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MVRMA Renews Property Coverage
- Michael Hammond
In what has been described as a difficult and
deteriorating commercial property market, MVRMA completed a successful
renewal of its property and boiler & machinery coverage with the Public
Entity Property Insurance Program (PEPIP), effective July 1, 2006.
The claims associated with the catastrophic property
events of the 2005 hurricane season had a profound impact on the
availability and cost of property insurance. Even though these hurricanes
directly impacted only the gulf coast area, their aftermath resulted in
rising insurance costs and reduced capacity across the country.
The cost of this event to the insurance industry was
huge – an estimated $60 billion! This total is more than twice the
previous high, which occurred after Hurricane Andrew in 1992 and cost
around 25 billion in today’s dollars. A costly event of this nature tends
to drive up the cost of reinsurance provided by insurers that specialize
in catastrophic perils and higher excess property layers. As the capacity
of reinsurers becomes constricted, the cost of insurance increases. Based
on the reduction in capacity, many experts projected commercial property
rates would increase by a minimum of 10% and upwards of 25% or even higher
in the affected areas.
Beginning in 2005, MVRMA partnered with PEPIP
USA, the proprietary public entity property insurance program of Driver
Alliant Insurance Services (DAIS). DAIS also serves as MVRMA’s insurance
broker.
PEPIP is designed to protect pools and public
entities and has been the leading program for DAIS for more than 15 years.
It is considered the largest public entity property insurance program in
the world. PEPIP provides property insurance coverage in 28 states.
Even though the PEPIP program does not insure
property with coastal exposures, DAIS faced a difficult challenge when
their marketing department and underwriting partners diligently sought to
renew coverage on July 1, 2006. Their goal was to provide the most
comprehensive policy form available at an affordable price.
Last year, when the 2006 MVRMA budget was prepared,
staff estimated a 10% increase in the property rates for the July 1, 2006
renewal. The amount budgeted was based on Total Insured Values (TIV) of
$828,980,562. This TIV was approximately 9.7% higher than the previous
year as a result of adding new buildings and increasing appraised values
for existing structures.
For the July 1 renewal, DAIS was able to secure the
very favorable rate of $0.357 per $100 property value, which is
approximately 10.9% higher than the expiring rate. The overall loss limit
was reduced from $1 billion to $350 million per occurrence. However, this
loss limit is nearly three times the total insured value of our largest
member. Additionally, there was a reduction in the flood limit from $25
million to $20 million per occurrence and annual aggregate.
Even though the property insurance rates
increased for the 2006-2007 renewal period, they are still well below the
rates charged by MVRMA's previous carrier. In 2003 and 2004, MVRMA paid
approximately $.06 per $100 property value for a policy with a loss limit
of $100 million/occurrence.
MVRMA is pleased with the efforts of DAIS in
obtaining renewal terms for its property program under challenging market
conditions. By offering PEPIP USA, we can provide a comprehensive property
program for our members at a favorable rate.
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- Surdyk, Dowd & Turner
Whitfield v. City of Dayton
According to the Second District Court of Appeals’
recent Whitfield decision, Ohio police officers cannot be the
proximate cause of an accident which occurs during the course of a high
speed chase unless the chasing officers’ actions were outrageous or
extreme. 1 Whitfield v. City of Dayton, 2nd Dist. No. 21072,
2006-Ohio-2917.
On the evening of August 16, 2002, two Dayton police
officers engaged in the high speed pursuit of a motorist through the
streets of Dayton. The pursuit began when the motorist fled from a police
officer performing a traffic stop. When the motorist sped off, the police
officer followed and was soon joined in the chase by a second officer.
According to observers, the vehicles reached speeds in excess of fifty
miles per hour through urban and residential streets. At that time, the
Dayton Police Department had a pursuit policy which prohibited officers
from engaging in vehicular pursuits unless the pursuit involved a felony
and the felony "involved an actual or threatened attack against another
person which the officer has reasonable cause to believe could result in
death or serious bodily injury." According to the Department, the policy
was issued out of concern for the safety of officers and citizens.
Although the pursuing officers argued that the motorist’s erratic driving
constituted a threat of death or serious bodily injury, it was clear that
they undertook the pursuit in violation of the policy. In fact, the
officers were disciplined for engaging in the pursuit.
