Board continues coverage with TRICOR Insurance Inc.

PLYMOUTH – School Board members voted unanimously Tuesday to continue their coverage for property, liability, crime, auto, umbrella and workers’ compensation insurance with EMC Insurance, supplied through the TRICOR Insurance Inc. agency, Plymouth, for the 2010-11 school year.

Board President Mark Rhyan and board member Tim St. Clair were absent from Tuesday’s meeting.

The total premium cost of the premium with TRICOR, which has been the district’s insurance carrier since 1994, is $180,164.

The Indiana Insurance Group, supplied through Maritime Insurance Group, Plymouth, had submitted a lower total premium bid of $177.973, or $2,191 less than the EMC Insurance bid.

However, John F. Gibson, TRICOR’s vice president, public entity specialist, certified insurance counselor and certified school risk manager, was present at the meeting, along with Scott Flood and Terry Abler, business accountants and vice presidents of Plymouth’s TRICOR agency, to address the board.

Gibson explained that when he had examined the Indiana Insurance Group bid, something jumped out at him. It had to do with the educators’ legal liability, a synonymous term for errors and omissions.

“The errors and omissions provides coverage for damages filed by a third party,” Gibson informed The Review Wednesday. “Some examples would be employment-related issues such as wrongful termination, harassment claims and due-process claims.”

In reviewing the Indiana Insurance bid, “I noticed they put a retroactive date on the errors and omissions/educators’ legal of July 1, 2005,” Gibson informed the board Tuesday. “A lot of these claims from school districts come in from many years prior to that. So that would be a significant coverage hole.

“With EMC there is no retroactive date, as long as the claim is within the statute of limitations,” Gibson said.He noted that his agency recently handled a school district employee harassment claim involving an incident that occurred about 10 years ago.

Jon Miller, the district’s manager of business services, said that in his 16 years in school district business management, he had worked with both agencies.

“With a $2,000 difference, it’s six of one and half a dozen of the other,” he said. “Both of these are local agents and have offices in the school district.

Board member Pam Holzhaeuser asked Miller whether there was any difference in the service provided by the two agencies.

“It was almost the same,” Miller answered. Flood addressed the board briefly. “We think we have a superior product,” he said.

Superintendent Clark Reinke said the district has had excellent service with TRICOR.

Board member Sally Isely said she appreciated the effort of the TRICOR representatives to be present at the meeting.

Board member Jerry Prahl agreed. “I appreciate that explanation of the retroactive date,” he said.

The Review contacted School Board members Wednesday, regarding their decision to vote for the company with the higher bid, in light of the district’s tight budget and board members’ efforts to save money.

“Although the TRICOR bid was more, it benefits the district to have the errors and omissions out there for a longer time,” Holzhaeuser said. “Indiana only went back five years.”

Isely agreed. “My vote was based mainly on what John Gibson explained about people being able to come back and sue us,” she said. “Indiana only went back a few years.”

As for Prahl, “John Gibson’s explanation swayed me that way,” he said. “You never know. One mistake could cost the district thousands of dollars. Everything is so uncertain these days.”

Board member Sue Feick said, “We had discussed the policies at length at the Committee of the Whole meeting, and the potential of the liability that a claim could cost the district.

“If someone came back with a claim that happened prior to five years ago, that could cost a lot for the district.”

Board member John Klemme echoed the feelings of his fellow board members. “The coverage difference between the two policies left us hanging,” he said. “We felt it was not worth the risk of voting for the company with the lower bid.”