One vehicle accident, he said, affects much more than property insurance. “We have $100,000 retention on any vehicle property damage loss; we have $250,000 potential on liability claims, which can arise out of vehicle accidents; and we self-insure the first $300,000 out of any workers' comp [claim],” he explained. “So we have a rather significant exposure, just from one vehicle accident.”

Renewals this year “went up a lot, but when you put it into the perspective of what we were paying 10 years ago it wasn't so badaround 30 percent overall,” Mr. Ellenberg said, who noted that the city does not have terrorism coverage.

To keep costs down, he said his focus is on loss control. The city has about 1,500 full-time employees, 300 part-time employees, and 900 seasonal employees.

Because of loss control efforts, including a voluntary safety incentive program, the municipality is at a “historic low with our workers' comp modifier in 24 years,” he said.

Those departments that are interestedwhich are mosthave a “bottom-up program run by employees.” Workers in the program are motivated and concerned about their safety and their co-workers' safety, he said. “It's been a fantastic system.”

Mr. Ellenberg recommended that any program “be driven by those employees who are most affected by the safety program.”

Those employees “know what is important and have a greater impact on co-workers,” he added.

One of the biggest concerns from a job safety standpoint is vehicle accidents, he said, which are “the number-one on-the-job death cause in every state.”

An incentive program was initiated with the city's parks departmentwhich is made up of a large number of young, seasonal employeesto encourage them to wear seat belts.

Anyone seen driving without a seatbelt is required to report it as an accident, he said, “so we're getting very good compliance.”

The city also offers a defensive driving course for teenage children of employees. Teens, he explained, are involved in the largest number of accidents.

“We're looking at it holistically because an accident affects your workers' comp, your property and your liability, and it can also impact your health insurance, too,” he said. “If you have people off the job getting hurt in vehicle accidents, it sometimes can affect the health insurance.”

Michael DelVecchio, a former board member with the Public Risk Management Association, and division head of risk management for Morris County, in Morristown, N.J., said the county's retentions are so high that “we've never really gone above our retentions, so everything we do in loss control is holding our money.”

Vigilant loss control, he said, is key to keeping losses down. The county has an “aggressive” training program for new and regular employees and supervisors.

“I told one group that the life you save could be your own–that's the purpose of our training program,” he said. “We're trying to save the county money but we also don't want severe injuries.”

As a result of the program, costs are down, he said. The program calls for mandatory reporting of all incidents, “even if there's no medical [treatment], because we want to fit [the incidents] into our training program.”

Even though an incident may not result in an injury, it is included in training because “we may get a clue that maybe the work process isn't exactly as it should be. We're looking for trends.”

He said safety training has been increased to include a nursing home, the parks department, roads, sheriffs, corrections and the mosquito commission. The county employs about 3,100 full-time workers and about 600 seasonal part-time workers because of three golf courses in the county.

Since Sept. 11, Mr. DelVecchio said, the major change is insurance costs. Terrorism coverage is “up in the air in New Jersey.”

So far, he said, “the only place we have been affected were excess layers. Some of the carriers couldn't get reinsurance and therefore could not renew the upper layers.”

The county has negotiated the same comprehensive package as last year. Mr. DelVecchio said he anticipated increases before Sept. 11 because of some major property losses that had occurred.

However, after Sept. 11 “there were other things to look at, such as a policyholder's surplus, which had to be carefully filled,” he noted.

The county took “more increase than we anticipated, but no more than what was going on around the country.” Increases averaged 40 percent, he said.

“I'm happy we got the same package of coverages that we had before,” he said. “We don't have the higher limits of liability, but I think a lot of insureds are running into the same problem.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 12, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.