destroys City Hall at Fruitland
Hail damage to roof
Massive wind damage from a Derecho 2011
Truck hits building
Sewer backs up into office
Fire destroys large compactor at landfill
Electrical damage to water plant
Collapse of roof due to weight of snow
5
1. Handling Property Risk
1. Avoid the Risk – This is always the cheapest option
for any type risk but unfortunately, it doesn’t work
well when it comes to city buildings.
2. Reduce the Risk – Risk can be reduced in property
risk management by various methods:
a. Building designs
b. Use of materials less subject to exterior
damage
c. Reduce the number and size of windows
d. Pay attention to building location such as
avoiding areas prone to flooding
6
3. Transfer by Contract – It’s possible to change the
property risk in the city environment by
transferring ownership of buildings to a third
party and then lease them back.
4. Retain Risk – Retain risk by assuming the largest
deductible level the city can easily handle.
5. Purchase Insurance Coverage – For property
insurance this will be the cheapest and best
method of handling risk due to the potential
magnitude of property loss.
7
2. Types of Property to be Insured
1. Buildings, including additions
2. Contents
3. Data Processing Equipment and Software
4. Copiers, telephones, fax machines and other
office equipment
5. Outdoor property including playground
equipment and other park items
6. Vehicles of all types
8
3. Property Insurance Issues
1. Building Ordinance and Codes
2. Boiler and Machinery
3. Extra Expense Insurance
4. Basis of Loss
5. Construction Equipment, such as graders and
backhoes as well as street cleaners.
6. Property off-premises and in-transit
7. Underground fiber optic
8. Interruption of utility services
9. Property under construction
9
Building Ordinance Coverage
What are examples of cost?
―
―
―
―
ADA issues for handicapped access
Exterior window too small
Some hallways too narrow
Some interior finish does not meet
current fire codes
― Eliminate frame additions
― Bathrooms not handicap accessible
10
Electronic
Data Processing Equipment
Standard ISO Property form
No coverage
Different kinds of Risk involved
Mechanical Breakdown
Electrical Injury
Accidental Damage
11
Additional Coverage – Computer Equipment
1. The Coverage Form to which this endorsement applies
is extended to insure against loss or damage caused
by or resulting from an “accident” to “computer
equipment.”
2. The following is added to the DEFINITIONS:
a. “Computer equipment” means Covered
Property that is electronic computer or other
data processing equipment, including “media”
and peripherals used in conjunction with such
equipment.
b. “Media” means all forms of electronic,
magnetic and optical tapes and discs for use in
any electronic computer or electronic date
processing equipment.
12
Off Premises and
In-Transit Coverage
Standard ISO Property Form
Limited coverage
City Property Insurance
The City needs to look at limit of insurance and
off-premises/in-transit deductible
Limit range
$1,000 to $500,000
Deductible range
$250 to $5,000
13
Section II
Liability Risks for Cities
Automobile related
(automobile insurance)
Bodily Injury & Property Damage
Non-Auto Risks
(general liability insurance)
Public Officials Liability
Errors & Omissions
Professional Liability
14
Liability
1.
Address Subject of “Tort Liability” – a civil wrong that
results in injury to persons or property.
1. Examples of Liability Risks
a)
b)
c)
d)
e)
f)
Claimant received blow to the head by a golf ball
Applicant for a job claims discrimination
Volunteer falls down stairs
Child gets hurt in City Park
Two teenagers drown at City pool
Claimant sledding down hill at City Park and hits a concrete
barrier
g) Law suit is filed alleging false arrest by police officer
h) Employee driving snow plow hit a parked car
15
2.
Handling Liability Risk
1. Avoid the Risk
Many liability risks can be avoided by simply not doing
certain activities such as allowing an unsupervised
party at a City swimming pool. One way to avoid
liability risk is through the use of hold harmless
clauses in leases and other agreements.
2. Reduce the Risk
Liability claims, both severity and frequency, can be
reduced in a variety of ways including the following
examples:
a. Continuous staff training in all areas.
b. Strong City policies with management’s
attention to insure they are being followed.
16
3. Reduce the Risk
(cont.)
c. Strict adherence to open meeting laws and other
statutory requirements.
d. Adequate supervision in all areas including law
enforcement and utility personnel.
e. Continuous improvement in staff training and
education requirements.
4. Transfer by Contract
Some liability risks can be transferred by contract
which is commonly done in construction agreements by
having outside independent contractors perform major
construction work with their employees.
17
5. Retain the Risk
Liability exposures or any kind of area are difficult to
retain by the district because of their volatility and
potential size.
6. Purchase Insurance Coverage
For this area, the purchase of a sound program of liability
insurance to cover bodily injury, property damage, and
other types of damages is essential and in the long run
the best option from a management standpoint.
18
3. Types of Liability to Be Insured
1. Premises and Operations
2. Personal Injury covering things such as liable, slander
and defamation of character
3. Management exposure including open meetings law
violations.
4. Sexual Abuse and Molestation
5. Contractual Liability
6. Utility exposures for electric, gas and water
7. Liability of both employees and volunteers
8. Liability risk for Council & Utility Board members as
well as various subsidiary Boards and Commissions
9. Professional Liability Risks
19
4.
Liability Insurance Issues
1. Limits of coverage per occurrence and aggregate
2. General Liability
3. Law Enforcement Liability
4. Public Officials Liability
5. Products Liability
6. Who is Covered?
7. Defense Costs
8. Umbrella Liability
9. Cyber Liability
10. Chapter 670 Iowa Code
11. Construction operations, including near Railroads
12. 28E Agreements
20
Contractors Insurance Requirements
A.
The contractor shall purchase and maintain such
insurance as will protect the Contractor from claims set
forth below which may arise out of or result from the
Contractor's operations under the contract, whether such
operations be by the Contractor or by any subcontractor
or by anyone directly or indirectly employed by any of
them, or by anyone for whose acts any of them may be
liable. The insurance to be maintained by the Contractor
shall be written as follows:
21
Contractor’s Insurance Requirements
Workers’ Compensation and Employers
Liability Insurance as prescribed by Iowa law or the
minimum limits shown below;
 Iowa Benefits Employers Liability
Bodily Injury by Accident
Bodily Injury by Disease
Bodily Injury by Disease
Statutory
$500,000 Each Accident
$500,000 Each Accident
$500,000 Each Employee
The Workers’ Compensation policy shall include a waiver of subrogation
clause in favor of the owner.
22
Contractor’s Insurance Requirements
Commercial General Liability Insurance combined single limits
shown below covering Bodily Injury, Property Damage and
Personal Injury:
General Aggregate Limit
Products-Completed Operations Aggregate Limit
Personal & Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (for any one fire)
Medical Damage Limit (any one person)
$2,000,000
$2,000,000
$1,000,000
$1,000,000
$ 100,000
$
5,000
This insurance must include the following features:
 Coverage for all premises and operations. The policy shall be endorsed to
provide the aggregate Per Project Endorsement.
 Personal and Advertising Injury
 Operations by independent contractors.
 Contractual Liability coverage
 Coverage for property damage underground or damage by explosion or
collapse (XCU).
23
Contractors Insurance Requirements
Automobile Liability Insurance, covering all owned, nonowned, hired and leased vehicles with a minimum combined single
limit for Bodily Injury and Property Damage of $1,000,000 per
accident. Insurance must include Contractual Liability.
Umbrella/Excess Liability Insurance, at Contractor’s option,
the limits specified may be satisfied with a combination of Primary
and Umbrella/Excess Insurance.
