Seal Beach : Officials Hunting for Liability Insurance

The city last week purchased partial insurance coverage--for negligence by city officials--but is still looking for liability coverage, the city manager said.

The city, which has been self-insured since its policy expired Feb. 1, last week turned down the first price quote it obtained for liability insurance because it was unreasonable, according to City Manager Dan Joseph.

The firm, Cadillac Insurance Co. of Detroit, offered the city $500,000 worth of coverage for an annual premium of $200,000. Last year, the city paid $93,000 for $10 million worth of insurance.

The city has been able to pay $15,000 for $1 million worth of “errors and omissions coverage” from Great American Surplus Lines Insurance Co. of Cincinnati.

The coverage would extend to situations where direct negligence by officials was responsible for a lawsuit, but not many other instances, said Russ Ballard, a spokesman from the city’s broker, Coast Insurance in Brentwood.

The city is also pursuing an application for liability insurance with the Southern California Joint Powers Insurance Authority, a 50-city cooperative based in Los Angeles County, Joseph added.

But a SJPIA representative stated earlier this week that the group will not accept any more applications until it completes a study on the insurance market at the end of June.

Ballard blamed the unavailability of liability coverage on court decisions granting people who sue cities huge sums of money. “It’s a really high risk for insurance companies,” he said.

Joseph said the city will continue to be self-insured if it does not obtain coverage.