BH.04.MAR2819.R01 - 2019 Insurance Renewal

Report To: Finance and Facilities Committee, Board of Health

Submitted by: Dr. Nicola Mercer, Medical Officer of Health & CEO

Subject: 2019 INSURANCE RENEWAL

BH.04.MAR2819.R01

March 28, 2019

RECOMMENDATION(S):

(a) That the Finance + Facilities Committee makes recommendation to the Board of Health to receive this report for information.

BACKGROUND:

Wellington-Dufferin-Guelph Public Health (WDGPH) obtains insurance coverage through The Ostic Group Insurance Brokers Limited, in Fergus. Through The Ostic Group, the organization has policies with two (2) insurance companies:

1) Comprehensive insurance policy through Frank Cowan Company Limited covering:

a. liability;

b. crime;

c. board members’ accident and accidental death and dismemberment;

d. volunteers’ accidental death and dismemberment;

e. legal expense;

f. property; and

g. equipment breakdown.

The Frank Cowan Company policy renews on January 1st, annually.

2) Cyber risk policy through Totten Insurance Group Inc.

The Totten Insurance Group Inc. policy renews on October 20th, annually.

PUBLIC HEALTH AND/OR FINANCIAL IMPLICATIONS:

The limits of coverage and deductibles for each area of coverage under the Frank Cowan Company policy are attached hereto at Appendix “1”.

The limits of liability coverage and deductibles for the Totten Group cyber risk policy are attached hereto at Appendix “2”.

The cost of the coverage through Frank Cowan Company totals $104,202. This is a reduction from the 2018 renewal premium of $109,395. Details of cost by area of coverage and comparison with prior year are attached to this memo at Appendix “1”.

The cost of the coverage through Totten Insurance Group Inc. was $7,074 for the policy renewal on October 20, 2018. There was no cost increase from the 2018 policy renewal.

Changes

The major change in the 2019 renewal is a complete re-write of the property coverage representing enhanced coverage. Highlights of these changes can be found at Appendix “1”.

A minor change is the annual inflationary increase to the property replacement values. Frank Cowan uses the inflationary rate from the Statistics Canada Non-Residential Building Index to annually increase the property replacement values.

In addition to these changes, the Shelldale facility was removed from the policy effective July 1, 2018 and the Mount Forest location coverage was reduced from $50,000 to $5,000 effective December 3, 2018 (to cover the equipment in the one clinic room that will continue to be leased).

Options

In addition to changes, any additional options/coverage that may be available to WDGPH are presented as part of the annual review by Frank Cowan and Ostic. The following options were presented for 2019:

1. Liability Limits – higher liability limits are available with respect to liability, errors & omissions, and non-owned automobile policies.

Note – per Frank Cowan Company, the highest liability award, to date, is $18 million, which was a road liability claim involving multiple claimants suing a municipality based on poor signage and road maintenance. This specific risk is not a risk that WDGPH is exposed to, but is an example meant to show that claims costs are rising. Most health units are still carrying $20 million in liability coverage and some municipalities have increased their coverage to $25 million.

2. Crime Coverage – fraudulently induced transfer coverage: covers a loss when an insured under the policy has been intentionally mislead by someone claiming to be a vendor, client or another employee of the company and the insured has transferred, paid or delivered money or securities to this third party.

Note - The Ostic Group has confirmed that WDGPH already has this coverage in place through the cyber risk policy.

3. Cyber Risk Coverage Increase – increase from $1,000,000 to $2,000,000 is available and would be an additional $1,750 per year.

Note - Frank Cowan Company identified that their cyber risk offering may become more affordable in the coming months/years as the market for this coverage begins to mature. When information is received that the cost of the Frank Cowan coverage is comparable with the Totten coverage, a legal review of both policies will be undertaken to compare both options at that time.

Conclusions

1. Liability Limits - The highest general liability claim awarded to date is $18,000,000 for a risk that does not apply to WDGPH (municipal road claim); additionally, Frank Cowan Company has verbally confirmed that WDGPH remains in alignment with the liability coverage carried by other health units. For these reasons, liability coverage at $20,000,000 has been maintained.

2. Crime Coverage - WDGPH already has coverage for fraudulently induced funds transfers through the cyber risk policy with Totten Group. Therefore, the crime coverage option for fraudulently induced funds transfers through Frank Cowan Company has been declined.

3. Cyber Risk Coverage Increase - WDGPH’s Risk Register identifies the risk of information privacy breaches and intrusion into agency information systems as high prior to the controls/mitigation strategies identified as being in place to protect against these risks. After mitigation and controls, residual risk is assessed as low. Therefore, the current level of cyber risk coverage will remain in place for the organization.

APPENDICES:

Appendix “1” – Limits of Coverage and Deductibles, Frank Cowan Company policy

Appendix “2” – Limits of Liabilities and Deductibles for Cyber Risk policy, Totten Group

REFERENCES:

N/A.