Additional Insured, The Contractor will include the City or Utility as
additional Insured on all policies except Workers’ Compensation as
respects all work performed
24
Contractors Insurance Requirements
Insurance Certificates, Each policy noted above shall be issued by an
insurance company authorized to write such insurance in the State of
Iowa and shall be reasonably acceptable to the City or Utility.
These
insurance policies shall not be cancelled without at least 30 days prior
written notice to the City or Utility. A properly executed Certificate of
Insurance showing evidence of these insurance requirements shall be
delivered to the City or Utility prior to the commencement of this lease.
25
Contractors Insurance Requirements
Government Immunity, The following clauses will be added to all
liability coverages:
The company and the insured expressly agree and state that the purchase of
this policy of insurance by the insured does not waive any of the
defenses of governmental immunity available to the insured under Iowa
Code Section 670.4 as it now exists and as it may be amended from
time to time.
The company and the insured further agree that this policy of insurance shall
cover only those claims not subject to the defense of governmental
immunity under Iowa Code Section 670.4 as it now exists and as it may
be amended from time to time.
Subrogation, To the extent that such insurance is in force and
collectible and to the extent permitted by law, the City or Utility and
Contractor each hereby releases and waives all right of recovery
against the other or anyone claiming through or under each of them
by way of subrogation or otherwise. The foregoing release and
waiver shall apply to damage to contractor’s equipment, tools and
other personal property as well as automobiles.
26
27
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policy of insurance by the inau:r·ed doeB not waive any of the d.ef·euses ot
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as it :now exists ,and as it may l:)e amended. from. time to time.
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should cover only those claims not sub ect
immunity Iowa Code Section 670.4 as it now exits and as it may be amended
from time to time.
29
Chapter 670.4 – Iowa Code
The liability imposed by section 670.2 shall have no application to any claim
enumerated in this section. As to any such claim, a municipality shall be liable
only to the extent liability may be imposed by the express statute dealing with
such claims and, in the absence of such express statute, the municipality shall
be immune from liability.
1.
Any claim by an employee of the municipality which is covered by the Iowa
workers' compensation law.
2.
Any claim in connection with the assessment or collection of taxes.
3.
Any claim based upon an act or omission of an officer or employee of the
municipality, exercising due care, in the execution of a statute, ordinance,
or regulation whether the statute, ordinance or regulation is valid, or based
upon the exercise or performance or the failure to exercise or perform a
discretionary function or duty on the part of the municipality or an officer or
employee of the municipality, whether or not the discretion is abused.
30
Chapter 670.4 – Iowa Code
4.
Any claim against a municipality as to which the municipality is immune from
liability by the provisions of any other statute or where the action based
upon such claim has been barred or abated by operation of statute or rule of
civil procedure.
5.
Any claim for punitive damages.
6.
Any claim for damages caused by a municipality's failure to discover a latent
defect in the course of an inspection.
31
Chapter 670.4 – Iowa Code
7.
Any claim based upon or arising out of a claim of negligent design or
specification, negligent adoption of design or specification, or negligent
construction or reconstruction of a highway, secondary road, or street as
defined in section 321.1,subsection 78, that was constructed or reconstructed
in accordance with a generally recognized engineering or safety standard,
criteria, or design theory in existence at the time of the construction or
reconstruction. A claim under this chapter shall not be allowed for failure to
upgrade, improve, or alter any aspect of an existing highway, secondary road,
or street, to new, changed, or altered design standards. In respect to
highways and roads, seal coating, asphalting, patching, resurfacing, ditching,
draining, repairing, graveling, rocking, to blade, or maintaining an existing
highway or road does not constitute reconstruction. This subsection shall not
apply to claims based upon gross negligence.
32
Chapter 670.4 – Iowa Code
8.
Any claim based upon or arising out of a claim of negligent design or
specification, negligent adoption of design or specification, or negligent
construction or reconstruction of a public improvement as defined in
section 384.37, subsection 19, or other public facility that was
constructed or reconstructed in accordance with a generally recognized
engineering or safety standard, criteria, or design theory in existence at
the time of the construction or reconstruction. A claim under this
chapter shall not be allowed for failure to upgrade, improve, or alter any
aspect of an existing public improvement or other public facility to new,
changed, or altered design standards. This subsection shall not apply
to claims based upon gross negligence. This subsection takes effect
July 1, 1984, and applies to all cases tried or retried on or after July 1,
1984.
33
Chapter 670.4 – Iowa Code
9.
Any claim based upon an act or omission by an officer or employee of the
municipality or the municipality's governing body, in the granting,
suspension, or revocation of a license or permit, where the damage was
caused by the person to whom the license or permit was issued, unless
the act of the officer or employee constitutes actual malice or a criminal
offense.
10. Any claim based upon an act or omission of an officer or employee of the
municipality, whether by issuance of permit, inspection, investigation, or
otherwise, and whether the statute, ordinance, or regulation is valid, if the
damage was caused by a third party, event, or property not under the
supervision or control of the municipality, unless the act or omission of the
officer or employee constitutes actual malice or a criminal offense.
34
Chapter 670.4 – Iowa Code
11. A claim based upon or arising out of an act or omission in connection with
an emergency response including but not limited to acts or omissions in
connection with emergency response communications services.
12. A claim relating to a swimming pool or spa as defined in section 135I.1 which
has been inspected by a municipality or the state in accordance with chapter
135I, or a swimming pool or spa inspection program which has been certified
by the state in accordance with that chapter, whether or not owned or
operated by a municipality, unless the claim is based upon an act or omission
of an officer or employee of the municipality and the act or
omission constitutes actual malice or a criminal offense.
35
Chapter 670.4 – Iowa Code
13. A claim based on an act or omission by a county or city pursuant to section
717.2A or chapter 717B relating to either of the following: Rescuing neglected
livestock or another animal by a law enforcement officer. Maintaining or
disposing of neglected livestock or another animal by a county or city.
14. Any claim based upon or arising out of a claim of negligent design or
specification, negligent adoption of design or specification, or negligent
construction or reconstruction of a public facility designed for purposes of
skateboarding, in-line skating, bicycling, unicycling, scootering, river rafting,
canoeing, or kayaking that was constructed or reconstructed, reasonably and
in good faith, in accordance with generally recognized engineering or safety
standards or design theories in existence at the time of the construction or
reconstruction.
36
Chapter 670.4 – Iowa Code
15.
Any claim based upon or arising out of an act or omission of an officer or
employee of the municipality or the municipality's governing body by a person
skateboarding, in-line skating, bicycling, unicycling, scootering, river rafting,
canoeing, or kayaking on public property when the person knew or reasonably
should have known that the skateboarding, in-line skating, bicycling, unicycling,
scootering, river rafting, canoeing, or kayaking created a substantial risk of injury to
the person and was voluntarily in the place of risk. The exemption from liability
contained in this subsection shall only apply to claims for injuries or damage
resulting from the risks inherent in the activities of skateboarding, in-line skating,
bicycling, unicycling, scootering, river rafting, canoeing, or kayaking. The remedy
against the municipality provided by section 670.2 shall hereafter be exclusive of
any other civil action or proceeding by reason of the same subject matter against
the officer, employee or agent whose act or omission gave rise to the claim, or the
officer's, employee's, or agent's estate. This section does not expand any existing
cause of action or create any new cause of action against a municipality.
37
28E AGREEMENTS
A.
What are they?
B.
What for?
C.
Legal Structures
D.
1.
Share expenses?
2.
Separate entity?
Insurance Implications
1.
General Liability
2.
Automobile Liability
3.
Errors and Omissions Liability
4.
Workers' Compensation - nonprofit corporations
5.
