City Hears Presentation From South Dakota Public Assurance Alliance on Coverage, Deductibles and Cyber Risk

Lynn Brennan, executive director of the South Dakota Public Assurance Alliance, told the Beresford City Council on Aug. of the Alliance's structure, coverage and member services and left a formal quote packet for the city to review. "We are a pool. We are not commercial insurance," Brennan said, explaining that members' contributions fund claims, loss control and risk management services provided to local governments across South Dakota.

Brennan said the Alliance offers blanket property coverage with no coinsurance clause and conducts on-site property appraisals within the first 90 days to five years thereafter; the pool also applies an inflation-guard between appraisals. She said the pool quoted the city a $5,000 per-occurrence deductible for buildings and contents and provided a comparison showing a $1,000 deductible would increase the city's contribution by about $8,600 annually. "It's about $8,600 more to bring all your buildings and contents down to a thousand dollar deductible," Brennan said.

The nut graf: The briefing matters because the city faces recent storm repairs and is shopping renewal options; switching from a commercial carrier to a risk pool would change the city's deductible profile, claims handling and access to pooled services such as law-enforcement training and a government-practices hotline.

Most important details first: Brennan said the Alliance writes liability (including public-officials errors and omissions and employment-related coverages) under a single governmental liability agreement, and auto liability under a separate document. The pool's standard cyber protection is a $500,000 aggregate with a $15,000 deductible; Brennan warned, "it's not a matter of if you're gonna have a cyber attack, it's a matter of when you will get a cyber attack," and she urged use of available education and Secure South Dakota resources. The Alliance also offers an "enhanced crime" blanket (covering employees, appointees and elected officials) with a $1,000,000 limit that Brennan said can substitute for a finance officer bond if state statute and local limits allow; the quoted premium for the $1,000,000 crime limit was $67 per year.

Brennan described how large losses are handled: the pool retains a self-funded amount (she cited $1.5 million per occurrence for wind and hail) and purchases reinsurance above that retention; claims are managed locally by Claims Associates and the pool coordinates with reinsurance carriers as needed.

Councilmembers asked whether the city's unique status as an internet-service provider affects cyber coverage; Brennan said not at present and added the pool would consult its carrier if an unusual exposure were identified. Council members also asked how a single $5,000 per-occurrence deductible would apply if many of the city's locations were hit in one event; Brennan said the per-occurrence deductible applies once across all locations for a single catastrophic event and that the blanket limit is the most the pool would pay for a single claim impacting all scheduled properties.

The presentation included outreach and loss-control benefits: law-enforcement training, employment- and government-practices hotlines that can waive employment-practices deductibles if counsel advice is followed, and periodic property valuations. Brennan said the pool serves roughly 500 members, including 64 of 66 counties and 198 of 311 incorporated municipalities.

Council next steps: Brennan left a written quote packet for the council to review and offered to return with detailed numbers; she invited the city to contact the pool's member services staff or Claims Associates with questions.

Ending: The council did not decide on a carrier during the meeting; members asked staff to review the packet and to continue discussions on deductible choices and how the pool's services would fit the city's needs.