The Redevelopment Authority approved a plan at its May 8 meeting to purchase insurance for nine of the 10 parcels of land it owns.
The city has extended its liability insurance to cover the RDA-owned properties as an “additional insured” since late last December, when city risk manager AJ Gillingham discovered the policies the city was paying for were invalid.
But that arrangement was a “great risk” for the city, she told the RDA in January, as any claim would affect the city’s rates.
The RDA approved a quote of $810 per year from Illinois-based global insurance firm Arthur J. Gallagher and Company. This includes the Marathon site at 314 W. Main St. and most of the riverfront redevelopment site, but excludes the blacksmith shop, which none of the three firms asked would insure.
Of the three insurance companies that were asked for quotes, only A.J. Gallagher came back with a figure, according to a memo distributed at the May 8 RDA meeting by member Dale Reeves. Associated Insurance estimated it would cost $700-$1,000 per year to insure the parcels but couldn’t find a company to offer insurance without the blacksmith shop, as it stands adjacent to other parcels to be insured.
The city had insured the parcels when it owned them, but as the parcels were transferred from city ownership to the RDA, the city lost its “insurable interest” in the properties, Gillingham explained to the RDA in January.