City selects new worker’s comp insurance to save $75,000
The city of Stevens Point has selected a new liability insurance program for worker’s compensation claims against the city from the Cities and Villages Mutual Insurance Company (CIVMIC), a specialized insurance company that primarily serves municipalities in Wisconsin.
“CIVMIC was formed in 1987 by 25 communities from the state of Wisconsin, all 25 members are still in the program, and now we’re up to 46 strong. Originally, we offered just liability insurance – which included general liabilities, auto liability, public official’s liability, law enforcement liability and incidental malpractice – up to $5 million, and we have another proposal up to $10 million. In 1998, we started a work comp program,” said Mike DeMoss, executive director of CIVMIC.
“We are primarily a risk management organization that provides insurance. We’re owned by municipalities, our Board of Directors are all public sector administrators,” DeMoss said.
Corey Ladick, Stevens Point comptroller/treasurer, said CIVMIC came highly recommended by other financial officials for municipalities across the state.
“We reached out to them because of recommendations, and we started this process looking for a third-party administrator for our work comp program,” said Ladick.
“(CIVMIC) made a proposal on that, there was also another company who made another proposal. CIVMIC’s proposal was cheaper, and the other thing that we looked at is the fact that they focus exclusively on cities and villages in Wisconsin,” Ladick said.
A large part of CIVMIC’s worker’s comp services include training staff and guiding administration on better and safer workplace practices to lower the number of claims as well as protecting the city from large claims.
Ladick said he recommended going with CIVMIC partly for that reason.
“Especially now that we’re looking at not just paying claims, not just writing checks, but preventing losses and figuring out the best way to run a police department, a fire department, a water department or the department of public works,” he said. “We really felt that having an insurance company that focused on the issues of cities and villages could really be useful for Stevens Point.
“Another thing that I’ve heard very positive reviews about from other finance directors is that they offer a lot in the way of training, even things like new supervisor training. Part of that is to cover certain liability issues if your people are trained correctly, but it’s also professional development as well,” Ladick said.
“We do a lot in the areas of risk management, in the OSHA areas, but also have programs in management development, supervisory development and pre-supervisory development,” said DeMoss. “We also provide lots of resources that relate to critical policies police departments may need and rick assessments for communities. We’ll actually sit down with the department heads if you join.”
“I would also note that because they are simply owned by other municipalities … we’re not paying any insurance agent a commission, which is a savings for the city,” he said.
“I think this is a great fit, being that they represent municipalities and are built off municipalities,” said Jeremy Slowinski, District 6.
Additionally, by joining CIVMIC, the city positions itself to save $75,000 annually.
While the deductibles are higher than the city’s previous insurance provider, the money saved could potentially cover the deductibles with some left over.
“The savings of switching to CIVMIC are a little over $75,000. Now there’s a bit of a caveat to that, there is a difference in our deductibles,” Ladick said. “So, for instance, our general liability would go from no deductible to a $25,000 deductible … so you do see an increase. However, we are saving $75,000.
Ladick said after looking at the claims 2008 from 2013 and averaging the claims, the city would have paid about $35,000 a year would they have been with CIVMIC during that time.
“OK, $32,000 that we’d be paying extra versus saving the $75,000. That certainly suggests this is a good deal financially,” Ladick said.
Ladick also set up an insurance reserve fund for the $75,000 savings to be used for the claim deductibles.
He said it’s impossible to predict how many claims there could be each year. However, judging by previous years, the $75,000 will cover the deductibles and could potentially have a positive balance each year.