Jury verdicts against local governments and settlements in the millions of dollars continue to hike liability insurance rates for Kent and other cities.<\/p>\n
Kent’s annual premium will jump 21% in 2023 to $1.37 million from $1.14 million in 2022, city risk manager Chris Hills told the Kent City Council last month. That’s an increase of $230,000 in the annual payment to Safety National, a St. Louis, Missouri-based insurance company.<\/p>\n
The policy covers the city for up to $25 million. Kent would pay the first $1.25 million toward any total amount of settlements or jury verdicts this year with insurance picking up the rest. That’s the same price as the 2022 rate.<\/p>\n
“We’re dealing with inflation, economic and also social inflation, which is jury verdicts of multi-million dollars and we are seeing multi-million dollar settlements,” Hills said in a Jan. 17 report to the council’s Operations and Public Safety Committee. “It affects insurance rates because that’s where the money comes from. There’s more of these lawsuits and the settlements get bigger.”<\/p>\n
Councilmember Zandria Michaud asked how the city’s policy ended up at $25 million coverage.<\/p>\n
“We have never had a loss greater than $5 million,” Hills said. “We are paying for possible catastrophic loss. Once every every 20 years maybe you’ll have a loss up in that stratosphere, but ours are staying in the $5 million layer.”<\/p>\n
The annual premiums paid by Kent have jumped dramatically over the last few years. The city paid an annual premium of $947,000 in 2021 and $677,000 in 2020. Out-of-pocket payments also have greatly increased. The city paid the first $750,000 in 2021 toward its settlement and jury verdict total and the first $500,000 in 2020.<\/p>\n
“Local governments have been hit hard by verdicts and rate increases,” Hills said. “It’s about a 40% jump for the average city in insurance rates.”<\/p>\n
A Spokane jury earlier this year awarded a $19.5 million verdict against Spokane County after it ruled the Spokane County Sheriff’s Office wrongly fired a deputy and that the sheriff defamed him. In 2022, a Spokane jury awarded nearly $27 million to be paid to the estate of a woman who died in the county jail, with most of that amount to be paid by the jail’s health care provider.<\/p>\n
“It’s significant stuff,” said Hills, who added Spokane County’s annual premium increased to $3.4 million. “And the cost to defend trials continues to go up.”<\/p>\n
Hills confirmed with the city’s finance department staff that Kent has never paid out more than $5 million in a jury verdict or settlement. He said in an email that the city had no multi-million dollar payments in 2022.<\/p>\n
In 2021, the city paid a $4.4 million settlement to the family of Giovonn Joseph-McDade, the 20-year-old who died in June 2017 from shots fired by a Kent Police officer. The officer claimed Joseph-McDade tried to run him over with his vehicle after a short pursuit.<\/p>\n
In 2021, Kent city leaders moved $4.4 million from the city’s general fund to the liability insurance fund to cover a negative fund balance caused by claims paid and higher rates across the nation.<\/p>\n
While liability insurance rates jumped again, the city’s premium for excess workers’ compensation increased just 1.5% in 2023, a jump of $2,311, Hills said. Last year the premium jumped 25% or about $50,000. The insurance is for claims exceeding a designated dollar amount.<\/p>\n
“I’m super happy about that,” Hills said. “This is really great news.”<\/p>\n
The city’s premium is $152,357 for 2023 compared to $150,046 in 2022, Hills said. The city’s self-insured retention (similar to a deductible) for 2022 and 2023 are $1 million for police officers and $600,000 for all other employees. Those premium amounts are still a big increase from the annual premium of $80,184 paid by the city in 2019.<\/p>\n","protected":false},"excerpt":{"rendered":"
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