While fleeing the Dayton officers, the motorist ran
several stop signs. In the process of running the last stop sign, the
fleeing motorist collided with another vehicle, killing the driver of that
vehicle and injuring the passenger. The passenger and the estate of the
driver filed a lawsuit in Montgomery County alleging that the fatal
accident was proximately caused by the police
officers’ high speed chase. The officers argued that
they were immune as they were on an emergency call at the time of the
accident and as their conduct was not wanton, reckless or willful. The
trial court granted summary judgment, finding that the officers were on an
emergency call and that, although questions of material fact remained as
to whether their conduct was reckless or wanton, the officers were not the
proximate cause of the accident and thus could not be found liable.
On appeal, the Second District upheld the trial
court’s decision and their reasoning has important implications for future
police cases for several reasons. First, utilizing the standard set forth
in the Ohio Supreme Court’s Colbert v. Cleveland decision, the
Whitfield Court agreed that the officers were on an emergency call at
the time of the accident. The Whitfield Court noted that, officers
are "clearly on emergency calls * * * if they witness illegal activity and
are pursuing the alleged wrongdoer." Both the appellate court and the
trial court reached this decision despite the fact that supervising
officers had testified that the pursuing officers were NOT on an emergency
call.
Secondly, the Whitfield Court clarified the
definitions of reckless, wanton and willful. The Court found that wanton
and reckless can be used interchangeably and noted its agreement with the
Tenth District’s Hunter decision rejecting the interpretation of
"wanton" as using "any" care, including merely having lights and sirens
activated. Rather, courts must engage in a more substantial analysis and
consider a number of factors including applicable departmental policy.
Yet, regardless of the definitions applied by the trial court, the
Whitfield Court found that the question of whether the officers were
wanton or reckless should have been left to the jury. The appellate court
noted "whether particular acts demonstrate the presence of wantonness,
recklessness, or merely negligence is normally a decision for a jury,
based on the totality of the circumstances."
On a more positive note for the ultimately
determined that whether the officers were wanton, reckless or willful did
not matter because they were not the proximate cause of the crash. The
Court noted that "since there must always be a causal connection between
disputed conduct and an injury, a plaintiff would have to satisfy
proximate-cause requirements even if an officer’s conduct is wanton or
reckless." The Second District reluctantly found that Ohio courts
Bland rule which
precludes a proximate cause finding against police officers for injuries
resulting from a crash between a pursued vehicle and a third party so long
as the officers’ actions were not extreme or outrageous (and, of course,
assuming no direct contact between the police vehicle and the other
vehicles.) As the Whitfield Court noted, it is exceptionally
difficult to meet the standard for extreme and outrageous conduct. To be
extreme and outrageous, conduct must essentially be "utterly intolerable
in a civilized community." As the pursuing officers’ conduct could not be
fairly described in this manner, their conduct was not extreme or
outrageous and they were entitled to summary judgment.
Given the Whitfield Court’s stance on
proximate cause, plaintiffs will clearly have difficulty surviving summary
judgment in similar cases.
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- Craig Blair
Historically, industry wide, the leading causes of
auto accidents are backing and rearend collisions, both of which are
considered "preventable." However, other types of accidents also fall into
this category. In response to feedback at the 2005 Strategic Planning
Retreat, MVRMA's claim codes were changed to include other preventable
accidents (i.e., hitting parked cars and stationary objects, sliding off
roadways, damaging others’ property while doing work for the city, etc.).
Over time, this data can be used to guide training programs and possibly
provide support for SPEC results.
A recent review of MVRMA’s claims data revealed the
following:
l Since 2000, more
than 40% of all auto and general liability claims fell nto "preventable"
accident
categories.
l Since the new coding
was instituted in 2005, more than 60% of all claims fell into
"preventable"
accident
categories.
In fact, MVRMA’s two largest claims in the last six
years were "preventable" accidents. One was caused by a driver of a city’s
transportation department who backed into a pedestrian he had been
dispatched to pick up. The second one was caused by a city driver who
turned from a stopped position and struck a pedestrian in the crosswalk.
Unfortunately, some of these "preventable" accidents
will continue to occur, but we can’t ignore our findings. The recent
claims analysis emphasizes the impact these preventable claims are having
on MVRMA's loss reserves. Through training, we can hopefully reduce the
number and severity of preventable accidents. MVRMA's Loss Control Manager
is available to assist any member city who would like to design a safe
driving program.
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Confined Spaces - Are They a Danger in
Your City?
-Starr Markworth
A confined space is a space that is large enough for
a person to enter, has a limited means of entry or egress and is not
designed for continuous human occupancy. Confined spaces in public works
include but are not limited to: water and sewer pipes, pumping stations,
manholes, meter vaults, tunnels, tanks, wastewater wet wells, crawl spaces
under floors, trenches, water reservoirs, holding tanks and pits.
