300-65
RISK MANAGEMENT PROGRAM

POLICY & PROCEDURE

Subject

RISK MANAGEMENT PROGRAM

Index: Human Resources & Risk Management

Number: 300-65 (replaces 210-03)

Effective Date

06-01-2001

Supersedes

12-12-88

Page

1 of 4

Staff Contact

Michael R. Webby

Approved By

Jesse Tanner

1.0 PURPOSE:

The purpose of this policy is to describe the City of Renton's risk management program.

2.0 ORGANIZATIONS AFFECTED:

All city departments and employees.

3.0 REFERENCE:

Policy & Procedures 300-38, 700-02, 700-03, 700-05, 700-06, and 700-09.

4.0 POLICY:

It is the expressed intent of the City of Renton to establish and operate a comprehensive risk management program which protects municipal assets in as expeditious and cost-effective manner as possible. Specific objectives include the following.

4.1    Minimize municipal risk and exposure wherever possible.

4.2    Provide the broadest insurance protection reasonably available.

4.3    Finance the cost of risk at the lowest possible level through a combination of education, risk retention and risk sharing.

4.4    Establish and operate an aggressive internal safety program wherein each city employee is aware of potential risk exposures and is accountable through the organization for losses the city might incur.

4.5    Establish and operate an aggressive employee wellness program which will increase employee health while helping to reduce medical premiums and payments.

4.6    Wherever possible and practical, continually transfer city liabilities to the other party to the contract and take steps to assure that party is adequately insured.

4.7    Avoid the interruption of city services to the community as a result of accidental losses.

4.8    Establish a "firm, but fair" policy of handling claims brought against the city.

5.0 DEFINITIONS:

For the purpose of this statement of policy, several terms are defined below:

5.1    Claims Coordination: The Human Resources Department is responsible for processing all claims brought against the city.

5.2    Risk Management Program: A comprehensive plan, including procedures, insurance coverages, funding mechanisms, safety programs, contractual liability transfer programs, all of which are combined and coordinated to both protect Renton against unexpected losses and provide a sound financial base for funding routine exposures.

5.3    Risk Manager: The individual responsible for managing all insurance-related matters. The Human Resources & Risk Management Administrator is the designated risk manager.

5.4    Risk Retention: The dollar amount of risk assumed by the city.

5.5    Risk Sharing: Transfer of risk to other entities either by purchasing coverages or executing appropriate hold harmless agreements.

5.6    Self-Insurance: Assumption of the cost of losses incurred by the city.

5.7    Self-Insured Retention: A large deductible paid by the city.

6.0 PROCEDURES:

6.1    Risk Management Program Structure

6.1.1    The city has adopted a comprehensive risk management program which includes workers' compensation, liability, property, medical and dental.

6.1.2    This risk financing program includes elements of insurance and self-insurance. The property, casualty, worker's compensation and employee benefits, excluding life and disability insurance are self funded. The City purchases excess insurance to provide catasrophic protection in the self funded programs. The City manages the major self funded programs with the support of third party administrators, insurance borkers and professional risk management service providers.

6.1.3    Coverage limits, deductible levels and claims procedures shall be recommended by the risk manager and approved by the city Council.

6.1.4    The "Insurance Fund" has been established to account for insurance financial activity. The fund charges using departments an insurance premium amount as if it were an independent insurance company. In return for that premium amount, the fund will insure departments against loss and be responsible to pay all covered claims on behalf of using departments.

6.2    Claim and Incident Reporting

6.2.1    Workers' Compensation Claims - Please refer to Policy 300-38 for detailed instructions as to how workers' compensation claims should be reported.

6.2.2    Accident or Property Loss Claims - As soon as is practical after an accident, the appropriate accident report form should be completed and forwarded to the claims coordinator. For auto and truck-related accidents, complete Form G-112R (tan). Also complete Form 10F-28 (Vehicle Accident Report). For all other accidents, complete Form G-113R (blue). In the case of loss or damage to city property, complete Form G-220R (gold). In all cases, the forms must be completed as carefully and accurately as possible with attention to detail. Information reported will be vital in determining how a claim is adjusted and/or paid and what the city's exposure may or may not be.

6.2.3    Medical and Dental Claims - These claims and coverage limits will be submitted in accordance with the plan booklets available in the human resources department.

6.3    Responsibilities

6.3.1    Human Resources & Risk Management Administrator - It is the responsibility of the Risk Manager to (1) ensure the city is properly protected against losses; (2) work with brokers to secure any property/casualty or employee coverages needed by Renton; (3) audit and monitor broker and claims services; and (4) recommend coverage changes and premium levels to the City Council.

6.3.2    Human Resources & Risk Management Administrator - It is the responsibility of the Human Resources & Risk Management Administrator to ensure employee orientation and education regarding city safety programs, (medical and dental plans), accident and claim reporting requirements, compliance with state workers' compensation self-insurance laws, and other areas as might involve education or orientation of employees regarding proper use and utilization of the city insurance program. The Human Resources & Risk Management Administrator is also responsible for the establishment and operation of the city Safety Committee and Accident Review Board.

6.3.3    City Attorney - It is the responsibility of the city attorney to maintain a continual awareness of claims filed against the city and to provide legal counsel and/or legal defense as might be appropriate. The city attorney is also responsible for the review of contracts the city may enter into to ensure hold harmless and subrogation clauses are included where appropriate.

6.3.4    Other Department Administrators - Other department administrators are responsible to:

6.3.4.1    be aware of the structure of the city's insurance program;

6.3.4.2    actively promote the benefits of an aggressive safety program to minimize losses paid directly by the city from its Insurance Fund;

6.3.4.3    recommend coverage changes or modifications wherein insurance coverages are not felt to be adequate or special coverages are required;

6.3.4.4    aggressively pursue the assignment of risk to parties the city is contracting with wherever possible and reasonable;

6.3.4.5    report claims as soon as possible. Investigate claims as indicated or requested;

6.3.4.6    review monthly the claims loss experience reports which will be provided under the new program and take corrective action where loss patterns appear to be developing;

6.3.4.7    maintain a general sense of awareness of the risk exposures the city has and the potential high cost of lawsuits that may be being experienced by public entities here and everywhere.

6.3.5    City Council - Approve coverage limits, deductible levels and internal premium changes.

6.3.6    Employees - All employees are required to be aware of city safety programs, accident and incident reporting procedures, hazard reporting procedures, and to be cognizant of the necessity to minimize the risk of loss involved in all city operations.

6.4    Contractor Insurance Requirements

6.4.1    Prior to issuing bid calls for professional consulting services the contracting department shall request a liability coverage level from the City's risk manager.

6.4.2    The level shall normally be $1 million but may be waived or increased, depending on the size and scope of the project.

6.4.3    In consultation with the city attorney the risk manager may issue a hold harmless agreement in favor of the contractor if the contractor posts professional liability insurance at a level twice that required by the risk manager.

6.4.4    All coverage and insurance certificates shall be issued on forms specified by the city.