Fidelity
38
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Prej;lared by: Robert W. Braun 3151 BrockWay Rd. Box 810 Waterloo IA 50704 C319) 234-4471
JcZ8
AMENDED AND RESTATED 28E AGREEMENT
FOR FIRE AND AMBULANCE PROTECTION
THIS AGREEMENT is entered into by and between the City of LaPorte City, Iowa,
("LPC"), and the townships of Big Creek,·Spring Creek, Eagle, Poyner and Cedar, all located in
Black Hawk County, Iowa, and the townships ofBmce and Cedar located in Benton County, (all
collectively hereinafter referred to as the "Townships"), for the purpose of amending and restating
the 28E Agreement previously entered into by LPC and Townships, all as follows:
RECITALS
A.
LPC has established a Volunteer Fire/Rescue Department capable of providing fire
and ambulance protection outside of the corporate limits of LPC.
B.
The Townships are required by law to provide fire and ambulance protection for the
citizens within the township jurisdiction, and such fire and ambulance protection may
be provided by contract with LPC pursuant to a 28E Agreement.
C.
LPC and the Townships desire to enter into this agreement for the purpose of setting
forth their mutual responsibilities and obligations so that LPC may continue to
provide fire and ambulance protection as hereinafter set forth, and specifically to
revise the method used for determining the share paid by LPC and Townships for the
financing of the services provided.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1.
Duration. This agreement shall be perpetual until amended or terminated, as may be
hereinafter provided.
2.
No Separate Legal or Administrative Entity. This is intended to be an agreement
between independent and separate political subdivisions of the State oflowa. Therefore, no separate
legal or administrative entity is intended to be created by this agreement.
3.
Purpose. The purpose of this agreement is to set forth the way in which the
Townships will meet their obligation to provide fire and ambulance services to the citizens of the
Townships, and for the method of financing the equipment and services necessary to provide such
services.
39
4.
Financing. The Advisory Committee established in accord with Paragraph 6 hereof,
shall meet at least annually for the Pll!lJOSe of reviewing the budget prepared by the LaPorte City
Municipal Volunteer Fire/Rescue Department for the following fiscal year, beginning July l of each
year. The budget shall be prepared sufficiently in advance so that LPC and Townships can properly
levy taxes for the payment of the shared expenses. The amount to be paid by each of the parties
involved shall be determined as follows:
4.1
The costs for providing fire protection, rescue services, and the equipment necessary
to fulfill those obligations shall be determined in accord with the formula suggested
by the Iowa State University Extension Service entitled "Cost Sharing Formula for
Emergency Response Systems (Revised January, 2002)". The formula is stated as:
"Cost Share = o/o AV + % TC + % POP
3
Where:
AV =Assessed Value of Real Estate in area served
TC = Annual average of total ca11s to area served
POP = Population of area served"
4.2
The formula described in Section 4.1 for sharing of fire protection, rescue services,
and the equipment necessary to fulfill the obligation as applied to the budget for the
fiscal year beginning July 1, 2002, is set forth in the attached Exhibit A. For years
following fiscal year 2002, the data shall be collected and the formula applied
without further action by the Townships or LPC until this agreement is otherwise
amended.
4.3
The cost of ambulance protection and the equipment necessary to fulfill the
obligation for ambulance service shall be paid 1/2 by LPC and the other l/2 shared
by multiplying the valuation of the area of the Townships per thousand times .02.
For fiscal year 2002 beginning July 1, 2002, it is agreed that the valuation for the
townships, based on the area served shal1 be as set forth in Exhibit B. Unless
otherwise amended, the same percentage formula shall be applied for the sharing of
ambulance costs from year to year.
4.4
LPC and Townships shall each year levy property taxes sufficient to meet their
respective obligations, as determined in Sections 4.1 through 4.3 above.
4.5
If the proceeds received from the parties exceeds the costs outlined in the budget,
then the excess shall be applied to a fund for the purchase of a new fire truck and
other equipment as may be required by the Fire Department.
40
5.
Payment of Tax Receip13. The Townships Treasurers shall promptly transmit, upon
receipt, (before December 1st and June 1st each year) the tax monies received during the preceding
6 months resulting from the fire protection levy agreed upon to the City Clerk ofLPC for the proper
administration and payment of costs agreed upon pursuant to this agreement.
6.
Adyisoty Committee. An Advisory Committee is hereby created to be composed of
the persons who are the Chairmen of the Township Trustees, signature to this agreement. The
Advisory Committee shall provide advice and support to the LaPorte City Municipal Volunteer
Fire/Rescue Department and to LPC, and may make comment or objection concerning the operation
of the department, the acquisition of any equipment, and the amount of the annual tax levy necessary
to support the operation and debt retirement. It is tmderstood that LPC and the Volunteer
Fire/Rescue Department shall seriously consider the comments, objections and recommendations
of the Advisory Committee, however, the decision ofLPC shall be final with respect to any matters
relating to the operation of the department, including but not limited to acquisition of equipment,
buildings and annual budget requirements.
7.
Administration and Ownership ofProperty. LPC shall be the governing agency for
the purpose of providing the fire protection services contemplated by this agreement through its
Volunteer Fire/Rescue Department. LPC shall be the owner of all equipment, buildings and other
facilities necessary to provide the services contemplated. Annual budgets shall be prepared by the
Volunteer Fire/Rescue Department and submitted to the Advisory Committee for review. The
budget, as proposed by the Volunteer Fire Department, and the recommendations or objections of
the Advisory Committee, shall be submitted to LPC for action by its City Council, which action may
either be approval or modification, in the discretion of the City Council.
8.
Relij)onsjbilities ofLPC. It is the responsibility and obligation ofLPC, pursuant to
this agreement, to do the following:
8.1
LPC shall acquire, maintain and house all of the equipment necessary to provide fire
and ambulance protection contemplated under this agreement. The equipment
provided shall meet or exceed all of the standards set by applicable state or federal
regulatory agencies.
8.2
LPC shall provide a Volunteer Fire/Rescue Department, with all necessary staff and
equipment, on call, ready, able and equipped to respond to the calls originating from
Township residents. Calls shall be responded to as promptly as possible, in a fashion
consistent with the emergency nature of the call, and in a reasonable time within
which to respond.
The employees of the Volunteer Fire/Rescue Department shall be employees ofLPC
and not the Townships. LPC shall be responsible for liability insurance, workmens
41
!
G
compensation insurance, and any other insurance which may be necessary to hold the:
Townships harmless frm
agreement, except that' LPC does not waive any of its governmental immunity, as
provided in Section 364.16 of the Iowa Code, or of the qualified liability immunity
pursuant to the provisions of Section 613.17 of the Iowa Code.
8.4
Prepare an annuarbudget and request for tax levy to be submitted to the Townships
sufficiently in advance of the date such levies must be certified to the County Auditor
to allow appropriate action to be. taken.
9.
Method ofTellUination. This agreement may be partially or completely terminated
by mutual agreement of the parties. The agreement may also be terminated by LPC if any of the
Townships fail or refuse to pay or remit the tax funds required. In the event of termination for any
reason, all of the equipment and property acquired shall be and remain the property ofLPC unless
otherwise mutually agreed upon.
THIS AGREEMENT IS ENTERED INTO BY THE UNDERSIGNED ON Tiffi DATES
INDICATED BELOW:
City of LaPorte City, Iowa
By:
Rick Lubben, Mayor
'
By:
?ekr'<llA-Jult Petersen, Clerk
FeChief
Date
Date
BYfY\ l
Date
By
Steve Rosauei,:J\mbllillllCeCaptain
Date
Big Creek Township
lG
By: v
Dave Anton, Clerk
Date
::na:? ;/k
Richard Hutton, Clerk
t
Date
42
NEW SECf lO N.
