The Town of Minto plans to investigate options for municipal insurance coverage.
At the July 16 meeting, council directed staff to prepare a report on the possibility of making the municipality’s 2014 insurance renewal subject to a request for proposals.
Minto has been insured with the Frank Cowan Company, which specializes in municipal insurance, since amalgamation in 1999. The coverage is brokered through Minto-based Larry Grummett Insurance.
In a report to council, CAO Bill White noted there are “no service concerns that would require the town to proceed to proposal,” and the town’s purchasing bylaw does not require the service proceed to tender unless it is determined necessary by the management team.
However, White stated that since the town’s purchasing bylaw is under review, council is being asked to provide direction.
The town’s 2013 insurance premium was increased by about $7,000 over 2012, to $249,925 for coverage that includes $20 million in liability coverage per occurrence.
White pointed out the town’s premium is comparable to other municipalities of similar size, with similar facilities and service.
“While competition can lead to a better price, in the past a lack of viable alternatives limited options,” he explained.
However, he noted, “with recent changes to coverage in Guelph Eramosa and Wellington North, it appears there are options in the market to be considered.”
White listed three known alternate providers of municipal services: Jardine Lloyd Thompson, BFL Canada and the Ontario Municipal Employment Exchange (OMEX).
The report notes Wellington North awarded insurance coverage to Jardine Lloyd Thompson in 2013 and saved $69,000, while Guelph Eramosa switched to BFL in 2012, saving $80,000 over their previous carrier.
White’s report explained the town considered separating its general carrier from brokerage services in October of 2012 and passed a resolution stating, “when a call for proposals is considered, that brokerage fees not be quoted separately,” and directed staff to bring back a report on whether a call for proposals should be considered in 2014.
Councillor Mary Lou Colwell noted that “a fair bit of staff time” would be involved in preparing for and dealing with requests for proposals.
Councillor Ron Elliott cautioned against getting involved with “reciprocal” insurance programs.
“You can see in dollars and cents that they did save money in some of those quotes, but be careful of what you save,” he said, noting that some organizations offer reciprocal programs, meaning members contribute to a pot of money for paying claims and “if that pot’s gone then you will pay, you will put money back in to build that pot back up.”
Elliott suggested bringing in an outside expert to explain the type of insurance coverages being offered.
White agreed an independent expert could be utilized to help prepare the RFP and explain it to council before calling for quotes.
Mayor George Bridge agreed the town should avoid getting involved with reciprocal insurance programs, but said he felt it was worthwhile to look into options.
“I think our current provider has done an excellent job, but it’s pretty hard not to look at it and at least review it,” Bridge said.
Council directed White to bring back figures on the potential cost to go through the process of calling for proposals on insurance coverage.
