County’s liability insurance remains in hands of CORSA

When trying to operate a county government, there are certain things which must be taken care of, and can be costly, but in the end, are absolutely necessary. Liability insurance is one such item, and trying to find the best carrier for an entire county’s government is never an easy task.Despite several key changes, the pluses and minuses in the County Risk Sharing Authority (CORSA) contract added up to what Eric McDowell of McDowell Insurance, who was hired by the county to assume responsibility of CORSA negotiations, said would be a wash. Therefore, the county will continue to pay approximately what it has in the past for CORSA benefits.McDowell and CORSA representative Ginny Shrimplin met with the commissioners recently to discuss not only the current state of affairs between the county and CORSA, as they prepare to renew the ongoing contract, but also the county’s desire to seek other options as a way of cutting insurance costs.“We have been extremely happy with the way we have been treated by CORSA, and with the costs involved, but with the way the economy is right now, we have to check out every option,” said Commissioner Joe Miller.“It does not hurt to go out and check into what the market is bearing,” added Commissioner Rob Ault. “It’s just good business, even if we don’t find anything better.”CORSA was established by the County Commissioners Association of Ohio (CCAO) in 1987, when traditional liability insurance for counties was either unavailable or unaffordable. The program is governed by a nine-member board of trustees, which consists of commissioners from member counties. CORSA is administered by and for counties, to meet the unique and changing needs of county government. As of January 2008, CORSA has 62 member counties and 19 multi-county facilities. With a 20-year track record of providing broad coverage, stability, financial strength and comprehensive risk management services to its members, CORSA has done an excellent job of servicing Holmes County. However, with money tight, it doesn’t hurt to explore possible options.“We actually welcome our county members to check around,” said Shrimplin. “This isn’t the first time we have had a county check into other options, and we want to know that we are offering the best possible structure available. We have always managed to match up pretty well against other options.”Shrimplin said that three Ohio counties checked into other options in 2009, and all three stayed with CORSA.The circumstance which initiated the county’s search into other possible options is the impending renewal of the current agreement, which includes everything from liability coverage on the sheriff’s office, public official liability, transportation, wrongful termination, sexual harassment and more.McDowell said he checked with several commercial carriers that were capable of covering entire county governments, something that few carriers do, and that there were few options available. He noted that Traveler’s Insurance and Selective Insurance Company replied, but neither could match the complete package of services CORSA provides.“It was the same response from everyone,” said McDowell on his investigation. “It was always, ‘we can’t cover this or we can’t cover that.’ The county home was an issue, but the biggest question I heard from everyone was, ‘Why are you guys dropping this?’ They basically said that they have never written a county away from CORSA.”When CORSA began in 1987, Holmes County was one of the first counties to get on board with the program. In order for CORSA to pay claims when it first began, it needed to create bonds. Over the years as the program has built equity, they stopped using the bonds to pay counties. It kept the bond money, but after a number of years, all of the claims which could have arisen and been connected to those initial bonds had expired.That money was there, sitting dormant, so the board decided to give that money back to the counties which had originally participated in CORSA, and set a four-year time period in the form of a credit. 2009 marked the final year of that timetable. The final of four payments at $11,432 each will no longer be refunded to Holmes County.Another issue which has arisen fairly recently is the payment for jail physicians. According to McDowell, it is very difficult for counties to find insurance for jail physicians. “It’s high-risk, and the malpractice market was at its worst, so out of necessity, CORSA stepped to the plate,” said McDowell, “and offered a $1 million policy which would at least keep the doctors in the jails.”McDowell said that market has recently softened, and now, because three of the four largest insurance carriers provide jail insurance for physicians, CORSA no longer feels the need to provide that insurance.“It’s an exposure that the county can get rid of that you really don’t need to have anymore,” said Shrimplin. “And these physicians are general contractors. Our insurance policies don’t even cover general contractors, not that you as a county would want to. Those are people you have no control over, and you don’t want to assume that risk anyway.”What a county pays into CORSA depends largely on the county’s exposure, such as county buildings, payroll expenses, number of deputies and county vehicles. The other factor is the county’s loss history. The money invested will cover up to $1 million in claims, which Shrimplin said covers the majority of the county’s claims. CORSA then purchases additional insurance for anything over that $1 million cap, up to $6 million in coverage.Shrimplin added that one of the larger claims is due to uninsured motorists, in which county employees have an accident with an uninsured party. While workers’ compensation would cover the county employee, CORSA would step in and cover anyone riding with the county employee who would not be covered under workers’ comp.“You can drop that uninsured motorists cost with CORSA if you like,” said Shrimplin, “but you can run into some serious expenses there.” The majority of transports take place within the Holmes County Department of Job & Family Services and the sheriff’s department.Shrimplin also praised the commissioners for their willingness to take full advantage of the risk-management services offered through CORSA, which help county employees and department heads better understand issues such as defensive driving.McDowell said that after checking out other options, he was ready to invest in the CORSA program again, having found no better alternatives. He did look for cost reductions in the CORSA program and found some minor savings. While the actual renewal deadline isn’t until May 1, he said that staying ahead of the game would not leave the county worrying about deadlines.