The hazards associated with entering and performing
work in confined spaces are capable of causing bodily injury, illness and
death to involved workers. Both atmospheric and physical hazards may exist
in confined spaces. Hazardous atmospheres include the lack of sufficient
oxygen or the presence of toxic vapors such as hydrogen sulfide or
explosive vapors such as methane. Atmospheres that are safe one minute may
become fatal the next. Physical hazards in confined spaces include
mechanical and electrical sources, or entrapment or engulfment by solids
or liquids.
Accident statistics suggest that about 60% of deaths
in confined spaces resulted from oxygen deficiency and lack of air quality
testing. More than half of those who died in confined spaces did so while
trying to rescue their fellow workers.
A National Institute of Occupational Safety and
Health (NIOSH) publication "Worker Deaths in Confined Spaces" describes
the fatalities of 480 workers between 1983-1993. Many of these fatalities
involve public works employees. They include:
l A wastewater treatment plant
supervisor who died entering a manhole that was deficient in oxygen. A
second supervisor attempting a rescue also died in this incident.
l A meter reader who died due to toxic
methane and carbon monoxide in a meter vault
l A police officer and two sewer
workers who died attempting to rescue another sewer worker overcome by
sewer gas at the bottom of an underground pumping station. The sewer
worker who was overcome also died.
Working in confined spaces presents a safety hazard
each time entry is required. The keys to keeping employees safe are
training and atmospheric testing of the spaces.
Please watch for the announcement publicizing our
fall Confined Space Entry seminar and plan to send all employees who would
benefit from this training.
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Property Time Element Coverage
Under MVRMA’s property insurance coverage, there is
an expectation that structures damaged by covered perils will be repaired
or replaced. However, MVRMA’s property program also provides coverage for
loss of Business Income and Extra Expense in addition to coverage for
direct damages. These coverages are sometimes referred to as Time Element
coverages.
Business Income insurance provides recovery for the
revenue stream of a structure from the time the structure is damaged from
a covered peril until repairs or replacement can be completed. The revenue
stream can take many forms, such as rent or lease receipts, tuition in the
case of schools and loss of production value in the case of a
manufacturing facility. While most municipal structures do not generate
revenue, some of the exceptions for MVRMA members could be structures that
charge for parking, sports stadiums, office structures that are rented out
to commercial tenants and smaller exposures such as rent receipts from
special events from local community rooms. You should be able to determine
the business income exposure for your city by reviewing the non-tax
revenue portion of your income statement and identifying any income
generated by city owned structures. MVRMA’s coverage document covers up to
$500,000 per occurrence for Business Income exposures or values that are
not reported on the schedule of values. If you have a structure that
generates more than that level of income, the revenue should be scheduled
on the statement of values and factored for the amount of time it will
take to rebuild the structure.
As stated earlier, most municipal structures do not
have associated revenue streams but still require alternate arrangements
in the event of damage. In these cases, replacement acilities of some sort
are necessary in order to continue city operations and services. The
additional facilities will require extra expenses in order to carry on
city business. The extra portion of these expenses is covered by the Extra
Expense coverage provided by MVRMA’s property program. Extra Expense is
automatically covered for all structures listed on the schedule of values
up to $40,000,000 per occurrence.
While the MVRMA coverage document will provide the
necessary funding for Extra Expense losses, it is still up to each member
to provide the advance planning necessary to determine potential
replacement facilities in the event of a large loss. Advance planning may
identify existing commercial facilities that could be leased or rented in
the short term or might include the identification of parcels of land
where portable structures could be temporarily situated. With proper
advance planning and the necessary financial support, large property
losses, while still very disruptive, can be addressed with as little
turmoil as possible to city operations and services.
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As part of the Safety Awards Program, each member city is asked to
submit a nomination for the Special Achievement Award. This award
recognizes a special program or activity related to risk management,
safety or loss prevention. The 2005 recipients are the City of
Miamisburg's "Stay Alive! Don't Talk & Drive Program" and the City of
Wyoming's "Public Access Defibrillation Program." An excerpt from each
nomination is included. For more detailed information, we encourage you to
contact each city directly.
City of Miamisburg's Stay Alive! Don't Talk & Drive Program
T he City of Miamisburg's Safety Team developed a campaign to
remind employees to keep their focus on driving, and not other things,
while operating city vehicles. Through a comprehensive program of
educational opportunities including Senior Staff meetings, management team
meetings, departmental safety meetings, division safety meetings, and
through City Safety Team representatives, employees were reminded to "Stay
Alive - Don't Talk and Drive." Posters using the Stay Alive logo developed
by the City Safety Team were distributed throughout the city during the
month of November 2005 (See Page 5). A flyer was included in paychecks
during that month, and an article on the subject was included in the
November issue of the employee newsletter "The City Pulse." As a measure
of the program's effectiveness, no accidents have been recorded by city
employees as a result of cell phone usage since the program was initiated.