Prepared by: Robert Cunnington, Manager, Finance

Reviewed by: David Kingma, Director, Administrative Services

Approved by: Dr. Nicola Mercer, Medical Officer of Health & CEO

APPENDIX “1”

Your Insurance Coverage

Schedule of Coverage

(Coverage is provided for those item(s) indicated below)

Casualty

Coverage Description	($) *Deductibles	($) Limit of Insurance
General Liability (Occurrence Form) Broad Definition of Insured	5,000	15,000,000 Per Claim No Aggregate
Forest Fire Expense	Nil	1,000,000 1,000,000 Aggregate
Errors & Omissions Liability (Claims Made Form) Retroactive Date: 01 January 1982	5,000	15,000,000 Aggregate
Directors’ & Officers’ Liability (Claims Made Form)	5,000	3,000,000 Aggregate
Additional Limit of Liability – Insuring Agreement A (Personal Insurance) only		1,000,000 Aggregate
Non-Owned Automobile Liability		15,000,000
Legal Liability for Damage to Hired Automobiles	500	50,000
Environmental Liability (Claims Made Form)	1,000	1,000,000 2,000,000 Aggregate

*Your deductible may be a Deductible and Reimbursement Clause (including expenses) refer to Policy Wordings

Follow Form – Excess Liability

Coverage Desciption		($) Limit of Insurance
Excess Limit		5,000,000
Underlying Policy	($) Underlying Limit
General Liability	15,000,000
Errors & Omissions Liability	15,000,000
Non-Owned Automobile	15,000,000

Total Limit of Liability ($) 20,000,000

Crime

Coverage Description	($) Deductibles	($) Limit of Insurance
Employee Dishonesty –Form A (Commercial Blanket Bond)		1,000,000
Loss Inside the Premises (Broad Form Money & Securities)		10,000
Loss Outside the Premises (Broad Form Money & Securities)		10,000
Audit Expense		200,000
Money Orders and Counterfeit Paper Currency		200,000
Forgery or Alteration (Depositors Forgery)		1,000,000

Accident

Coverage Description	($) Deductibles	($) Limit of Insurance
Board Members: Persons Insured – Fifteen (15) Board Members and One (1) Ex-Officio Member
Board Members Accidental Death & Dismemberment		250,000
Paralysis		500,000
Weekly Income – Total Disability		500
Weekly Income – Partial Disability		300
Accidental Death of a Spouse While Travelling on Business		Included
Volunteers Accidental Death & Dismemberment		50,000
Paralysis		100,000
Weekly Income – Total Disability		500
Weekly Income – Partial Disability		250

Legal Expense (Claims Made)

Coverage Description	($) Deductibles	($) Limit of Insurance
Legal Defence Cost		100,000 250,000 Aggregate

Coverage Description

($) Deductibles

($) Limit of Insurance

Legal Defence Cost

100,000

250,000 Aggregate

Property

Coverage is on an All Risk Basis unless otherwise specified.

Basis of Settlement is Replacement Cost unless otherwise specified

The Deductible is on a Per Occurrence Basis

Coverage Description	($) Deductibles	Basis	($) Limit of Insurance
Property of Every Description - Blanket	5,000	RC	32,863,450
Property Supplemental Coverage (Included in the Total Sum Insured unless otherwise specified in the wording)
Building By-laws	5,000		Included
Building Damage by theft	5,000		Included
Debris Removal	5,000		Included
Electronic Computer Systems
Electronic Computer Hardware and Media	5,000		Included
Electronic Computer Systems Breakdown	5,000		3,013,800
Electronic Computer Systems – Extra Expense	5,000		10,000
Extra Expense Period of Restoration	5,000		90 Days
Expediting Expense	5,000		Included
Fire or Police Department Service Charges	5,000		Included
First Party Pollution Clean-up	5,000		Included
Fungi and Spores	5,000		10,000
Furs, Jewellery and Ceremonial Regalia
Ceremonial Regalia	5,000		Included
Furs and Jewellery	5,000		25,000
Inflation Adjustment	5,000		Included
Live Animals Birds or Fish	5,000		25,000
Newly Acquired Property	5,000		Included
Professional Fees	5,000		Included
Property and Unnamed Locations	5,000		Included
Property Temporarily Removed Including while on Exhibition and during Transit	5,000		Included
Recharge of Fire Protection Equipment Expense	5,000		Included
Sewer Backup and Overflow	5,000		Included
Public Entity Extension Endorsement (In Addition to the Total Sum Insured unless specifically scheduled in the wording)
Accounts Receivable	5,000		250,000
Bridges and Culverts	5,000		50,000
Buildings Owned due to Non-Payment of Municipal Taxes			Not Insured
Buildings in the Course of Construction Reporting Extension	5,000		1,000,000
By Laws – Governing Acts	5,000		25,000
Consequential Loss Caused by Interruption of Services
On Premises	5,000		Included
Off Premises	5,000		50,000
Cost to Attract Volunteers Following a Loss	5,000		10,000
Docks, Wharves and Piers	5,000		25,000
Errors and Omissions	5,000		Included
Exterior Paved Surfaces	5,000		50,000
Extra Expense	5,000		250,000
Fine Arts
At Insured’s Own Premises	5,000		25,000
On Exhibition	5,000		25,000
Fundraising Expenses	5,000		10,000
Green Extension	5,000		50,000
Growing Plants
Any One Item	5,000		1,000
Per Occurrence	5,000		100,000
Ingress and Egress	5,000		Included
Leasehold Interest	5,000		25,000
Master Key	5,000		25,000
Peak Season Increase	5,000		25,000
Personal Effects	5,000		25,000
Property of Others	5,000		25,000
Rewards: Arson, Burglary Robbery and Vandalism	5,000		25,000
Signs	5,000		Included
Vacant Property	5,000		250,000
Valuable Papers	5,000		250,000
Additional Endorsements
Earthquake – Other Property	5,000		Included
Earthquake – Buildings	Not Applicable		Excluded
Flood – Other Property	5,000		Included
Flood – Buildings	Not Applicable		Excluded
($) Total Amount of Insurance			34,118,450

