HomeMy WebLinkAboutAgenda Statement 1982/06/15 Item 12COUNCIL AGENDA STATEMENT
Item 12
ITEM TITu
Meeting Date 6/15/82
E= Resolution j~~~~~ - Awarding Public Liability Insurance Coverage
SUBMITTEq BY:~.,Director of Finance/City Attorney
(4/5ths Vote: Yes No X )
We h ve received our annual renewal bids for the City's Public Liability
Insu ance. It is our
RECD MENDATION:
That Council accept Option (3-C) maintaining our present $10,000,000 coverage
and educing our self-insured retention level from $500,000 to $100,000 at a
tota cost of $30,000.
DISC SSION:
Sinc June 19, 1978, we have been purchasing our $10,000,000 Public Liability
Insu ance coverage with a self-insured retention level of $500,000. The cost
for his coverage has decreased dramatically in subsequent years as indicated
in t e following schedule:
Year Cost
1978 $117,008
1979 $ 92,674
1980 $ 34,608
1981 $ 25,000
It i no4~ possible to maintain our present overall coverage of $10,000,000
with a substantially lower self-insured retention level of $100,000 at a total
cost of $30,000. This bid price is a result of the continuing soft insurance
mark t and very good loss experience in past years.
Whil the cost of insurance has decreased, our liability has increased. There
have been a number of Appellate and Supreme Court cases which have expanded
muni ipal liability in cases where a dangerous condition of public property
is a leged. The most damaging case was decided in 1979 by the California
Supr me Court. This case, Ducey v. Argo Sales Company, found liability on
the art of the governmental agency where a vehicle speeding out of control,
hit is brakes and drove across a 46 foot landscaped median headon into a vehicle
trav ling in the opposite direction. The speeding vehicle was forced to brake
beca se a mentally retarded 13 year old boy was driving a truck in an erratic
mann r which caused a traffic bottleneck in front of the speeding car.
Desp to the obvious causes of this accident, the court found the State liable
beca se the lack of a median barrier in the 46 foot median constituted a
"dan Brous condition of public property". Typically, the insurance carried by
most drivers is insufficient to cover the catastrophic injuries suffered in some
acci ents. Plaintiffs routinely look to cities or other governmental agencies
as a "deep pocket". Courts have encouraged plaintiffs in this endeavor by
finding that dangerous conditions exist in wery~unikely situations.
Form A-11$ (Rev. 11/79)
-2-
12
6/15/82
indicated, although our own loss experience history has been good, this
be due to good fortune. In those accidents where we have been liable,
damages have been relatively small. In most cases, we have just been for-
iate that the victims did not suffer severe injuries.
0 her cities in San Diego County have not been so fortunate. Escondido recently
paid out its entire self-insured retention of $500,000 for an intersection
a cident where a motorcyclist proceeded into an intersection where he did not
h ve clear visibility due to the design of the intersection and the heavy weed
g wti~.
With anticipated cuts in City staff, -it may be difficult to keep the visibility
0 our own trafric signals and intersections totally unobscured from tree limb
g wth and vegetation. The City of La P~1esa paid out $110,000 due to an unusual
c rb design. Both of these cities had a good loss experience from a liability
s ndpoint up until the time of the accidents.
Ind summary, it seems prudent at this time, to take advantage of the lower
c sts and reduce our self-insured retention level to $100,000.
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