Travis County Commssioners Court
December 23, 2003
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Item 27
There was an item regarding insurance, and that is 27 a, consider and take appropriate actions related to property and boiler/machinery insurance, a, approve or decline purchase of coverage for acts of terrorism.
>> I’m the assistant purchasing agent. Judge action Commissioners, we issued a request for proposal of insurance coverage for property and boiler/machinery insurance. And we got back one response. And alliance has been suggested as the carrier for that. And I believe that was approved this morning in consent on item b. The one thing this did leave us with is an option to take coverage concerning terrorist acts. And we're looking for the court's guidance as to whether to approve on or decline that coverage.
>> the recommendation of our risk manager is to?
>> is to reject the coverage.
>> that would be my motion.
>> second.
>> could we discuss this? Thank you, judge. Could you tell me why you're basing your decision to recommend to not to have the terrorist coverage?
>> first of all, there are two reasons. The first is that within the area of Travis County, mainly the campus where most of our exposure is, as extraordinary security both provided by the sheriff's office, by the Texas department of public safety and city of Austin police department, our security in the area is very high. The risk of loss based on the coverage for this type of insurance is somewhat low. There are certain criteria that has to be met in order for this coverage to kick in. For instance, it has to be an act of terrorism, it has to be an act that is dangerous to human life and property. It has to be -- the conditions have to be certified by the secretary of state, secretary/treasurer in concurrence with the attorney general of the united states. There are a number of different criteria that have to be met. I'll give you an example. The murrah building in oklahoma city would not be covered by this insurance.
>> it would not be covered?
>> it would not be covered because it wasn't initiated by a foreign agent at the direction of a foreign person or a government. And just with the restrictions that have to be me here, we didn't feel it was worth the premium. We didn't feel the exposure was high enough.
>> do we have any idea on what other governmental entities are doing? Say in this type of property coverage of terrorist insurance coverage on their particular facilities, are they doing anything? We've got the state and the city, of course, we're the county. Are any other governmental entities doing -- what are they doing?
>> my understanding is the city is rejecting the coverage. I can't speak to the state. Last year when this came up we did canvass some of our colleagues throughout the state, and most have rejected the coverage. Some weren't even offered the coverage by their carriers. This year we did not canvass those same entities to see what they were doing.
>> what would that amount of premium be to get that type of coverage?
>> [inaudible - no mic].
>> we just got this then.
>> I believe it's about $32,000.
>> about 32,000.
>> I think it's 32.
>> okay. And for that --
>> I’m sorry, it was $25,928, and the non-certified would be 6,000, so it's right at $32,000.
>> [inaudible - no mic].
>> even in the new york situation, a lot of that was damage to private property in terpz of most of the damage -- in terms of st of the damage that occurred there. And some of the stuff was related to the port authority, and it wasn't the city of new york. So it would have to be something very specific to only a county building that would be caused here. Not necessarily whether something yucky could happen here in Travis County. It is to Travis County-owned facilities.
>> and I guess that's my point. That's why I’m kind of concerned. Not to say that wouldn't preclude any terrorist act to be -- to happen to Travis County. I mean, it could happen anywhere. Anyway, that was your recommendation, not to do that? But i've got some mixed feelings about it as far as the insurance premiums.
>> motion and a second. To approve the recommendation to deny the insurance offered. Any more discussion? All in favor? Show Commissioners Sonleitner, Gomez, Daugherty and yours truly voting for the motion. Abstaining, Commissioner Davis.
Last Modified: Wednesday, December 24, 2003 7:26 AM