The last adage Betsy Kutska would apply is "leave well enough alone" to the Park District Risk Management Agency's insurance program.

The pool's insurance program-a combination of member deductibles, self-insured retentions, commercial property coverage, commercial excess liability and reinsurance coverages as well as various specialized coverages-is constantly evolving.

"I think there's always improvements to be made," said Ms. Kutska, executive director of PDRMA. "We're always looking to make things better."

For example, last year Ms. Kutska negotiated with General Reinsurance Corp. to reduce the pool's self-insured retention for general and auto liability to $1 million from $3 million while maintaining the total per occurrence limit at $6 million. The additional coverage increased the pool's premiums only $28,200.

In addition to reducing the pool's liability, this change also resulted in loss funding savings of approximately $650,000.

However, instead of being satisfied with her accomplishment, Ms. Kutska pursued another avenue that resulted in the pool enjoying significantly higher limits and saving money.

Earlier this year, Ms. Kutska headed an effort by a group of government risk pools to create an excess liability insurance purchasing group (BI, Feb. 3). Five pools, including PDRMA, created the National Public Entity Excess Program, a multi-year facility offering members up to $20 million in limits, excess of $1 million.

So instead of the $6 million limits in general, auto and employment practices liability the pool previously had, as of Jan. 1 PDRMA members have $21 million per occurrence limits for these liability coverages.

Furthermore, the pool saved $26,781 in premiums for the coverage.

Ms. Kutska noted that her earlier efforts to reduce the pool's SIR were not in vain. "I had no assurance that the national program was ever going to come around," she explained. "We didn't expect that we were going to be able to get substantially higher limits and save gobs of money."

And, the reduction in the pool's SIR "enabled us to go to the market in an even stronger position."

Ms. Kutska isn't done yet. She is spearheading an effort to form an excess property insurance purchasing group for government risk pools along the lines of NAPEX. The group is still in the early stages of discussions.

Ms. Kutska explained that her philosophy for the pool's insurance program is to take advantage of soft markets when they exist and simultaneously create the financial resources and loss control policies that will enable PDRMA to self-insure completely if market conditions change significantly.

"I have kind of a multi-year strategy," she commented. "We're positioning ourselves to have the flexibility if and when the insurance market changes" to completely self-insure if necessary.

As of Jan. 31, PDRMA had a $17.5 million surplus. The organization has $31.4 million in assets and $13.9 million in liabilities, including reserves for unpaid claims, incurred but not reported claims and accounts payable.

PDRMA maintains a $1 million self-insured retention for general and auto liability coverage and public officials error and omissions coverage. Members are not responsible for a deductible for general or auto liability incidents; however, members are responsible for a $5,000 deductible for the public officials E&O coverage.

Third-party liability insurance includes coverage for premises operations, product and completed operations, independent contractors, contractual liability, automobile liability, athletic participation, host and liquor liability, watercraft liability, employee benefit liability, law enforcement liability and civil rights.

PDRMA also offers employment practices liability coverage. The pool maintains a $250,000 self-insured retention and has coverage written by Princeton, N.J.-based American Re-Insurance Co. for $750,000 per occurrence excess of the $250,000 retention. The excess policy has a $2.5 million annual aggregate for all members. Members are responsible for a $5,000 deductible for employment practices liability incidents.

NAPEX provides excess liability coverage for general, auto and employment practices liability and public officials E&O coverage.

Under NAPEX's program, Reliance Insurance Co. of Illinois, a unit of the Reliance Insurance Group, offers $10 million of coverage per occurrence above the $1 million self-insured retention. An additional $10 million excess of $10 million layer is underwritten by Insurance Co. of the State of Pennsylvania, a unit of American International Group Inc. There is a $10 million annual aggregate per member for public officials E&O coverage.

PDRMA's coverage year runs from May 1 through April 30, concurrent with its fiscal year.

On the property side, PDRMA offers members a comprehensive all-risk property and boiler/machinery insurance program written by Arkwright Mutual Insurance Co. Each member assumes a $1,000 deductible while the pool maintains a $100,000 per occurrence and a $350,000 annual aggregate self-insured retention.

The policy is written on a blanket basis for replacement cost and covers buildings, building contents and open property; vehicles and mobile equipment; trees, shrubs and golf course tees and greens; watercraft and docks; animals; fine arts; electronic data processing equipment, valuable papers and accounts receivables; builder's risk; business and service interruption; expediting expense, extra expense, de-contamination expense and architectural fees.

The policy also: covers floods and earth movement up to $50 million per occurrence; provides employee blanket bond of $1 million; covers E&O for failure to report new property of up to $5 million; covers property in transit up to $500,000; and provides automatic coverage for new property acquired by members during the coverage year and not specifically scheduled of up to $5 million.

Arkwright writes a separate policy for fidelity and crime coverage for the pool. The policy covers losses exceeding PDRMA's self-insured retention of $9,000 per occurrence, up to an annual limit of $1 million. Again, members are responsible for a $1,000 deductible.

PDRMA offers workers compensation coverage written by Gen Re with an annual limit of $10 million, excess of the pool's $300,000 self-insured retention. Employer's liability coverage of up to $1 million also is available through Gen Re. Pool members do not have a workers compensation deductible. Fireman's Fund Insurance Co. provides coverage to statutory limits.

PDRMA self-insures auto physical damage; members are responsible for a $1,000 deductible.

PDRMA paid total premiums of nearly $1.2 million for the 1996-1997 coverage year. This includes $225,000 for general and auto liability coverages, $151,385 for employment practices liability coverage, $638,173 for property coverage and $145,563 for workers compensation coverage.

PDRMA offers members several specialized insurance programs.

For example, PDRMA members with underground storage tanks can take advantage of a new insurance program the pool now is offering. The environmental impairment liability coverage, written by Commerce & Industry Insurance Co., an AIG subsidiary, offers limits of $1 million per location and satisfies federal requirements. The program covers third-party liability and cleanups resulting from tank leaks.

Self-funded volunteer medical and accidental death and dismemberment coverage is available for members with no deductible. Medical expenses of up to $5,000, excess of any other collectible insurance, are covered; the AD&D benefit also is $5,000.

Self-funded public officials surety bonds also are available for members with no deductible. The surety bonds are available with limits ranging from $10,000 to $500,000.

St. Paul Surplus Lines Insurance Co. writes owners and contractors protective liability insurance for construction projects with a limit of $5 million per occurrence and aggregate. Members are not responsible for a deductible.