29C.22 STATEWIDE MUTUAL AID COMPACT.
Th istatCI'\ ide mutual aid compact is entered into wit h all other cmmties, ci ties, and other
political subdivis1ons that enter into this compact in substa ntially the following form:
ARTICLE l
PURPOSE A D ALITHOR.ITIES
This compact is made and entered into by and between the participating counties, cities, and
political subd i visions which enact this compact. For the purposes of this agreement, the term
"participating governments" means counties, cities, towns hips, and other political
subdivisions of the state which have, through ordinance or resolution of the governing body,
acted to adopt this compact.
The purpose of this compact is to provide for mutual assistance between the participating
governments entering into this compact in managing any emergency or disaster that is
declared in accordance with a countywide comprehensive emergency operations plan or by
the governor, whether arising from natural disaster, technological hazard, man-made
disaster, community disorder, insurgency, terrorism, or enemy attack .
Titis compact shall also provide for mutual cooperation in emergency-related exercises,
testing, or other training activities using equipment and personnel simulating performance of
any aspect of the givi ng and receiving of aid by participating governments during
emergencies, such actions occu rring outside aetnaI declared emergency periods.
ARTICLE U
GENERAL IMPLEMF.l\TTATrON
Eacn participating government entering into this compact recogmzes many emergencies
transcend political jurisdictional boundaries and that intergovernmental coordination is
essential i n managing these and other emergencies under this compact. Each participating
government further recognizes that there will be emergencies which require immediate
access and present procedures to apply outside resources to make a prompt and effect.i ve
response to the emergency. This is because few, if any, indi vidual govenuuents have all the
resou rces they may need in all types of emergencies or the capability of delivering resources
to areas where emergencies exist.
The prompt, full, and effective use of resources of the participating governments, including
any resources on hand or available from any source, that are essential to the safety, ca re, and
welfare of the people in the event of any emergency or disaster declared by the governor or
any participating government, shall be the underlying princi ple on which all articles of this
compact sha ll he understood
On behalf of the participating govern ment in the compact, the legally designated official
who is assigned rcsponsibili t) for emergcnc) management \\ill be responsible for
formula tion of the appropriate intrastate mutua l aid plans and procedures necessary to
1mplemcnt this compact.
ARTI CLE Ul
PARTIC'IPATrNG GOVERNMENT RESPONSrBILITIES
I. It shnll be the responsibility of each participatin£ gm <:11uncHt to formu la te procedural
plans and progran1s for intrastate cooperation in the performance of the responsibilities
43
listed in th is article In formulating the pla ns, and in carrying them out, the participating
governments, insofar as practical, shall:
a.
b.
c.
d.
e.
f.
g.
Review individual hazards analyses and, lo the extent reasonabl y possible,
determine all those potential emergencies the participating governments might
jointly suffer, whether due to natural disaster, technological hazard, man-made
disaster, civil disorders, insurgency, terrorism. or enemy attack.
Review the participating governments' individual emergency plans and develop
a plan that will determine the mechanism for the i ntrastate management and
provision of assistance concerning any potential emergency.
Develop intrastate procedures to fill any identified gaps and to resolve any
identified inconsistencies or overlaps in existing or developed plans.
Assist in warning communities adjacent to or crossing t.h e participating
governments' boundaries.
Protect and ensu re uninterrupted delivery of services, medicines, water, food,
energy and fuel, search and rescue, and critical l ifeline eqUipment, services, and
resources, both human and material.
Inventory and set procedures for the inrrastate loan and delivery of human and
material resources, togetl1er with procedu res for reimbu rsement or forgiveness.
Provide, to the 1:cnt
ordinances that restrict the implementation of the above responsibilities.
2. 1l1e authorized representative of a participating government may request assistance of
another partici pating government by contacting the authorized representative of that
participating government. The provisions of this compact shall only appl y to requests for
assistance made by and to authorized representatives. Requests may be verbal or in
writing. If verbal, the request shall be confirmed in writing within thirty days of the
verbal request. Requests shnll provide all of the following:
a.
A description of the emergency service function for which assistance IS needed,
such as but not l irnite::d to fire:: services, law enforcement, emergency medical,
transportation., conunu nicatioos, public works and engineering, building
inspection., planning and infomtation assistance, mass care, resou rce support,
health and medical services, and search and rescue.
b. The amount and type of personnel, equipment, materials and supplies needed,
and a reasonable estimate of tlle length oftime d1at the personnel, equipment,
materials, and supplies will be needed.
c. The specific place and time for staging of the assisting participati ng
government's response and a po)nt of contact at that location.
3. The au thorized representative of a participating government may initiate a 1Cc1uest by
contacting the emergency management division oftlte state department of public
defense. When a request is received by the division, U1e division shal l directly contact
other participating governments to coordi nate the provi sion of mutual aid.
4. frequent consultation sha ll occur between officials who have been assigned emergenc)
management responsibi li ties and other appropriate representati ves of the pa rticipating
governmen ts wi th affected jurisdi ctions and state government, with free exchange of
mfonnation, plans, and resource records 1 elal i ne to emergency capa bilities.
44
AHTI CLE IV
LIMITATIONS
Any participating government requested to render mutual aid or conduct exercises and traini
ng for mutual a id shal l take the necessary action to prov ide and make available t he resources
covered by this compact in accordance with the terms of the compact. However, i t is
understood that the participa.Ling government renderi ng aid may wi thhold resources to the
extent necessary to provide reasooable protection for the part icipating government. Each
participat ing government shall afford to the emergency forces of any other pa rticipating
government, whi le operating within its jurisdictional l i mi ts under the t erms and conditions of
this compact, the same powers, except that of arrest unless specifically authorized by the
rcctiviug partici pating government, duties, rights, and privileges as are afforded forces of the
participating government in which t he emergency forces are performing emergency se1 vices.
Emergency forces sha ll con tinue uuder the command and control of their regular leaders, but
tl1e organizational units shall come under the operational control of the emergency services
autl10rities of the participating govemment receiving ao;;sistance. 1l1ese conditions may be
act ivated, as needed, mly subsequent to a declaration of a state of emergency or disaster by
the governor or by competent authority of the participating government that is to receive
assistance or commencement of exercises or training for mutual aid and shall continue so
long as the exercises or traini ng for mutual aid a re in progress, the state of emergency or
disaster remains in effect, or loaned resources remain m the receiv;ng jurisdiction, whichever
is longer.
·
ARTICLE V LICENSES
AND PERMITS
If a person holds a license, certificate, or other pennit issued by any participating
government to this compact evidencing the meet ing of q ualificat ions for professional,
mechanical, or oilier skills, and when the assistance is requested by another participating
government, the person shal I be deemed licensed, certified, or permitted by the partici pating
government requesting assistance to render aid involving the skill to meet a declared
emergency or disaster, su bject to the limitations and condirions as tht govtmor may
prescribe by executive order or otherwise.
ARTICLE VI
LIABILITY "Officers or employees of a participating government rendenng aid in another participating
government ju nsdictron pursuant to this compact shall be considered agents oftl1e
requesting participat ing government for tort liability and immunit}' purposes and a
partici pating government or its officers or employees renden ng aid i n another ju risdiction
pursuant to this compact shall not be liable on account of an y act or omission in good fai t h
on the part of ·the forces while so engagtd ur on account of tl1e maintenance or use of any
equipment or su pplies i n connection with the aid. Good furth in this a rtrcle shall not include
willful misconduct, gross negligence, or recklessness.
