Joint purchases of insurance for local government units. Savings amount to hundreds of thousands of złoty

• The starting point for creating the Insurance Policy of the Silesian Voivodeship was primarily the standardisation of insurance for the property managed by it and ensuring its optimal protection.
• Another assumption was the savings that were guaranteed by solutions resulting from joint insurance.
• In short: most entities would not be able to insure themselves with civil liability insurance for an insured sum of up to PLN 10 million.

The first stage of consolidation began in 2019. It covered 53 organizational units. It immediately had a positive effect. Over three years , it was possible to save PLN 990,000.

The second joint procedure took place in 2022. It covered a smaller number of units, 29, but here too the savings were substantial. Their total amounted to PLN 857 thousand.

With significantly increased values ​​of property insurance sums, including their update to replacement values, an attractive price was obtained, importantly, lower than in the previous procedure. It was the result of the second procedure that confirmed our belief that the organization of joint purchases of insurance is not only a textbook example of economy and rationality, but is also a chance to reach for a high level of protection for small entities that would never be able to purchase it in an independent procedure

- argues the secretary of the voivodeship, Krzysztof Dzierwa.

The broker was selected through a competition held from August to December 2024, and its task was to include implementing insurance solutions that would generate savings in insurance costs not only for the office, but also for subordinate units.

The evaluation criteria were strict. Bids had to include:

• number of lawyers and brokers,
• having its own claims settlement office,
• experience in the consolidation of local government units.

How does the mechanism look in practice? Namely, the units together with the Marshal's Office conclude an agreement pursuant to Article 38 of the Public Procurement Law . On this basis, the Marshal's Office organizes a joint tender procedure.

The next step, necessary to commence activities aimed at securing property against the effects of random events, was the adoption of a resolution .

The document was intended to provide a basis for actions that would allow the local government to gain certainty as to the correctness of the concluded insurance contracts , the adequacy of the established insurance amounts and the efficiency of claims settlement procedures.

This is important due to the need to ensure full restitution of property in the event of accidental events (e.g. flood, fire) and in the case of third party claims. Especially in the context of possible natural disasters, which always result in significant property damage. Which is worth bearing in mind, having in mind the recent flood, last year, which also hit the Silesian Voivodeship. Moreover, importantly, the adoption of the resolution is part of the obligation resulting from the Public Finance Act.

This refers to Article 68 of the Act 1 item 7, which deals with management control, within which one of the most important elements is risk management. These obligations are specified in the announcement no. 23 of the Minister of Finance of 16 December 2009 (item 84) Management Control Standards for the Public Finance Sector. This provision alone can constitute an independent basis for comprehensive regulation of insurance issues in local government.

- reminds the secretary of the province, Krzysztof Dzierwa, emphasizing that the adopted insurance policy fully implements the assumptions referred to in art. 44 section 3 of the Act on Public Finances.

This provision in the law specifies that public expenditure should be made in a purposeful and economical manner, in accordance with the principles of obtaining the best effects from given expenditures and the optimal selection of methods and means to achieve the assumed goals.

When talking about insurance policy, it is worth taking a look at how individual solutions translate into regulations regarding medical entities.

In accordance with the Act on Medical Activity, the establishing entity may cover the net loss for the financial year of an independent public health care facility, in an amount that cannot be covered in accordance with paragraph 1, but not higher than the sum of the net loss and depreciation costs. In accordance with Article 61, the liabilities and receivables of an independent public health care facility after its liquidation become liabilities and receivables of the relevant local government unit.

This means that if SP ZOZ does not have adequate insurance or the sum guaranteed in the third party liability insurance is too low, the activity may be suspended and the difference would have to be covered by the local government. Therefore, it is crucial to take care of such insurance that any potential claims are covered from it .

The practice of local government units indicates that such an approach to purchasing policy is nothing new. Local governments have been implementing insurance consolidation for years with very positive results, boasting significant savings.

In practice, we observe similar resolutions that have not been questioned by the supervisory bodies over local government units, despite the fact that they are resolutions that go further, directly obliging local government legal entities to act differently in a specific way. Moreover, there are local governments that organize joint purchasing groups without adopting such a document.

- However, the document signed by the Silesian Voivodeship, despite its compliance with the provisions and content of the acts, as well as its pragmatic justification, became the subject of supervisory proceedings conducted by the Silesian Voivode. The validity of the resolution was questioned in terms of its procedure. Nevertheless, the issued supervisory decision does not constitute an obstacle to the joint preparation and conduct of the contract award procedure. And it was signed by the Marshal's Office of the Silesian Voivodeship and 54 of its units - informs the Silesian Marshal's Office.