COVINGTON, Ga. — After a turbulent year of significant claims and two potential discrimination lawsuits against the Newton County Board of Commissioners, the Board of Commissioners is looking for a new insurance company, not to mention insurance costs, which have doubled over the past year.
The board was told in August that Travelers Insurance Co. would not renew its coverage for the county because insurance costs had skyrocketed from $986,000 to $1.9 million last year and a claims ratio of 154%.
The travelers’ current policies expire on October 1, and Gallagher Insurance, Risk Management and Consulting was hired to find new insurance for the county.
Scott Thomason, speaking on behalf of Gallagher during Tuesday’s Board of Commissioners meeting, balked at blaming the board’s allegations of discrimination as the sole reason for the suspension of reporting. But he mentioned it as part of a number of determining factors.
“It was a challenging extension period based on the marketing terms,” Thomason said. “Primary airlines have withdrawn from the market. But also, based on their loss experience, travelers felt they could not cover the costs.”
The news drew the ire of District 3 Commissioner Alana Sanders and District 4 Commissioner JC Henderson, both of whom joined District 2 Commissioner Demund Mason in two ante-lite notices filed by former prosecutor Megan Martin and the former county manager were specifically named Lloyd Kerr – one of whom claimed Martin and Kerr, both knowing of being racially discriminated against. Sanders, Henderson and Mason are black.
“The local newspaper used my name, JC Henderson, and said we discriminated against two former employees,” Henderson said. “Personally, I’ve come to the conclusion that three commissioners of color didn’t renew a contract, so it’s discrimination … show me what I did, in writing, and how it’s discrimination against the district head and our former district attorney. I think you owe me that if you put my name in the newspaper and accused me of doing something.”
Sanders suggested that future policies for the county would include a clause requiring an insurance company to go before the BOC “before any settlement, no matter what.”
“It’s my concern that any suits that come ahead of us will be taken out of our hands,” Sanders said. We’re being thrown out of there and we’re not protected in things that we have no control over… I’d like to know which cases don’t go before the Chamber and which cases would go before the Chamber because that also protects the citizens of this county and the officers who do politics locally.”
Thomason called this application a “tricky situation,” noting that any insurance company covering the county could have the final say on claims and settlements. Thomason’s solution to the board was to pursue a self-insured program.
He also reiterated the fact that Gallagher is the board’s “consulting insurance broker, representing you in the market to find property and casualty insurance,” but that “we don’t make decisions. We are a claims attorney and adviser throughout the claims process. I cannot comment on a specific topic.”
“I think it comes down to what we propose today,” Thomason continued. “They’ll like to have a little more control, but they also know that at the end of the day with the insurance company, it’s their dollar that counts, their decision.
“We want input. We want some control. Under a self-protected program, you have much more control. However, we don’t want every cent claim, no matter how small, to reach the board of directors. That makes no sense. This is not best practice nor what we would recommend.”
Thomason and Interim County Manager Jarvis Sims also stated that the self-insured program option would provide an optimal long-term solution without impacting the county’s budget as a whole. And county finance director Brittany White said budget changes — using funds from better-than-expected Local Options Sales Tax (LOST) revenue — would ensure that.
“We will change the budget to increase our LOST revenue and then we will offset with an expense in our insurance claims line,” White said.
District 5 Commissioner Ronnie Cowan warned the board to be cautious about what actions that trigger more similar lawsuits could bring the board.
“I want the board to understand that if we have another year like this, you’re going to break that bank,” Cowan said.
“This is district money set aside. We will pay a premium for the insurance, but the cost of covering the losses will come from this fund.
“We no longer have sovereign immunity in Georgia except under certain circumstances. I would suggest that you be very careful when taking action, listening to your district attorney and trying to make the right decisions. The BOC approved Gallagher by a unanimous vote 5-0 to negotiate a self-insurance program.