ARTICLE VII SUPPLEMENTARY
AGREEMENTS
Beca use it is probable that the pattem and detai l of the machinery for m u tual aid among two
or more participa ting governments may differ from that among other participa ting
govern men ts, this compact contains elements of a broad base common to all poli tica l
subdi visions, ru1d tl1is compact shall not preclude any poli tical subdi vision from enter i ng i nto
supplementary agreements with another polit1cal subdi vision or affect any other agreements
al read y i n force bct1 ee
45
shall not be li mited to, provisions for evacuation and receptiOn of injured and other persons
a nd the exchange of medical, fire, pol icc, public utility, reconnaissance, wel fare,
transportation and com munica tions personnel, and equipment and supplies.
ARTICLE VTII WORKERS'
COMPENSATION
Each participati ng government shall provide for the payment of workers' compensation and
death benefits to i njured mt:mbcrs of the emergency forces of that participating government
and representatives of deceased members of the emergency forces in case the members
sustain injuries or are killed while rendering aid pursuan t to this compact, in the same
marmer and on the same terms as if the inju ry or death were sustained wi thin thei r own
jurisdiction.
ARTICLE IX
REIMBURSEMENT "F
Any participating goverrunent rendering aid in another jurisdiction pursuant to tlus compact
shall be rei mbu rsed by the participating government receiving the emergency aid for any
loss or damage to or expense incurred in t11e operation of any eq uipment and the provision of
any service in answering a request for aid and for the costs incurred in connection with the
requests. However, an aiding political subdivision may assume in whole or in part the loss,
damage, expense, or od1er cost, or may loan the equipment or donate the services to the
receiving pa rticipating govern ment without charge or cost, and any two or more participating
governments may enter into supplementary agreements establishing a different allocation of
costs among the participating governments. Article Vlll expenses shall not be reimbursable
under this provision.
ARTICLE X
EVACUATlON AND SHELTERING
Plans for the orderly evacuation and reception of portions of the civilian population as the
result of any emergency or disaster shall be worked out and maintained between the
participating governments and the em t:rgency management or services directors of the
various jurisdictiOns where any type of incideut requ i ri ng evacuations nlight occur. The
plans shall be put into effect by request of the participating government from which
evacuees come and shall include the manner of b'ansporting the evacuees, the number of
evacuees to be recei ved in different areas, the manner in which food, clothi ng, housi11g, and
medical care will be provided, the registration of !he evacuees, the providing of facilities for
the notification of relatives or friends, and the forwarding of the evacuet:S to other areas or
the bringing in of additional materials.supplies, and all other relevant factors. l11e plans
shall provide that tht: pa rt icipating government receiving evacuees and U1e participat ing
governmen t from which dte evacuees comc'shall mutua U y agree as to reimbursement of outof-pocket expenses incurred in receiv ing and caring for the e\•acuces, for expenditures for
transportation, food. clothing, medicines and medical care, and like items. The expenditures
shall be reimbu rsed as agreed by the pa rticipating government from which the evacuees
come. After the ten uimttion of the emergency or disaster, the part icipatlllg government from
which the evacuees come shall asswne t11c responsibility for the ultimate support of
repatriation of such evacuees.
ARTICLEXl
IMP LEifENI'AT!ON
Thi s compact shall become opcrdtive immed iatel y upon its adoption by ordinance or
resolution by the governing bodies of any two politica l subdivisions. 1l1ereafter, this
46
compact shall become effective as to any other political subdivisi on upon its adoption by
ordinance or resolution of the governing body of the political subdivision. Any participating
government may withdraw from this compact by adopting an ordinance or resolution
repealing the same, but a withdrawal shall not take effect until thirty days after the govemi ng
body of the withdrawing participating government has given notice in writing of the
withdrawal to the administrator of the emergency management division who shall notify al1
other participating govenunents. The action shall not relieve the withdrawing political
subdivision from obligations assumed under this compact prior to the effecti ve date of
withdrawal. Duly authenticated copi es of this compact and any supplementary agreements as
may be entered i nto shall be deposited, at the time of their approval, with the administrator
of the emergency management division who shall notify all participating governments and
other appropriate agencies of state government.
ARTICLE XII
VALIDITY
This compact shall be construed to effectuate the purposes stated in article I. If any provision
of this compact is declared unconstitutional, or the applicability of the compact to any person
or circumstances is held invalid, the constitutionality of the remainder of this compact and
the applicability of this compact to other persons and circumstances shall not be affected.
:.
Sec. 56. EFFECTIVE DATE. This division ofthis Act, being deemed of immediate
importance, takes effect upon enactment.
47
Section III
Automobile Insurance
1. Examples of Automobile Risk
1. City ambulance taking patient to hospital involved in a
motor vehicle accident – other driver killed
2. Barrowed vehicle left in flood zone overnight and
destroyed by flood
3. Insured swerved to miss deer and rolled
4. Claimant injured in a high speed police pursuit
5. Fire truck going to call rolled into ditch
6. City employee going to a meeting with personal car has
accident
48
Friday, October 27, 2000 Page 38
School officials referred all
questions to Superintendent Barry
Green, who could not be reached
for comment..A high school football game
scheduled Thursday
night between Clarksville and
Valley of Elgin was postponed.
The accident remains under investigation. It marked the sixth
fatai accident involving a school
bus this year in Iowa:
By EMILY GRAHAM
• May 8: A special education
REGISTER STAFF WRITER
from Fairfield was
A car collided with a Clarksville consultant
school district bus Thursday in killed when l;ler car collided with a
Butler County, killing two P,eOplein school bus in southeast Iowa. Three
the car, officials said.
/tt.
children on the bus were injured.
Twenty-eight students on the
e-April 18: One woman died
bus were taken ·to Waverly Municipal Hospital suffering cuts, when a school bus taking students
bruises and broken bones. None to a track meet collided with a car
was hurt
seriously, hospital
spokeswoman Victoria Kruse said. near Hansell.The woman's car was
Kruse said the children ranged struck from behind by a pickup
from elementary school age to truck and ptished into the path of a
high school age.
The Butler Colllity -sheriff's of- bus. No students were injured.
fice said the bus struck the car at
•Aprill7:Amotoristwaskilled
the uncontrolled intersection of when a school bus collided with a
Terrace Avenue and !60th Street,
about 3 miles north of Clarksville. car on Iowa Highway 3 east of
Both vehicles roUed over and Hampton. No one on the bus was
landed inthe west ditch of Terrace 1ljured.
Avenue.
•Feb. 15: A western Iowa basThe driver and passenger in the
car were pronounced dead at the {etball coach was killed when his
scene by the Butler County medical 1an collid.ed with a school bus in
examiner. Officials were not releasing the names of the victims ¥esterft" Harrison ·eounty. The
until family members were :rash sent 32 students to the hosnotified.
>ital.
Larry Voigts, 61, of Clarksville,
•Feb. 7: One person was killed
drove the bus.
llld four others were injured in a
tileup involving a school bus, a
;cott County sheriff's patrol car
nd three other cars. The bus
School bus
crash kills
two in car
.,
·.',
.,,
:
.i
:I
49
2.
