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Committee forwards insurance bid package after debate over cyber coverage
Summary
Risk management presented property/casualty bids that collectively reduce premium versus last year; commissioners debated whether to pay ~$78,250 for primary cyber insurance (1M limit) or self-insure; committee approved forwarding the risk-management recommendation to purchasing and commission.
Rutherford County's Budget, Finance and Investment Committee on May 7 received a risk-management briefing and voted to forward the benefits-and-insurance committee's recommendations on property and casualty coverage to purchasing and the full commission.
Risk management summarized the preferred package with total premium about $5,197,238, a decrease of roughly $366,517 from the prior year. The package increases total insured property exposure from roughly $2.6 billion to $2.9 billion and added an environmental insurance line. Committee materials showed bids and deductible options; staff noted some bids were disqualified where required coverages (for example, uninsured motorist coverage and certain bus coverage) were excluded.
A substantial portion of the meeting centered on an optional cyber-liability policy: the recommended primary cyber policy had a $78,250 premium for $1 million of coverage with a $100,000 self-insured retention. Risk staff and IT officials described ancillary benefits of the policy (monitoring, incident response coordination and breach support) and noted the county previously had a cyber incident for which the policy reimbursed part of the expense. OIT deputy Cody York told the committee the county has made significant cyber-security investments over several years but said the county is targeted frequently and that an incident could be far more costly than a $1 million limit.
Commissioners discussed trade-offs: buying $1 million of cyber coverage for $78,250 versus higher limits (a $5 million option was discussed at roughly an additional ~$90,000 premium) or using budgeted funds to harden systems. Michael (finance staff) and risk staff said the recommended $1 million option represented a middle ground given current reserves and the county's assessed risk; committee members agreed to forward the package (with the option-level question flagged for purchasing and budget staff) to the full commission. The motion to accept the insurance committee's recommendation carried on a roll call vote with all commissioners recorded as yes.
