New London — The city will be honored later this month with an Excellence in Risk Management Award, a recognition of the city's proactive steps to predict and control its liabilities and establish risk management as "an organizational priority."   

New London will be one of four members of the Connecticut Interlocal Risk Management Agency to receive the award, along with a $2,500 risk management grant, at CIRMA’s annual meeting on Jan. 26. A CIRMA film crew was at City Hall on Friday shooting video interviews with city employees about changes that have taken place in the city that have caught CIRMA’s attention.

Mayor Michael Passero said the city has followed the guidance of Risk Manager Paul Gills to not only identify potential liability risks but to reduce skyrocketing insurance premiums and costs associated with things like worker compensation claims.

“It’s really paying off,” Passero said. “(Gills) is a great asset. He’s very aggressive in looking after our risk, which is very expensive to our city.”

Gills, a former safety engineer with more than three decades of experience working for insurance companies and consulting firms, was hired in 2014 to help rein in costs and cultivate a safer work environment.

The city was at the time facing an increase in insurance premiums and deductibles. In 2014, CIRMA increased the city’s liability and auto insurance policy deductibles from $50,000 to $500,000.

It was the result of a rise in worker compensation claims, many of them from the police and fire departments, along with legal claims related to the police department, Gills said.

“The city did not have any formalized process to proactively deal with risk management issues, identify the exposures, or as system to identify loss claims,” Gills said. “There was no effective means to deal with risk. As a result, our losses increased and our deductibles increased.”

Gills instituted safety committees and established a risk management steering committee, which brings department heads together monthly. Passero said everything from playground equipment inspections to storage of firefighter equipment is discussed at those meetings.

“We were not predicting problems,” Gills said. “The steering committee looks at data, predicts problems and proactively enacts controls and procedures. The focus is really on prevention but also mitigating those claims and losses.”

Auto deductibles have since shrunk to $350,000 and Gills said the city was preparing to negotiate for a new liability policy that starts on July 1.

Over the last three years, workers’ compensation claims have dropped by 34 percent and costs are down by 55 percent, Gills said. The police department had the most noticeable drop in liability claims — down by 57 percent, with costs dropping by 65 percent, Gills said.

Combined claims — workers’ compensation, property and liability — are down 35 percent over the past three years, Gills said, for a total savings to taxpayers of about $3 million.

“Being a municipality, we do not have the option of risk avoidance. If someone’s home is being broken into at night, police have to respond. If someone’s house is on fire, the fire department must respond. If there is a blizzard out there, we send the public works guys out. We are required to put our guys out there at risk and in peril,” he said.

g.smith@theday.com