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2023 Excess WC Insurance Renewal Proposal from EPIC

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Agenda Item

i. Renewal of the District’s Excess Workers’ Compensation and Employer’s Liability Insurance Policy (not to exceed $272,800)

Summary: Presented: Byron Schueneman, Chief Financial Officer, Division of Finance
Request: It is requested that the Board of Education approve the renewal of the District’s Excess Workers’ Compensation and Employer’s Liability Insurance coverage with Star Insurance Company (“Star”), for $272,800.00.
Why: The DeKalb County School District (“District”) currently has an Excess Workers’ Compensation & Employer’s Liability Insurance policy with Star. That policy will expire on July 1, 2023. Therefore, the District must select an insurance carrier to renew its coverage for fiscal year 2024. The District is a self-insured employer for workers’ compensation and is therefore mandated by state law to purchase excess workers’ compensation coverage. Specifically, O.C.G.A. 34-9-121, et. seq., and the State Board of Workers’ Compensation Rule 121 (c), require self-insurance entities to carry excess workers’ compensation coverage.
Details: This item requests that the Board of Education approve the renewal of the District’s Excess Workers’ Compensation & Employer’s Liability Insurance Policy with Star. This company has insured the District for the last eight years. The District’s broker, Edgewood Partners Insurance Center (“Epic”), marketed and negotiated the renewal of this policy with ten (10) different insurance companies, including the incumbent, Star. The most favorable renewal was received from Star. Hardening market conditions, the District’s loss history, the District’s tight deadline for submission of quotes, and the District’s increase in estimated payroll, have resulted in a lack of quote submissions from nine (9) insurance companies.

This year’s $272,800.00 premium represents a $3,832.00.00 premium dollar decrease over the 2022 premium of $268,968.00. To provide the District with the most premium savings, the option which increases the District’s retention amount from $1,250,000 to $1,500,000 was selected this year. This year’s estimated premium is subject to a final audit which could result in an additional premium or return of any premium overpayment.

Star’s quote provides a statutory limit for workers’ compensation. The policy limit for Employer’s Liability is $2,000,000.00 per occurrence.
Financial impact: This is a budgeted expense within the Risk Management budget. The cost code is 100.1000.526000.15311.7490.9990.8010.050.1531.
Contact: Mr. Byron Schueneman, Chief Financial Officer, Division of Finance, 678.676.0446
Mr. Glinton R. Darien, Jr., Director of Risk Management, Division of Finance, 678.676.0403
Status: Approved by General Counsel
DEKALB COUNTY SCHOOL DISTRICT




        Excess Workers’ Compensation
             & Employer’s Liability
          July 1, 2023 to July 1, 2024




                                             May 10, 2023

Prepared by:
LaToya Cotton- Robinson, Account Executive
Brittany Palmquist, Account Manager

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EXECUTIVE SUMMARY

Edgewood Partners Insurance Center (EPIC) is proud to represent DeKalb County School District in its risk management
and insurance programs. We are pleased to present to you this year’s Excess Workers’ Compensation & Employer’s
Liability Insurance Renewal for the July 1, 2023 to July 1, 2024 policy term.

The insurance marketplace is very limited and very restrictive for schools and public entities. In today’s Excess Workers’
Compensation & Employer’s Liability Insurance marketplace, underwriters are indicating that there will be marginal
increases in premium for accounts with no losses that have penetrated 50% of the Self- Insured Retention (SIR). And
for school and public entities that have incurred losses penetrating the (SIR) or a frequency of losses- up to 25%
increase in premium will also be realized. In more severe cases insurance carriers decline to underwrite risks at all.

The insurance marketplace has hardened considerably. Unfortunately, that combined with several of the District’s
large losses have significantly impacted the renewal terms. The District has several losses that continue to trend and
develop. Contemplating the continued increasing loss cost trending in the Excess Workers’ Compensation line, Star
Insurance Company took a more aggressive approach over the past two years.

Over the prior two renewals, Star required an increase in Self Insured Retention (SIR) from $1,000,000 to $1,250,000
due to losses and inconsistencies in the District’s loss runs. The insurance carrier is not yet comfortable with reducing the
SIR this year. They agree to take another look at a lower SIR next year

We have successfully negotiated a flat rate of .0342. The District’s premium has increased 7.96% or $22,192. This is
strictly payroll driven as this coincides with the District’s increase in estimated payroll ($64,890,000 or 7.96% increase)
for the 2023 to 2024 policy term from $815,110,000 to $880,000,000.