Handling the Auto Risk
a. Avoid the Risk
Example of avoiding the risk would be to eliminate
employees taking other employees to work locations
b. Reduce the Risk
Reducing the risk of auto liability claims can be
accomplished in a number of ways:
a. careful scrutiny of driving records in hiring all
drivers
b. Regular automobile driver safety training
c. Reduce where possible, the use of City or
Utility vehicles for non-City or Utility
activities
d. Avoid parking all City or Utility vehicles in a
single concentrated location
50
c. Transfer by Contract
Many Cities are transferring their auto
transportation risk by contracting city
transportation with outside private vendors.
d. Retain the Risk
An easy way to retain certain amount of risk is for
the City to assume a larger deductible for both
comprehensive and collision damage to its fleet.
e. Purchase Insurance Coverage
Cities owning vehicles must purchase auto
liability insurance because of the volatile nature of
potential auto accidents and their size.
51
3. Automobile Insurance Issues
1. Liability Coverage for all owned vehicles
2. Non-owned auto liability
3. Hired auto liability
4. Personal autos driven by employees
5. Garage keepers liability
6. Physical damage insurance on City vehicles
7. Automobile medical payments insurance
8. Uninsured and under insured motorist protection
9. Replacement cost physical damage on most expensive
vehicles.
10.Volunteer Fire organizations
52
Safety Group News
IASB Safely Group Insurance Program
Voul me 2 • Issue 2
Usinq Your Personal Auto For
School Business - Are You Covered?
is the primary and sole
employees or volunteers
The Code further goes
or many years
including driving to or
on to define an empioy- limit tbat should apply
the IASB Safety
should a covered perfrom work. Clearly to
ee as ally person who
Group Program
son, as defined in the
be covered, the auto in
performs services for
has automatically .
statute, have an acctdcnt question must be used
the entity whether or
included coverage
with their personal auto by a covered person actnot the person is comunder the automobile
that gives rise to a tort
ing within the scope of
pensated for those sersection that provides
•· liability claim. The IO"VI'll their duties for the
vices. This language
liability protection for
Supreme Court has
· school district.
officers, employees, and J obviously brings into
clearly stated that as
Robert E.jester
agents of the school dis-1 play volunteers.
insurer for the school
trict while operatiJlR
I In the past there has
always been the nagging district, we would have
their own personal
question and resulting
Using Your
no rights of subrogation
vehicles in the course
confusion over the
Personal Auto
against the individual
of their duties for the
application of the limits employee or volunteer
For School
school district. The
provided under the
Business
or against his or her
underlying obligation
school policy and how
COIIIil l tled
insurer. To quote a
behind this is found in
those related to any per· Supreme Court decision
Chapter 670 of the
sonal auto insurance the. on this very subject:"ln
lowa Code that speaks
employee may have. In · other words,any right
to the whole issue of
liability of a guvernmen· the past we have always to recover back from
T/Je Cotle
indicated that the indi- 1 the teacher for his neglital subdivision wd the
further goes
vidual personal automo- gence was eliminated
indemnification that
011 tn dc>Jille
bile policy would be
by enactment of the
they are lO provide for
an employee
primary, anll thus would statute. One who must
such people.
as any perpay first with the school indemnify another canThe basic Code Ian·
SOil wbo per! not at the same time
guage in Chapter 670.8 ' insurance providing
forms serreads as follows; "The , aces:; liability protec- ' claim contribution from
vices for
tion. In response to·
that person. Stove v.
governil'lg body shall
the e111ily
recent questions plus a
Wood,199 N.W. 2d 323,
defend its officers and
wiJetber or
further review of Iowa
326 (Iowa 1972).
employees,whether
nut tbe perSupreme Court deci·
The language of the
elected or appointed
SOli is comsions on the subject, w, endorsement clearly
and shall save harmless
pellsatedfor
now feel that it is clear- states that we are not
and indemnify the offi·
those sercers and employees
ly the intent of the
providing coverage for
vices.
against any tort claim or 1 courts that the coverage any personal usage of
1
demand.
provided by the district
vehicles owned by
F
53
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
OFFICERS, EMPLOYEES AND AGENTS OPERATING AUTOMOBILES
IN THE COURSE OF THEIR DUTIES
This endorsement modifies insurance provided under the following:
BUSINESS AUTO COVERAGE FORM
With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified
by the endorsement.
We agree with you as follows:
A.
Any of your officers, "employees" and agents are "Insureds" within Section II - LIABILITY COVERAGE while they
are operating an "auto" under the following conditions:
1. While such "auto" is being used in your business;
B.
2.
While the officers, "employees" and agents operating an uauto" are acting within the scope of their
employment or duties for you; and
3.
When the use of such "auto" has been authorized by you.
This endorsement and any coverage it may otherwise afford does not apply:
1.
While an officer, "employee" or agent of yours uses any "auto" to drive to or from work; or
2.
While any "auto" is operated for any personal use by any of your officers, "employees" or agents.
The limitations under B. above do not apply when an owned "auto" is a scheduled "auto" and is furnished for regular
use to an officer or "employee" by the Named Insured.
54
Section IV
Crime Insurance
Crime Insurance, particularly loss from employee
dishonesty, is one of the fastest growing areas
of losses in Iowa and around the country
55
Examples of Municipal Crime Losses
Failure of city clerk to faithfully perform duties
Misappropriation of funds
Irregularities in city clerk account
Clerk paid bill on sewer station without approval
Employee improperly paid for personal expenses
Public works director used public money for personal
purchases
Clerk issued unauthorized checks to herself and the mayor
Money missing from a safe
Failure to bill for ambulance services
Treasurer altered an amount on a check
Employee stole city funds
Clerk forged checks
56
Claim Detail on 3 Losses
Employee Dishonesty
This loss resulted from the City Clerk issuing unauthorized and
unsupported payroll, insurance reimbursement and other checks
totaling $22,070.37. After discovery, the clerk pled guilty in her
criminal case and restitution was ordered.
EMC obtained a civil judgment against the City Clerk but she is
retired, living in senior housing on social security. Based on this, we
have no means of recovery at this time.
Forgery and Alterations
Employee used city funds to pay personal expenses and forged
checks to herself for extra payroll amounts. EMC paid the claim in
the amount of $9,831.91. The court ordered restitution paid to the
city, resulting in the city collecting $2,315.71 in excess of their loss.
EMC requested reimbursement of the excess amount and the City
returned the funds to EMC.
Faithful Performance
This is a claim arising from the nonfeasance and malfeasance of the
secretary of the Board for the city ambulance service. The state audit
was unable to determine if ambulance calls were simply unbilled or if
the collections had not been deposited. The audit found that the
Ambulance Service had uncollected and/or undeposited receivables
of $75,948.72 at the time of the audit. EMC paid the full policy limit of
$50,000.
The Ambulance Service did attempt to re-bill the insurance
companies and the individuals responsible for the charges, but claims
were denied for being untimely and/or the individuals had passed
away. No criminal charges were filed.
1. Method of Handling the Crime Risk
1. Avoid the Risk
Unfortunately, this is nearly impossible to
accomplish once the city comes into existence and
begins to accept and handle money.
2. Reduce the Risk
The risk of embezzlement can be substantially reduced
by instituting dual controls over financial transactions to
the greatest extent possible.
3. Transfer by Contract
Outsource certain financial operations to third parties
such as the preparation and payment of payroll on a
monthly basis by outside vendors.
58
Method of Handling the Crime Risk (cont.)
4. Retain the Risk
Some level of risk in this area can be retained through
higher deductibles.
5. Purchase Insurance
All cities purchase some level of crime insurance,
again, because of the potential size of the loss.
59
2. Crime Insurance Issues
1. Limits of Coverage
2. Employee Dishonesty
3. Money and Securities Theft
4. Computer Fraud
5. Forgery
6. 28E Entities
7. Volunteer Fire Groups
8. City Treasurer
60
Iowa Code 64.13
64.13 MUNICIPAL OFFICERS.
The bonds of all municipal officers who are required to give bonds
shall each be in such penal sum as may be provided by law or as the
council shall from time to time prescribe by ordinance; but the
council may provide for a surety bond running to the city and
covering all city officers and employees not otherwise covered and
conditioned as specified for bonds in section 64.2.