As noted in the employee newsletter, driving can be difficult enough
even when you concentrate completely on the road. But driving while you
dial a phone or balance it to your ear while conducting an intense
conversation can be distracting and potentially dangerous. Drivers
distracted by cell phones are a danger to themselves and everyone on the
road. If it becomes imperative that a phone call happen while driving,
city employees should follow these procedures:
l Pay attention to the road; remember that safe driving
is the priority, and not the phone call!
l Assess the current traffic situation before making or
receiving any calls. DO NOT answer or dial the phone when driving in
hazardous conditions.
l Whenever possible, pull over to the side of the road
before beginning a cell phone conversation, or wait until you have reached
your destination.
l Don't use the cell phone for social visiting while you drive.
l Become familiar with your phone by reading the manual and
learning how to use the available features. Frequently called numbers can
be stored within the phone's memory to minimize dialing while driving.
City of Wyoming's Public Access Defibrillation Program
In early 2003, the Public Safety Committee of the Wyoming City Council
discussed a series of articles in USA Today that dealt with the
successful use of Automatic External Defibrillators (AEDs) in several
communities and major airports across the United States. In September of
that year, the Committee recommended a 5-year program that would place
AEDs within easy access to citizens and city employees in buildings owned
by the city. Toward this long-term goal, the Committee obtained an initial
commitment of $5,000 from the City Council. Subsequently, a suggestion was
made to expand the program to include all places of public assembly (city
owned facilities, school district buildings and private places of assembly
including houses of worship and recreational facilities).
Fire Chief Rielage determined 22 AEDs would be needed in order to place
one in each city owned building, police cruiser, fire apparatus and staff
vehicle. It soon became apparent that a project of this magnitude would
require significantly more funds from grants or donations, as well as a
public education campaign to raise the awareness level of both citizens
and the private sector.
With a commitment from the City Manager, Chief Rielage arranged for two
of the fire department's EMS instructors to provide CPR/AED training to
every city employee and shortened the program from five to three years in
order to heighten the sense of urgency among the citizens. With help from
the local media, the project gained momentum.
By midyear 2004, the city was able to equip all fire and police
vehicles and all city owned buildings. The Wyoming School Superintendent,
Dr. Charles Waple, indicated the school district would pursue its own
funding from the Parent Student Association and/or federal and state
education grant programs. To date, seven of the eight houses of worship
have purchased AEDs, and the remaining church is expected to purchase a
unit in 2006.
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The Safety Awards Program was designed to recognize
MVRMA members and individual departments with low losses in any given
year. Each May, the Awards Committee meets to determine the Risk
Management/Safety Award winners for the loss year completed the previous
December. The overall award is given to the city with the lowest dollar
losses per full-time employee. For 2005, the winner is the City of
Madeira, which as of 3/31/06, had $0 losses! After a first place
finish in 2003, the City of Montgomery was runner up in this
category for the second straight year. Montgomery had losses of $33.90 per
employee.
Department winners are determined by the zero-loss
department with the most employees. However, when there are no zero-loss
departments for a specific category, the winner is determined by the
department with the lowest dollar losses per full-time employee.
The department winners for 2005 (all with zero
losses) are:
Police - Springdale
Fire & EMS - Wilmington
Water & Wastewater -
Sidney
Parks & Recreation -
Beavercreek & Springdale
Streets & Refuse -
Centerville
As part of the Awards program, MVRMA also recognizes
the Safety Performance Award departments, those departments with three or
more consecutive zero-loss years. This year's recipients are:
Police: Montgomery (3 years)
Fire: Tipp City (5 years), West Carrollton
(4 years)
Water & Wastewater: Vandalia (12 years),
Mason (3 years)
Parks & Recreation: Madeira (11 years),
Montgomery (5 years), Wilmington (3 years), Wyoming (3
years)
MVRMA would also like to recognize this year's
Award of Excellence recipients, those cities with 50% less than the
"expected" average dollar losses per employee ($100 or less). This year's
recipients are listed later in this issue.
MVRMA appreciates the great loss control efforts of
the 2005 winners as well as all the unnamed departments that had zero
losses in 2005! Although only the winning departments will receive
plaques, all the zero-loss departments will receive individual
certificates and a celebration of their choosing.
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