Leeds City Council is set to face an insurance bill of over £16m to cover itself against terrorism, fires, injury and other “catastrophic events”.
The current contract for the authority’s main insurance cover is due to expire in March and a tender has just been approved for a new agreement.
A report just signed off by senior financial staff reveals that the premiums could be up to £3.25m a year over the next five years. The document says the insurance will “provide cover against catastrophic losses”, with “more frequent and low value claims” being paid from in-house insurance provision.
The various insurance policies covered by the new contract will be divided into five groups: fire and other risks to council buildings and contents; liability insurance for casualties; third party cover for council vehicles; and engineering such as boilers and ventilation systems. Also included is cover against any terrorist incidents, with “damage or destruction of council buildings and contents” being provided for.
The report points out that liability claims handling was brought in house in April 2014, saving £1.3m over the last five year term, and this will continue to be done in house “to realise similar savings”.
The report concludes: “If the contract is not awarded, the council will be left with no insurance cover.
“Having the insurance in place will negate the possibility of the council being called upon to meet any losses sustained, which could be substantial, as a result of any of the perils insured under the various policies.”
It was reported earlier this year that public sector organisations have quadrupled the amount of money they spend on insuring against terror attacks in the past 12 months,
However the YEP understands the potential total five year premium of £16.25m for Leeds City Council is around the same as the current premiums it pays. This is because council officers have used the current contract value as the basis for their calculations for the new tender.