CLN trustees vote for new insurance

While two libraries remain closed due to catastrophic water damage, Community Library Network trustees are poised to change CLN's insurance policies.

If no other quotes come in before Friday, library trustees will accept insurance quotes from Wright Specialty Insurance and American Family Insurance and cancel current policies with the Idaho Counties Risk Management Program and the Great American Insurance Group. These changes will nearly double the library network's insurance costs.

Chair Rachelle Ottosen, Vice Chair Tom Hanley and Trustee Tim Plass approved the plan of action during the Feb. 15 board meeting at the Hayden Library.

Trustees Katie Blank and Vanessa Robinson voted against the motion, first presented by Plass with an alternative motion substituted by Ottosen.

"This is the most irresponsible board I have ever seen," said Blank, a longtime member and past chair of the board, noting how this change will cost the library network $3,500 more a month.

"It's reckless," she said.

Blank also called the move "insane."

"I have absolutely no idea why you would want to spend $3,500 more a month for policies that we don't even know are better than what we have," she said.

The Wright and American Family Insurance quotes were presented to the board via correspondence from Redman and Company Insurance, owned by Idaho Rep. Jordan Redman, R-Coeur d'Alene. Redman and Company provided three options for the library network's consideration, advising the board to accept the first option in the list.

The first option states the network should stay with ICRMP and Great American for the rest of the year, with the Great American premium costing $7,362 and the ICRMP premium costing $51,293 for a total of $58,655 per year.

Redman and Company said the following in its letter to the board:

"If the Community Library network wishes to stay with ICRMP and Great American for the remainder of the policy term, and shop out insurance coverages for their 2024–2025 Policy term we advise the following:

Applications must be filled out and submitted by Thursday, March 14, 2024, so they can be submitted to carriers.

The Community Library Network will begin receiving bids for insurance 60 days before renewal on October 1, 2024 (a Tuesday).

When CLN finds a suitable quote, per the ICRMP contract, CLN needs to reject ICRMP renewal 45 days before October 1, 2024, which would be Saturday, August 17, 2024."

However, the board chose the third option, which replaces the ICRMP and Great American policies with those from Wright and American Family.

Redman and Company provided the following in its third option:

Wright/American Family: $87,263.00

ICRMP Cancelation Charge (35% of policy Premium) Total $17,952.55

Total Cost $105,215.55

"If the Community Library Network goes with option three, they will be receiving better liability coverages in their Auto Coverage, Abuse or Molestation, Medical Payments, Employee Benefits Liability, and General Liability," Redman Insurance said in its correspondence.

Plass, who first recommended the network hire Redman and Company in early September 2023, said the board has known for six months that ICRMP dropped the library network's liability coverage to $500,000.

Last August, ICRMP cited "increasing risk exposures" when it notified the CLN board of significant reductions to the library network's coverage beginning Oct. 1, 2023. Those changes included removing employment practices liability coverage and reductions of per claim limits for other types of coverage from $3 million or $2 million to $500,000.

Plass said changing insurance is an opportunity to restore the network's liability.

"I am frustrated with ICRMP that they think they can lower our limits and keep the exact same premiums and not even give us a quote for restoring it," he said.

Library Director Alexa Eccles, who has been working to retrieve insurance quotes at the request of the board majority, said a mid-year policy quote is not impossible, but it is irregular.

"I think the board is so ignorant about the insurance process that they don't understand that you get insurance quotes on an annual renewal basis," Eccles said.

Eccles urged Plass to instead "act more conservatively" and "more responsibly."

Ottosen indicated she believes unspecified people are "champing at the bit" to sue the library network.

"Keep our policies in line, keep our actions in line," Eccles said. "Stop taking these risks that are going to continue to make us less insurable and think about the entity and the money that we don't have and that we may be very shortly called on to expend from our reserve."

This change in insurance carriers is expected to happen as CLN addresses damage at the Post Falls and Athol libraries, which have been closed since mid-January due to damage caused by extreme cold that ruptured the fire suppression systems and flooded the buildings.

"Stop for a second and realize that we are in the middle of a multimillion dollar claim that is pending," Eccles said. "We are not highly insurable until that is resolved."

Eccles said library trustees have never taken the lead on selecting an insurance carrier. Doing so is normally a responsibility of CLN staff, she said.

"The selection criteria is made by staff and then a recommendation is made to the board, so this action is another opportunity for us to be sued and I find it reckless, absolutely reckless that we're talking about this in this way without legal counsel," Eccles said.

View the Feb. 15 meeting here: www.youtube.com/watch?v=oAcziZVg1IM