San Juan County approves renewal of property and casualty insurance with Travelers

SAN JUAN COUNTY — The San Juan County Commission voted March 24 to renew the county’s property and casualty insurance package with Travelers, choosing that carrier over a competing quote from the New Mexico Counties Insurance Authority after staff presented a side-by-side comparison of premiums, coverage forms and follow-up costs.

Cynthia Singleton, who introduced the renewal recommendations to the commission, said the package covers property, equipment, contractors’ equipment, general liability, employee benefits liability, law enforcement liability and umbrella limits and that the county was seeking competitive pricing across lines except workers’ compensation.

Nate (broker) presented the premium comparison and said the Travelers package premium presented to the commission totaled $2,143,426 while the insurance authority’s quoted total was $2,857,779, noting the difference in pricing and coverage form. "Travelers this year was $2,143,426... compared to the insurance authority's total of $2,857,779," he said.

The staff summary distributed to commissioners listed a working estimate of the county’s overall premium package at roughly $2,384,320 after adjustments; staff said the figure could shift as staff finalized small underwriting changes before the policy period began.

The commission’s decision rested in part on three items that staff highlighted: (1) Travelers issues coverage on an occurrence form (claims reported later are covered if they occurred during the covered period), while the insurance authority used a claims-made form that would require additional "tail" coverage for continuity; (2) the insurance authority’s proposal included a one-time capital adequacy payment estimated at $307,967; and (3) law-enforcement liability pricing and deductible options differed materially between the two quotes.

On law-enforcement liability, staff said the insurance authority’s quote for the line was approximately $1,600,000 while Travelers’ quote was approximately $986,000. Staff explained that the county had moved to a $250,000 deductible because of rising reserves and claim activity; historically the county’s deductible had been $50,000.

Staff also described a collateral requirement associated with the Travelers renewal tied to the increased deductible. Treasurer Carol Talby and county staff including Mike Stark and Joe Sawyer were reported to be working on collateral options; staff said the county expected to meet Travelers’ collateral requirement by using a letter of credit, and that work was in progress with minimal expected impact on the county budget.

Staff called out several other line-item developments: adding more than 20 Magee Park buildings to the county’s flood schedule, adding six radio towers valued above $400,000 each to the property schedule, and obtaining full physical (hull) coverage for the county helicopter. Staff also reported a reduction in the cyber-liability premium for a $3 million limit, which staff said declined from "over $90,000" last year to about $69,200 this year after IT and carrier risk-mitigation work.

Staff cautioned commissioners that switching carriers could create a need for tail coverage on claims-made policies; for the insurance authority quote staff included an estimate that three years of tail coverage for law enforcement, general liability and property could cost the county nearly $1,000,000.

Commissioners moved to approve the Travelers renewal as presented (including the $250,000 deductible on law-enforcement liability). A commissioner made the motion and another seconded; the chair called for a voice vote and said, "All in favor? Aye. Opposed? Hearing none, motion carries." No roll-call tally was provided in the public minutes.

Commissioners and staff thanked Singleton, county staff and the local broker for the comparative presentation and the work to secure coverage.