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Beresford council hears detailed pitch to move insurance to state pool; officials urged to weigh retro coverage
Summary
A representative from the South Dakota Public Assurance insurance pool briefed the Beresford City Council on coverage options, quoting a base package and explaining tradeoffs between occurrence-based and claims-made coverage, retroactive options and likely deductibles. Council did not take a final vote but asked staff and counsel to follow up.
A representative of the South Dakota Public Assurance Insurance Pool told the Beresford City Council that the pool offers coverage written specifically for South Dakota public entities and outlined key differences between occurrence-based and claims-made policies.
"Occurrence-based coverage means the type of coverage that is in effect at the time a loss happens is the policy that responds," the pool representative said, and contrasted that with "claims-made coverage," which responds based on the policy in effect when a claim is made and may rely on a retroactive date. He described retrofit options the pool can offer and said the packet included quotes for retroactive coverage options.
The presenter gave the council a price for the pool's package "for coverage going forward" as presented in the meeting materials and discussed sample deductibles: a single per-occurrence property deductible example used in the presentation was $5,000 (the presentation also noted vehicle and equipment deductibles). He compared the pool's presented quote with figures the council had received from the city's incumbent carrier and said the pool's base package in the packet was lower than the other quote.
Council members asked about statutory limitations and long-tail exposures (for example, civil-rights or certain abuse/neglect claims) that may have reporting periods differing from state tort statutes. The pool representative advised councilors to consult the city attorney and suggested the council consider retroactive coverage or an extended-reporting period to capture unknown or not-yet-reported claims.
He also described the pool's reinsurance structure and the availability of retro-coverage in one- and two-year options and multiple limit choices for retro coverage. "If you add the retro coverage, that's going to be a one-time payment that you would make this year," he said, and asked that the city determine whether it wanted to purchase retro coverage when deciding whether to join the pool.
The council did not vote at the meeting on switching carriers. Several council members asked staff to follow up with the city's insurance agent, Jensen, to obtain any outstanding pricing for extended-reporting options and to bring a recommendation (including legal-review points) back to a future meeting or to the executive session the council planned to hold at the end of the night.
Next steps: staff was asked to coordinate with Jensen and the city attorney on retro/extended-reporting options, confirm the final written quotes, and return to council with a recommendation.
