How is State Agency Property Covered 22106

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How is State Agency Property Covered?2/21/06
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Property Self-Insurance Policy Manual

• Definitions
• Exclusions
• Optional Coverage
• Conditions for Payment

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Types of Self Insurance Coverage

• Property
• Basic Coverage

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Property Overview

• ORS Chapter 278 provides authority for the state
  (DAS-RM) to pay, through the Insurance Fund, its
  cost to restore property needed for the operation
  of the state.
• The Insurance Fund is meant to
  reimburse for accidental loss, not
  to substitute for an agencys
  duty to prevent and reduce loss
  or to maintain good repair.

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• In the past, the Insurance Fund was adequate to
  allow a high level of discretion in covering
  losses. However, the fiscal crisis facing the
  state demanded changes to maintain the solvency
  of the Fund.
• As a result, the basic property policy and
  special plan coverages were revised in April
  2004. In some cases coverage was expanded to
  address broad changes in agency practice. To
  balance expanded coverage, other coverage has
  been restricted.

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Basic Coverage

• Property self-insurance policy pays for all
  direct physical loss or damage to property owned,
  rented or leased by the state unless the loss is
  excluded or limited in the policy manual.
• Basic coverage also includes Equipment Breakdown
  Coverage. This is a broad protection that pays
  the costs to replace rebuild or restore covered
  equipment damaged or destroyed by a
  covered accident.

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Basic Property Coverage Snapshot

• Agency Deductible
• Basic Coverage 1,000 or 2,500
• Equipment Breakdown Coverage 25,000
• SIR
• Basic Coverage 1.5 million, except
  earthquake and flood - 4 million
• Equipment Breakdown Coverage 100,000 for
  regular equipment breakdown and 250,000 for
  scheduled electrical generating equipment.
• Agencies with more than 20 Legislatively
  Approved Budgeted FTE pay 2,500, agencies with
  less FTE pay 1,000. Effective 7/1/02.

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• Additional Commercial Coverage Limits
• Excess Coverage 400 million
• Equipment Breakdown Coverage 100 million for
  regular equipment, and 5 million for scheduled
  electrical generating equipment
• Claim Filing Deadline 90 days

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Types of Self Insurance Coverage

• Property
• Special Plan

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Special Plan Coverage

• Coverage for certain items or perils excluded
  in the basic property coverage.
• Agency must annually elect special plan coverage
  on their Annual Risk Report.
• No cost to choose a special plan.
• Two optional coverage choices available.
• Losses are rolled into property risk charges.
• Special plans include requirements that must be
  met to qualify for payment of a loss.

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• Special Plan for Money Securities
• Pays losses to cash, negotiable papers, and
  securities, at reported specific locations.

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• Money Securities
• Snapshot
• Agency Deductible 5,000
• Coverage Limits 750,000 for each loss at any
  location or building.

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• Special Market Plan for Exceptional Items
• Pays for repair, restoration, or loss, up to
  market value for loss to artwork or other
  exceptional items.

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• Exceptional Items
• Snapshot
• Agency Deductible 1,000 or 2,500
• Coverage Limits 50,000 per item, 250,000 per
  occurrence.
• Agencies with more than 20 Legislatively
  Approved Budgeted FTE pay 2,500, agencies with
  less FTE pay 1,000. Effective 7/1/02.

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Agency Responsibilities Basic Coverage/Special
Plans

• There are certain conditions for payment that
  agencies must follow to insure property coverage
  for its exposures. Major areas include
• Annual Risk Report
• Reporting Property Values
• Loss Control Plans
• Reporting Losses
• Other

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• Annual Risk Report
• Agencies must report property values to trigger
  coverage reporting does not guarantee coverage.
• DAS-RM claim adjusters will use agency reported
  values for loss settlement
• Effective March 2007
• Special Plan coverage must be chosen
  each year.
• Equipment Breakdown Coverage Newly acquired
  locations must be reported to DAS-RM within 120
  days.

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• Reporting Property Values
• Agencies must separately report all real or
  personal (single items or collection) property
  valued at 1 million or more.
• Agencies must report the property that belongs to
  anyone other than the state for which it has
  agreed in writing to be
  responsible for loss or
  damage.

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• Loss Control Plans
• Agencies must maintain and follow verifiable,
  written loss control plans, as follows for
• Real or personal (single items or collections)
  property valued at 1 million or more.
• Effective March 2007
• Special Plan Coverage
• Equipment Breakdown Coverage

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• Reporting Losses
• Report a loss to covered property no later
  than 90 days after you discover it.
• Report all crashes in commercially rented
  vehicles regardless of the value of the damage.
• Other property losses under the agency
  deductible are not reported
  to DAS-RM.

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• Other
• Purchase a Limited Damage Waiver at the time of
  rental for commercially rented vehicles used
  solely for official state business.
• Inspection of boilers and machinery.
• Conditions of Payment - Special Market Value Plan
  for Exceptional Items requires a written
  agreement, appraisal and inventory.

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Types of Self Insurance Coverage

• Property
• Employee Dishonesty

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• Employee Dishonesty Policy Overview
• Reimburses state assets lost through any
  verifiable fraudulent or dishonest act by state
  officers, employees, or agents.

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Employee Dishonesty Coverage Snapshot

• Agency Deductible 5,000 (1,000 or 2,500 if
  loss control in place prior to loss which, if
  followed, would have minimized the loss.)
• SIR 350,000
• Additional Coverage Limits Commercial bond of
  20 million
• Agencies with more than 20 Legislatively
  Approved Budgeted FTE pay 2,500, agencies with
  less FTE pay 1,000. Effective 7/1/02.

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• Claim Filing Deadline 90 days
• Other
• Considered property loss - risk charges.
• Employee Unfaithful Performance not covered.
  Special bonds are purchased for specific key
  positions as required by law.

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The End