Critical incidents cause us to pause and reflect. They also push us to analyze what we do, and how and why we do it. This is a time, based on the analysis, to learn and plan for the future.

The crisis that took place in San Bernardino puts a spotlight on critical incidents, public entities, and the concept of pooling. It also illuminates the fact that a well-structured program is built to withstand critical events.

The EIA incorporates best practices into the management of the pool providing loss prevention services to mitigate the risk, and claims management and oversight to properly manage claims that inevitably arise. A thorough analysis of how much risk should be retained, and how that risk is supported by the purchase of layers of reinsurance and excess insurance placements is strategic and evaluated annually. In the workers’ compensation and liability programs, terrorism is not excluded and in the property program we purchase separate coverage to protect against this specific, catastrophic risk. The economies of scale created by a large excess pool, provide protection for the impacted member, disperses the loss through layers of reinsurance and excess insurance, and thankfully has only a marginal effect on the historic buildup of risk margin into reserves.

In this specific event, two entities, the County and City of San Bernardino, were involved in a critical incident along with many individual employees that were affected.  The event was a single occurrence, therefore the County and City benefited by sharing the expense of the self-insured retention, thus reducing the individual self-insured retentions of both members. The aggregate cost of all incident related claims will be shared by multiple layers of reinsurance, dispersing this large hit to multiple insurers. Additionally, because of our longstanding relationships with the reinsurers and excess insurance companies, a benefit of working with multiple facilities is that without exception, our partners immediately stepped forward to offer their service and expertise to the County and City.

So what have we learned and what is the plan for the future? We have learned that a well-funded and well-structured pool is built to withstand a crisis, and that we should never stop trying to improve on the service and benefits to our members. The EIA has partnered with Mainstream Unlimited for pre and post critical incident training. An eight part series of webinars has been established (see the EIA Calendar for details and registration) as well as six regional training sessions throughout the state (more details to come). Additionally, post-incident services have been established to include situation assessment and media consulting services which will be provided to members upon approval by the EIA, and paid for by the EIA up to $50,000 per incident.  Any costs above that would be paid for by the member.

For more information, contact Rick Brush, Chief Member Services Officer.