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Madison County probes cyber-liability underwriting after premium jump tied to revenue definition
Summary
Commissioners questioned an insurer's use of gross revenue (which includes pass-through state funds) in underwriting, which may have inflated cyber-liability rates; staff will ask the underwriter to clarify the definition of 'revenue' before the policy renewal deadline on July 1.
During the work session, commissioners and staff pressed the county insurance coordinator to confirm how an insurer defines "revenue" on the application used for cyber-liability underwriting. Staff explained that large pass-through state funds — such as school property-tax distributions that flow through county accounts — can inflate a gross-revenue figure that does not reflect county-controlled operating revenue, and that using the inflated number could raise premiums unnecessarily.
Commissioners asked staff to request a written underwriting definition from the insurer and to negotiate whether the underwriter will use a narrower revenue figure (the component remaining in the county treasury) for premium calculations. Staff said they will pursue clarification with the underwriter and attempt to resolve the question before the policy expiration date (July 1).
Separately, staff reported a three-year renewal for certain coverages totaling $8,160, a $199 increase from the prior term, and said airport property/liability renewals will be placed on the consent agenda for approval. Staff also flagged an urgent property-schedule renewal item that must be processed before July 1.
Why it matters: Counting pass-through funds as county revenue can materially affect insurance underwriting and premium cost. The board asked staff to resolve the underwriting definition quickly to prevent avoidable premium increases.
No formal insurance binding occurred during the work session; staff will communicate underwriting clarifications to the insurer and report back to commissioners.
