When our police department responds to a call, when our public works department plows snow, when our teachers educate students and when the town building inspector inspects buildings to ensure they comply with the building code, the Town of Granby is exposed to liability.
The way the town protects its employees, its buildings and infrastructure and its taxpayers from everyday exposures to liability is to practice risk management.
Risk management is a broad term and can encompass many strategies for limiting liability. For this discussion, I’d like to highlight three layers that the Town of Granby regularly practices limiting exposure to liability that occurs every day delivering town services to residents.
The first layer is through administering policies that promote safety. Those policies are carried out by department heads, supervisors and all employees. It may be something as simple as “no texting while driving a town vehicle.”
The second layer is how much risk do we self-insure? Self-insure means that, based on our exposure to risk, which is sometimes out of our control, what is an acceptable balance between the first dollar of loss that we pay compared to the cost of insurance for the whole value? Just like most drivers carry a $500 deductible if their car is damaged in an accident, the town may carry a $10,000 or a $50,000 deductible to balance the cost of insurance compared to what we decide we can pay in the event of a loss. If the town assumes more first-dollar risk, the cost of insurance is lower.
The last layer is deciding when to buy outside insurance and pay insurance premiums to limit the total loss exposure to the Town of Granby.
Back in April, I mentioned that the Connecticut Conference of Municipalities (CCM) does good work representing all 169 cities and towns on legislative issues. I also explained that CCM has an insurance arm called the Connecticut Interlocal Risk Management Association (CIRMA) that underwrites the non-medical insurance risk for about 90 percent of the cities and towns in Connecticut.
CIRMA was created in 1980 in response to an insurance crisis whereby Connecticut municipalities had virtually no alternatives to securing insurance for a variety of risks. They include property casualty, general liability, automobile, boiler and machinery, law enforcement, errors and omissions, school leaders and more recently, cybersecurity liability, among other policies they write.
The reason I share a little history on both risk management and CIRMA, is that based on the Town of Granby’s favorable loss history, CIRMA made a distribution of $12,507.57 back to the town on Aug. 13 and that is great news to celebrate.
This distribution is a direct reduction of premiums and is brought to you by the good work of the board of selectmen, board of finance and, in particular, Finance Director Kimi Cheng and Project Manager Betsy Mazzotta, who all worked diligently over the last year carefully administering risk policies, deciding on the appropriate level of first dollar coverage, and then placing the remaining risk with CIRMA.
It’s this careful administration of risk in Granby that deserves a shout out because the town does a great job protecting its employees, assets and infrastructure, and of course you the taxpayer.