Council approves $8M in insurance for Convention Hall

Attention: open in a new window. PrintE-mail

CAPE MAY – City council last week voted unanimously to purchase additional flood insurance for Convention Hall, bringing the total coverage to $8 million.

In the hours before Superstorm Sandy made landfall, residents raised concerns over the lack of insurance to cover the $10.5 million Convention Hall. City manager Bruce MacLeod, who announced that the building had no flood insurance coverage at the first council meeting to follow the Halloween storm, later clarified that $2.5 million in coverage was provided through the Atlantic County Joint Insurance Fund for local municipalities. 

The JIF excess liability policy carries a $500,000 deductible.

At last week’s council meeting, which came on the heels of a pre-Thanksgiving emergency meeting to review the insurance options for the building, members agreed to apply for a half million dollars in coverage from FEMA and to purchase another $5 million in coverage from private insurers.

The FEMA policy, more expensive because it is first in line for claims, would cost $51,155 annually but would cover the deductible for the $2.5 million JIF plan. The deductible on the FEMA policy is $50,000.

Additionally, the city will contract to pay $31,600 yearly for the remaining $5 million in coverage.

Convention Hall opened last Memorial Day weekend and cost some $10.5 million to construct.

The $8 million in flood insurance was deemed adequate by council, as the $10.5 million price tag included “soft costs.”

“We don’t need to insure for costs of planning and designs in this amount. The insurance is for the building and, to a certain extent, contents,” said Mahaney.

Under the FEMA policy, the hall’s contents are insured for $100,000.

“We had three people stand up at the meeting and question whether that was enough,” said Mahaney. “But, we walked through this with our risk management people. The contents include tables and chairs – the kinds of things we can move out to another location if we know a storm is coming. This will help us keep the premium costs down.”

The JIF coverage has been in place since April 2012.

Mahaney said that the FEMA policy has a 30-day waiting period, but that the private insurance can go into effect as soon as the contract is entered.

“We’ll have the full $8 million in coverage by the year’s end,” said Mahaney.

blog comments powered by Disqus