For the past three (3) years we have consistently marketed the District’s Excess Workers’ Compensation & Employer’s
Liability Insurance with all of the viable insurance carriers. This year, we did approach a new market to the state of
Georgia with an interest in School Districts. We have added this carrier to our marketing results. Below are our results:



              Carrier Approached                                      Marketing Results

              Star Insurance Company (Incumbent)                      Quotation Provided.

              Safety National                                         Declined due to past history with District.

              Midwest Employers Casualty Company                      Questioned loss reports received. Could not meet District’s
                                                                      right need by date after receipt of explanations.



              Arch Insurance Company                                  Declined. Would not be competitive as their pricing would be
                                                                      significantly higher than expiring and they would require a $2M
                                                                      SIR.

              AIG Insurance Company                                   Declined. Can no longer write K-12 risk, only Higher Education.


              Chubb Insurance Company                                 Declined. Cannot provide coverage for police exposure.

              BRIT Insurance                                          Declined. Not a good fit.

              Star Stone Insurance                                    Declined. Not a good fit.

              Lloyd’s of London                                       Declined due to losses.

              Bridge Excess Solutions, an FC Capital Company          Declined. Not competitive with current pricing & not a market     2
                                                                      for self-administered risks.
EXECUTIVE SUMMARY


Please provide renewal instructions prior to Friday, July 1st in addition to the signed & dated authorization to bind.

Thank you for allowing EPIC Insurance Brokers & Consultants to serve as an extension of your Risk Management
Department. Should you wish to discuss this renewal proposal, please feel free to let us know.

We look forward to reviewing our Proposal with you today.




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EXCESS WORKERS’ COMPENSATION &
EMPLOYERS LIABILITY INSURANCE

  COMPANY:     Star Insurance Company                  EFFECTIVE:      July 1, 2023 to July 1, 2024

 POLICY #:    TBD                                     PREMIUM:        $272,800 Deposit Premium



  WORKERS’ COMPENSATION: State law O.C.G.A. (34-9-2 Section A, Paragraph 2) requires that every employer provide
  Workers’ Compensation insurance for their employees. This insurance provides coverage for accidents or disease
  arising from employment as prescribed by these state laws. Benefits can include lost wages, medical expenses, and
  permanent disfigurement/disability payments.

  STATUTORY WORKERS' COMPENSATION: This coverage is used to comply with the Workers' Compensation Coverage that
  is required by your state law. Under this requirement, an employee can be compensated if they are injured while
  working for you, regardless of your negligence as an employer.

  EMPLOYER’S LIABILITY: This coverage will pay for all sums which you are legally obligated to pay because of bodily injury
  by accident or disease sustained by any employee arising out of their employment. This coverage is distinct from any
  Workers’ Compensation policy claim.

  SPECIFIC LIMIT EACH ACCIDENT
  Policy Part One, Workers’ Compensation: Statutory
  Policy Part Two, Employer’s Liability: $2,000,000

  SPECIFIC LIMIT EACH EMPLOYEE FOR DISEASE
  Policy Part One, Workers’ Compensation: Statutory
  Policy Part Two, Employer’s Liability: $2,000,000

  RETENTIONS:
  Specific Retention- All Other $1,500,000

  ESTIMATED ANNUAL PAYROLL: $880,000,000

  EXCESS RATE: 0.031

  ESTIMATED AND DEPOSIT PREMIUM INCLUDING TERRORISM: $272,800




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AUTHOTIZATION TO BIND



  EPIC Insurance Brokers & Consultants
  Attn: LaToya Cotton- Robinson, Account Executive
  2405 Satellite Boulevard, Suite 200
  Duluth, GA 30096

  Re: Authority to Bind Insurance Coverage
  DeKalb County School District
  Excess Workers’ Compensation Insurance

  Dear LaToya:

  I have reviewed the following renewal Proposal presented by EPIC Insurance Brokers & Consultants (EPIC) on May 9,
  2023. I am hereby instructing EPIC to bind coverage on behalf of DeKalb County School District with terms and
  conditions as outlined in EPIC’s Proposal.




                   COVERAGE                                    POLICY PERIOD                     PREMIUM
  EXCESS WORKERS’ COMPENSATION
                                                        JULY 1, 2023 TO JULY 1, 2024            $272,800
  $1,500,000 SELF INSURED RETENTION




  ____________________________________________                                     _________________
  Dr. Vasanne Tinsley, Interim Superintendent                                                Date
  DeKalb County School District




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