[R60, § 1084, 1132; C73, § 504, 514; C97 I § 1185; S13, § 1185;
C24, 27 I 31, 35, 39, § 1068; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77I
79, 81, § 64.13]
Bonds not required, § 64.1A
Previous Section 64. 12
Next Section 64.14
61
COMMERCIAL CAlM
POUCV NUMBER:
THIS ENDORSEMENT CHANGES THE POUCY.PLEASE READ IT CAREFUllY.
70
INCLUDE JOINT VENTURE OR PARTNERSHIP AS INSURED
SPECIAL FORM
This endorsement modifies Insurance provided under the following:
GOVERNMENT CRIME COVERAGE FORM
GOVERNMENT CRIME POUCY
And appf.es only 1o the Employee Theft lnsumg Agreement-per loss or per employee
A. Schedule
Joint Venture Or Partnership
All 28E ENTITIES OR AGREEMENTS,
AND OTHER ENTITIES, GRANTS,
AND PROPERTY OF OTHERS FOR
WHICH THE INSURED HAS ASSUMED
A DUTY TO PROVIDE BOOKKEEPING
AND/OR OTHER ADMINISTRATIVE
SERVICES.
Amount
SAME AS THE LIMIT
FOR EMPLOYEE THEFT.
B. Provisions
1. Each joint venture or partnership shown in the Schedule is added as a named insured.
2. For any joint venture or partnership shown in the Schedule In which you have an interest,we WJll pay:
(a) Up to the limit of insurance it you are legaJiy liable for loss sustained by the joint venture or partnership; or
(b) Up to the linit of insurance based upon your ownership interest in the joint venture or partnership if you are
not legally liable for loss sustained by the joint venture or partnership.
3. Tile amount that we willpay is part of. not in addition to, the limit of Insurance for Employee Theft Coverage.
62
POLICY NUMBER:
COMMERCIAL CRIME
CR2512 03 00
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
INCLUDE TREASURERS OR TAX COLLECTORS AS
EMPLOYEES
This endorsement modifies insurance provided under the following:
GOVERNMENT CRIME COVERAGE FORM
GOVERNMENT CRIME POLICY
A. Schedule*
Treasurers Or Tax Collectors
*Information required to complete this Schedule, if not shown on this endorsement, will be shown in the Declarations
B. Provisions
1. The Definition of "Employee" is amended to
include your treasurers or tax collectors
shown in the Schedule.
2. Exclusion D.2.e.Treasurer or Tax Collector is
deleted.
63
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADD FAITHFUL PERFORMANCE OF DUTY COVERAGE
FOR GOVERNMENT EMPLOYEES
This endorsement modifies insurance provided under the following:
GOVERNMENT CRIME COVERAGE FORM
GOVERNMENT CRIME POLICY
and applies to the Insuring Agreements designated below:
B. Provisions
1. The following is added to the Employee Theft
Insuring Agreement designated above:
We will pay for loss or damage to "money",
"securities" and "other property" resulting directly from the failure of any "emoloyee" to
faithfully perform bjs or cer duties as prescri d
law, when such failure has as its direct and
immediate result a loss of your covered property. The most we will pay for loss arising out of
any one ..occurrence" is the Limit of Insurance
shown in the Schedule. That Limit, is part of,
not in addition to, the Limit of Insurance shown
in the Declarations.
J5i
64
3.
SETTING AN EMPLOYEE DISHONESTY LIMIT
The Surety Association of America, an organization which compiles employee
dishonesty premium and loss data, has published a chart to help select minimum
bond limits. This chart is reproduced below. It is worth using this as a guide
when your district is selecting an employee dishonesty limit.
The table is used by first estimating an "exposure factor". The exposure factor is
20% of current assets plus 10% of annual revenue. The principal current asset
of a school district is cash.
Once the exposure factor has been determined, the suggested minimum bond .
limit is obtained by reading across. If, for example, a school district has
$2,000,000 cash in the bank and $25,000,000 in annual revenues, the exposure
factor would be: .2 X 2,000,000 + .100 X 25,000,000 = 2,900,000. An exposure
factor of 2, 900,000 results in a minimum bond limit in the $200,000 - $300,000
range.
Guide for Minimum Employee Dishonesty Limits
From the Surety Association of America
Suggested Minimum Bond Limits
Exposure Factor*
Amount of Bond
Up to 25,000
25,000 to 125,000
125, 000 to 400,000
400,000 to 1,000,000
1,000,000 to 2,000,000
2,000,000 to 4, 000,000
4,000,000 to 6,000, 000
6,000,000 to 10,000,000
10,000,000 to 15,000,000
15,000,000 to 25,000,000
25,000,000 to 75,000,000
75,000,000 to 175,000,000
175,000,000 to 500,000,000
500,000,000 to 1,000,000,000
1,000,000,000 to 1,500,000,000
2,500 to 25,000
25,000 to 50,000
50,000 to 100,000
100,000 to 150,000
150,000 to 200,000
200,000 to 300,000
300,000 to 400,000
400,000 to 600,000
600,000 to 800,000
800,000 to 1,000,000
1,000,000 to 1,500,000
1,500,000 to 2,000,000
2,000,000 to 3,000,000
3,000,000 to 4,000,000
4,000,000 to 5,000,000
* Exposure Factor= 20% of total current assets, plus 10% of annual revenue.
65
Section V
Workers’ Compensation
Recent Large Losses
Unloading forklift – pipe crushed foot
$188,738
Electrocution
$177,793
Arrested two intoxicated females
$117,815
Using power pruner to cut tree branches
$125,547
Directing traffic on Interstate – hit by passing car
$442,833
Tried to stop rolling mower – ran over leg
$92,936
66
1..
Handling the
Workers’ Compensation Risk
1. Avoid the Risk
The only way to really avoid the risk, of workers’
compensation claims, is to not have employees.
Cities will never be able to totally eliminate this
exposure.
2. Reduce the Risk
There are numerous opportunities to reduce the
workers’ compensation risk through a variety of Best
Practices and Loss Prevention activities.
3. Transfer by Contract
One way to transfer workers’ compensation risks
is to contract with outside vendors for certain
maintenance activities such as tree trimming, &
67
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h
a
n
g
i
n
g
n street.
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i
g
h
t
s
o
n
m
a
i
68
Handling the workers’ compensation risk
(cont.)
4. Retain the Risk
Some level of workers’ compensation risk can be
retained through use of medical use only deductibles
on the workers’ compensation policy.
5. Purchase Insurance Coverage
All Cities buy some form of workers’ compensation
insurance, which is required by Chapter 85 of the
Iowa Code.
68
2.
Issues in
Workers’ Compensation Insurance
1. Coverage is statutory to cover benefits required by
Chapter 85 of the Code.
2. Coverage applies to all employees, both full time and part
time.
3. Workers’ Compensation covers Council and Board members,
even though they serve without remuneration.
69
Issues in Workers’ Compensation Insurance
(cont.)
4. Volunteers are not covered by workers’ compensation.
5. Driving to work is not covered by the workers’
compensation statue in Iowa.
6. Premium is based on payroll divided into various
classifications based on type of work performed.
7. Experience Modification Factors
70
3.
Workers’ Compensation
Best Practices
1. Administrative Team Involvement
2. Communication with Employees
3. Safety Committee or After Action Reviews
4. Updated Job Descriptions
5. Pre-employment physicals/Functional Capacity
Screenings
71
Workers’ Compensation Best Practices (cont.)
