Kane County to lose insurance coverage; officials expect liability premiums to double
Kane County will lose its insurance coverage less than a month after officials paid $5.6 million to the developers of a new drug addiction treatment facility.
The fallout will have an impact on Kane County taxpayers as the cost for insuring the county will increase for 2019.
County board member Bill Lenert informed his colleagues about the decision by Travelers Insurance on Wednesday.
The county's current policy expires Dec. 1. The New York-based firm informed the county it would not renew the policy because of "numerous and severe claims over the last year," Lenert said.
Though not specifically cited by Lenert, the $5.6 million combined payouts to Maxxam Partners LLC and Glenwood Academy set a new high for lawsuit payments by the county. The county paid about $4 million in legal settlements in 2017. That was also a new high, up from about $2.5 million a few years ago.
The county board on Aug. 14 approved the settlement agreement with Maxxam and Glenwood that ended a lawsuit where Maxxam sought up to $68 million in damages.
The suit accused the county board of unfairly discriminating against people with disabilities in voting multiple times to deny zoning petitions needed to proceed with opening the drug treatment facility.
In addition to the $5.6 million in cash payments, the settlement allowed Maxxam to move forward with opening the facility. It will be just outside Campton Hills at the former site of Glenwood Academy.
In addition to the Maxxam lawsuit, settlements related to law enforcement cases also are trending upward.
"We do have a bit of a crisis here," Lenert said. "We will probably have an increase in our liability insurance premiums of about double."
Double would mean an added cost of as much as $300,000 for annual insurance coverage. Officials won't know the actual increase until soliciting bids from potential insurers.
In the meantime, county board members asked for a more detailed presentation on the rising cost of legal settlements in recent years. That information will come at the county board's next human services committee meeting Sept. 14.
Any cost increase will pile onto the $5.1 million deficit for 2019. County board members are trying to close that projected gap before the end of the 2018 fiscal year Dec. 1.
The added cost also fueled board Chairman Chris Lauzen's agitation about the Maxxam settlement.
Lauzen opposed the settlement. He went as far as to call Kane County State's Attorney Joe McMahon's defense strategy that led to the settlement "flaccid" in a recent letter to the county board.
Lauzen jumped on the loss of insurance coverage to renew the criticism.
"This is a direct consequence of the actions of our administrators, both elected and unelected, the recommendations from the state's attorney and the approvals by the board," Lauzen said. "The idea that insurance is going to pay for something - insurance companies make sure they make money all the time. They cover their costs. We ultimately end up shouldering those costs."