Decision details

To consider a report of the Risk and Assurance Manger detailing considerations relating to the placement of the Council’s Corporate Insurance Programme in line with powers set out in the Council’s Officer Scheme of Delegation and the Council’s Financial Procedure Rules.

Decision on placement of the Council's Corporate Insurance Programme which needs to be in place on 1st April 2015. The previous programme, which was entered into on 1st April 2010 is due to expire on the 31st March 2015.

(i)  That the Chief Financial Officer selected the most appropriate corporate insurance programme from 1st April 2015 taking into consideration:

(a)  the response from the insurance market to the tender exercise (Appendix 1) noting the ‘deductible options’;

(b)   the outcome of the tender evaluation exercise (Appendix 2); and

(c)  the document summarising the options and impact in respect of internal self-insurance provision (Appendix 3); 

1.  To ensure continuity of insurance cover in terms of having appropriate and adequate financial protection for the Council to support and enable current and future service delivery, and that funds are available to pay for insurable losses using the most cost effective sources of finance.

2.  The aim is to achieve the optimum balance between self-insurance and external insurance, with the latter intended primarily to protect the Council against the effects of a catastrophic loss and to limit the Council’s financial exposure in any one period.  The approach seeks to smooth the cost of risk and minimise year on year fluctuations.

1.  To self-insure all losses (i.e. discontinue all external insurance covers).  External premium spend would be reduced to zero however all future claims, including any catastrophic losses, would be required to be met from internal funds. It would not be prudent for the Council to operate on this basis as it would create an unquantifiable future financial risk. 

2.  The Council is seeking a 3 year ‘long term agreement (“LTA”), with the option to extend for up to a further 2 years, as opposed to a straight 5 year deal.  This is intended to provide the Council with flexibility noting that the LTA does not ‘hold’ insurers in terms of premium rates and if they consider that the risk is deteriorating and/or there is a general market adjustment of rates then they will seek to increase premiums accordingly. 

None.