6. Designed Physicians/Clinics
7. Early Return to Work Program
8. Medical Only Deductible
9. Loss Control Visits
(Ergonomic analysis, mock OSHA inspection, etc.)
10. Claim Reviews
72
4.
On-Duty Firefighters
fatalities in the United States
Date Range 1/1/2011 to 12/31/2011
Number of on-duty Firefighter fatalities: 81
Count of Hometown Heroes: 19
Classification:
49
28
3
1
Volunteer 60.4%
Career 34.5%
Wildland Part-Time 3.70%
Paid-on-Call 1.23%
73
On-Duty Firefighters (cont)
Number of multiple Firefighters facility incidents: 3
Number of Firefighter fatalities associated with Wildland
incidents: 10
Type of Duty
28
20
11
8
on-scene fire 34.5%
after 24.6%
other on-duty 13.5%
responding 9.87%
7
5
2
training 8.64%
on-scene non-fire 6.17%
returning 2.46%
Percent of fatalities related to emergency duty: 54.3%
Number of firefighter fatalities associated with
suspicious/incendiary incidents: 1
74
On-Duty Firefighters (cont.)
Type of Incident
36 Not Incident Related 44.4%
2 EMS 2.46%
25 Structure Fire 30.8%
2 Outside Fire 2.46%
6 Wildland 7.40%
1 Tech Rescue 1.23%
4 Weather/Natural Disaster 4.93%
1 Other 1.23%
3 MVA 3.70%
1 Unknown 1.23%
75
On-Duty Firefighters (cont.)
Cause of Fatal Injury
48 Stress/Overexertion 59.2%
3 Collapse 3.70%
11 Caught/Trapped 13.5%
3 Vehicle Collision 3.70%
5 Struck by 6.17%
3 Unknown 3.70%
4 Other 4.93%
1 Out of Air 1.23%
3 Fall 3.70%
76
On-Duty Firefighters (cont.)
Nature of Fatal Injury:
Age of Firefighter when the
Fatal Injury was sustained:
48 Heart Attack 59.2%
2 Under 21
12 Trauma 14.8%
7 21 to 25
6 Asphyxiation 7.40%
2 26 to 30
6 Burns 7.40%
12 31 to 40
4 Other 4.93%
26 41 to 50
3 Unknown 3.70%
26 51 TO 60
1 Crushed 1.23%
1 Heat Exhaustion 1.23%
6 61 and Over
Percent of Firefighter fatalities under Age 40: 25.9%
77
5.
w
ti
Background
• . NCCIrecently filed the Experience Rating
Adjustment (ERA) in JA -Tht5-fil!ng was
approved effective/f0/1/2011 ·
• ERA was originally 'fHed-+n 1997 and has been
approved in the overwhelming majority of
states that utilize the NCCIExperience Rating
Plan.
• ERA modifies the experience rating formula by
using a 30°/o weighting factor for medical-only
claims, thereby reducing the impact of these
claims on the experience rating.
78
Background
Continued ...
• The experience rating values are adjusted to
reflect the removal of 70°/o of medical-only
claims.
• Since both the expected losses and the actual
losses used in the experience rating formula
are reduced proportionately, there is no
significant impact expected on aggregate
premium in Iowa.
• The impact on individual risks will vary based
on the amount of their medical-only losses
and whether they have chosen a deductible.
79
Experience Rating Plan
Split Point Review
The split point separates losses into primary and
· excess components; it is currently 5,000
If the split point is not indexed for claim cost
inflation, a greater propo_rtion of losses fall into the
excess category as time goes on
Since excess losses receive less weight than primary
losses in the experience rating formula, the plan
becomes less responsive
Indications are that the split point should be
increased to 15,000; this is not surprising since the
average cost of a claim has tripled since the last split
point update (20 years ago)
80
Experience Rating Plan
Split Point Review (Cont'd)
• NCCIplans to institute a transition program that
increases the split point most of the way, initially,
and phases in the rest of the change
- The split point will initially be increased to 10k
- The next effective year filing will further increase the
split point to 13.5K
- The third effective year filing will further increase the
split point all the way to the indicated split point of
lSk trended two years forward (rounded to the
nearest 500)
• Subsequent effective year filings will increase thesplit point as indicated
81
WORKERS COMPENSATION EXPERIENCE RATING
Rls1\ame:
Rating Effective Dale 01/0112011
Pu m:u y LCSS S
6,050
::: t at•r•z•no
11.151
.
..
1.00
.............................
·- R EVISED R A T IN G ••••
... ......... ..............
....
I
62.243
(A) ' (F)
-
I
Risk 10:
Rating Effective Date:0110112C11
Producto
i n Dale: ttv15/2C10
Firm ID:
Firm Namt:
Firm ID:
Firm Name·c
Slate. IOWA
Tala!;
(J)
1,626
(A)'(C)
71,919
(K)
3,352
... . .
Risk Narre:
State· IOWA
Patatre ::(ces:;
Ja ..J
62,243
C'(1·A)•G
(E)
Factors
Production Date. 1tv15/2010
C'(t·A)+G
()
Actual
[X peeled
WORKERS COMPENSATION EXPERIENCE RATING
ltsk 10.
76,746
..
(J)I(K )
I
.94
_j
14 0WA
Carrier:
Po Icy No.
Elf Date
OUJt /2008
Exp Dato: Ot.Ql/2009
Ell Dale:
0110112009
Exp Dale:
RATING REVISED TO REFLECT AFPROVED RATING VALUES
Icarrier:
27197-004
Polic
Eff-D3lo: 01/01/2010 Exp-Date: 01101120:ii]
14-IOWA
RE
1-J
Carrier:
Fl'm ID:
Firm Name.
Polley No.
0110112010
0 4 (It
JJ.s.,
Jxc )
C<,py igtlt 1n3-2010,"' rlghllrtMM!d. T"oot ex mocifi:otlon
COun::M 01C<n"pema:ton ntu'ft!Q,In; (NCCI).NQ fU1hef UK dwen*ltltbrt,t¥•<fti"lt',,U•.Y. e"ltOf d$pO•iton ol hit ·rltitog modfk41'!kn lttc 01' •"Y pM lhot:Mlf
ru1 be UMd wi'.houiiM 'lllrit:eA CIOUM'( of NCO. NCCI mat:fl norpeMfQbonor WJif.,lt. t)J)feS$tO or.
....,. tMomlldon, pt'Oliv:iOI
and
nodlicaloft factor tublerbetiOoncltr'lt liO,
"'*• ,.;
•Total byPokyYNrol•ltiMSS2000 1eu. OO!HMel.osl
CC.Wi.lfl•
E •WbiMyU.t
,.,no
sevte
as t.
UUSAHW
V - Pagc2of2
82
6.
Actual
1/1/2012
Actual
7/1/2013
8810 – Clerical
.31
.31
--
5506 – Street or Road
9.00
10.33
+14.8%
7370 – Ambulance
7.55
6.85
-9.1%
7520 – Waterworks
4.60
5.10
+10.9%
7539 – Electric Light or Power Co.
5.38
5.57
7580 – Sewage Plant
3.00
3.20
+3.5%
+6.67
7720 – Police
3.80
4.03
+6.1%
7710 – Firefighters
32.07
37.95
+18.3%
7711 – Firefighters-Volunteers
32.07
37.95
+18.3%
9102 – Park NOC
4.85
5.48
+13%
9410 - Municipal Employees NOC
3.27
3.85
+17.7%
Class/Code
%
Change
83