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Gray County board renews property, liability and workers'comp insurance; staff warns of much larger deductibles
Summary
Board approved renewal of the district's property, liability and workers' compensation insurance. Finance staff said premiums rose and the policy's deductible structure has changed to a percentage basis for major buildings, which could expose the district to large out-of-pocket costs after a catastrophic loss.
The Gray County Board of Education on June 24 approved renewal of the district's property and liability package and its workers'compensation insurance after a presentation from district finance staff outlining premium increases and a change in deductible structure.
Treasurer Melanie DeMott reported the district's overall property/auto/umbrella premium increased by $45,595 compared with last year. Staff also said the insurer moved to percentage-based deductibles for major buildings: a 1% deductible is now applied to the insurer's value of a covered building rather than a flat per-location deductible.
Finance staff gave an example from state valuation figures: for a building valued at $65,000,000, a 1% deductible would be $650,000. Staff warned a catastrophic storm affecting multiple large buildings simultaneously could leave the district with combined deductibles in the high hundreds of thousands to about $1 million.
The district also reported a workers'compensation increase of about $23,000. Staff said the cost to buy down deductibles to a lower level would be substantial; one cited buy-down estimate was roughly $90,000 to lower a deductible to $100,000 for a single location.
Board members asked technical questions about the change and whether the district should continue buying down deductibles in the future. Staff recommended accepting the renewal and retaining cash reserves to cover potential increased deductible exposure.
The board moved and approved the renewal. Administration said they would monitor claims experience and revisit buy-down discussions at future budget reviews.