RC = Replacement Cost ACV = Actual Cash Value VAL = Valued

Equipment Breakdown (TechAdvantage)

Coverage Description	($) Deductibles /Waiting Period	($) Limit of Insurance
Direct Damage	5,000	25,000,000 Per Accident
Extra Expense		250,000
Spoilage		50,000
By-Laws, Demolition and Increased Cost of Construction		1,000,000
Expediting Expense		Included
Hazardous Substances		250,000
Ammonia Contamination		250,000
Water Damage		250,000
Professional Fees		250,000
Civil Authority or Denial of Access		30 days
Errors and Omissions		250,000
Data Restoration		50,000
Off Premises Transportable Object		10,000
Brands and Labels		100,000
Green Coverage		50,000
Environmental Efficiency *Will not show on Declarations Page		Up to 150% of Loss
Anchor Locations		Included
Contingent Business Interruption		25,000
Public Relations Coverage		5,000

Account Premium

Prior Term

Total Annual Premium

(Excluding Taxes Payable)

$100,830

Total Annual Premium

(Excluding Taxes Payable)

$104,202

Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. The premium Quoted is subject to a 15% minimum retained (unless otherwise stated).

INDICATION OF TERMS

REFERENCE NUMBER: WELL-20

COMPANY NAME: WELLINGTON DUFFERIN GUELPH PUBLIC HEALTH

TOTAL PAYABLE: CAD6,550.00

Broken down as follows:

Premium: CAD6,250.00

Fee: CAD250.00

Totten Fee: CAD50.00

COMMISSION: 15.00%

BUSINESS OPERATIONS: Community health service

LEGAL ACTION: Worldwide

TERRITORIAL SCOPE: Worldwide

REPUTATIONAL HARM PERIOD: 12 months

INDEMNITY PERIOD: 12 months

TIME RETENTION: 8 hours

CONTINUITY DATE: 20 Oct 2014

WORDING: Cyber, Private Enterprise (CAN) v2.1

ENDORSEMENTS: None

SUBJECTIVITIES: NONE

POLICY PERIOD: 12 months

DATE OF ISSUE: 08 Oct 2018

ADDITIONAL NOTES: 30% of the Premium and 100% of the Fees are Minimum and Retained Upon Binding

OPTIONAL EXTENDED REPORTING

PERIOD: 12 months

SECURITY: 100% CERTAIN UNDERWRITERS AT LLOYD’S

For the purposes of the Insurance Companies Act (Canada), this document was issued in the course of Lloyd’s Underwriters Insurance Business in Canada. The business insured/reinsured herein meets the necessary conditions to qualify as, and is being transacted as, “insuring in Canada a risk” in accordance with Part XIII of the Insurance Companies

Act (Canada).

THIS INDICATION OF TERMS IS ONLY VALID FOR 30 DAYS FROM THE DATE OF ISSUE

PLEASE REFER TO THE FOLLOWING PAGES FOR A FULL BREAKDOWN OF LIMITS, RETENTIONS AND APPLICABLE CLAUSES

APPENDIX “2”

THE FOLLOWING INSURING CLAUSES ARE SUBJECT TO AN EACH AND EVERY CLAIM LIMIT:

INSURING CLAUSE 1: CYBER INCIDENT RESPONSE

SECTION A: INCIDENT RESPONSE COSTS

Limit of liability: CAD1,000,000 each and every claim

Deductible: CAD0 each and every claim

SECTION B: LEGAL AND REGULATORY COSTS

Limit of liability: CAD1,000,000 each and every claim