Dunkirk’s insurance carrier explains policy

The city, as well as most property owners, carries insurance to cover its assets. The city also carries liability insurance to cover a variey of possibilities and people.

Common Council’s Finance Committee received a briefing on the policy and some of its intricacies Monday from Lawley Tradition partner Walter Gotowka and account manager Sue Polichetti.

Committee chair Michael Michalski gave a rundown on what the committee was interested in, which was pretty much everything the policy covers. The city currently pays a total of $286,121 for coverage. That cost includes $76,210 for commercial property; $66,529 for general liability; $37,894 for law enforcement liability; $36,853 for commercial excess liability; $25,093 for commercial automobile liability; $21,465 for commercial automobile physical damage and $19,140 for public officials liability.

Gotowka ran through the details of the policy as presented in a handout to the committee.

“We start with the general liability and there’s a $1 million per person, or per claim, with a $6 million aggregate,” he began. ” … There’s all sorts of bells and whistles that come with the liability policy. … That covers any public official; common council members, councilman-at-large, the mayor and so forth. … It covers your EMTs. It covers your water utilities management down there. If someone were to name a particular official who works for the city, … there’s coverage in the public officials liability.”

He added law enforcement also has the $1 million and $6 million coverage.

“It covers a lot of things. Wrongful arrest, false imprisonment, things like that, civil rights,” Gotowka explained. “It’s a very broad liability.”

Auto liability is also covered for $1 million.

“It’s a $1 million per person. We have also included an uninsured or underinsured motorist for $1 million each in the event that they are involved in an automobile accident,” he said, adding that it covers city workers against injury from underinsured individuals.

The list of 70 city-owned vehicles and the city’s property list that Lawley has will be checked for accuracy.

A total of nearly $60 million is the city’s coverage for property it owns and a list was included in the council handout from the insurance company. Councilwoman-at-Large Stephanie Kiyak asked if that included the city’s water and wastewater treatment plants and wanted to know how the number was arrived at.

Polichetti said it was ascertained by an industrial appraisal that is updated regularly while Fiscal Affairs Officer Richard Halas said he would have to notify Lawley once the work on the water treatment plant is done.

Kiyak then asked if the policy covers replacement costs for the treatment plants. Polichetti replied it was the amount of money assigned to the property that determines the value for insurance purposes.

“If something happened to it and we had to rebuild at $40 million, how do we end up with that difference?” Kiyak asked.

Gotowka said it was a good question and that’s why meetings are needed.

“The city also has been cognizant of costs so when you talk about premiums, do we want to insure that for $40 million?” she asked. “If it burns down or has a total loss to it and the city’s insured for $17 million, that’s what the city is going to get.”

Polichetti said funds are generally available through other governments in the event of a catastrophic loss.

“You wouldn’t necessarily always insure everything. … You have to allocate the dollars the best place possible. … Maybe we need to get rid of some of the other properties that have outlived their usefulness that we wouldn’t rebuild,” she explained. ” … Maybe our total covers that $60 million, and we don’t really increase our costs, we just reallocate where those costs are going; to the more important assets.”

Polichetti added previous Finance Committees were not ready to make those decisions.

“Everybody would agree in principle but nobody would want to say, ‘Yes, let’s do that.’ … I think it’s really important to finish this up.”

Gotowka said his firm had no qualms about making suggestions but it would be up to the committee and council to make the final decisions. He added the city carries another umbrella policy for $4 million, in addition to its liability coverage.

“It’s an important part. If someone gets hurt or sues the city, I don’t know what the dollar amount the city feels comfortable with, but … one of the most important features to a policy is the umbrella portion of it,” he added.

Polichetti explained insurance companies don’t want to pay out more than 50 percent of premiums in claims.

“Over the years the city has had a tremendous amount of claims,” Gotowka added. “There’s still a lot of activity. I don’t know if all those claims come to the common council.”

Michalski asked what percentage of claims were paid.

“Your loss ratio is actually very good,” Polichetti replied. “I would say that for municipalities your size you were better. I would not say that you’re the best, only because you have to deal with older properties, you have to deal with older equipment, so you’re not as attractive as a municipality that has brand new stuff.”

Gotowka said the firm covers over 90 municipalities with a good portion of time spent answering coverage questions.

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