Direct Municipal Insurance Pools have been around since the early 1970’s. These program’s were great for municipalities back then because there weren’t any other options. Today, in an ever changing market place, new programs arise on a daily basis. Municipalities no longer have to go direct to state pooled programs and share limits. When insuring through a direct pool, municipalities run the risk of being covered under outdated insurance forms. These outdated forms could result in the public entity paying out of their general fund for an insurance claim.
By insuring through direct pools you typically have a “cookie cutter program” that can not be altered without a substantial premium increase that will be absorbed by everyone in the pool. Some coverages municipalities want to make sure they have front & back wage pay, non monetary coverage, cyber liability, abuse and molestation and sales tax interruption. These coverages can all be obtained through a broker in the open market and are often excluded in direct pooled programs.
There are also municipal insurance pools that access brokers direct. These can also be beneficial to the public entity for several reasons but the main reason is that their forms are reviewed every year and tend to keep up with the open market in regards to coverages. Overall, I would encourage any public entity to have a broker review your insurance programs every year as coverages constantly change.
