After Jefferson City Public Schools' initial plan for insurance coverage of its two high school projects fell through, the district's Board of Education voted Tuesday to go with a second option that could save more money.
Given the scope of the district's projects to build a second high school and renovate the existing one, JCPS earlier had opted to use a "wrap-up" insurance product that bundles insurance coverage and places liability on either the projects' owner or general contractor.
The board voted 6-1 at its November meeting to use the former type of wrap-up that places the burden of liability with the owner - the owner-controlled insurance program, or OCIP.
Travelers Insurance was to have provided the general liability and workers' compensation coverage for the OCIP package the board approved to use, but the company later pulled out entirely from offering such products.
That left the district to search for another OCIP provider, and Chief Financial and Operating Officer Jason Hoffman found a potentially more beneficial insurance package through insurance broker Willis Towers Watson.
Liberty Mutual now will provide workers' compensation coverage, and The Navigators Group Inc. will provide general liability coverage. Navigators, Chubb Limited and Everest Re Group Ltd. will provide excess liability coverage.
The deductible for Travelers Insurance's package had been $250,000 for general liability and workers' compensation, but with the new Liberty-led package, the deductible for workers' compensation is only $25,000.
This means the district is shielded more from unexpected losses. At a 100 percent loss, the district would be liable to pay $47,076 more than what it would have to pay with the contractor-controlled insurance program option. The original Travelers plan approved in November would have put the district at risk to pay $364,423 more than the CCIP alternative in the event of a total loss.
The new Liberty plan's break-even loss percentage is 92.3 percent, compared to the previous plan's 71.3 percent.
Hoffman also projected the new plan could save up to $526,058 compared to traditional coverage without any kind of wrap-up - also better than the previous plan.
Hoffman said the board voted 5-0 in support of the new plan Tuesday morning. Board President Steve Bruce and Vice President Rich Aubuchon were absent, but Hoffman said both expressed support of the plan to him.