Title
A Resolution authorizing the renewal of the Property and Casualty Insurance Program which includes, but is not limited to, Property, General Liability, Automobile Liability, Public Officials Errors & Omissions, Excess Workers’ Compensation, Crime Liability, Cyber Liability, Terrorism Property and Liability, Pollution Liability, Active Assailant Coverage, Flood, as well as other ancillary lines of insurance coverage and insurance broker fees through Arthur J. Gallagher Risk Management Services, Inc., for a not to exceed amount of $ 2,684,109 for the policy period of May 1, 2020 to May 1, 2021. (Funding Source: Insurance Fund)
Body
The City’s Agent of Record, Arthur J. Gallagher Risk Management Services, Inc. (“Gallagher”), has solicited and received quotes from various insurance carriers for the desired insurance policies shown below.
The City Commission named Gallagher as the City’s Agent of Record awarding Gallagher bid number RFP 2015.09.11- Risk Management & Insurance Brokerage Services for the Property and Casualty Lines
of Insurance Coverage.
The City’s property insurance premium increased by 16% based on the City’s current property schedule. This increase was attributable to a hardening market as a result of the number of natural disasters.
During the new policy period, the City will add three (3) new buildings to the City’s property schedule (Fire Station 2, Trolley Building and Public Safety Building) and remove the existing Public Safety Building.
The additions and deletion will result in an additional increase to the City’s property insurance premium as set forth in the chart below.
The City’s general liability and workers’ compensation insurance premium increased by 21% with claim history and market conditions driving the premium increase. The City obtained a premium reduction of
15% for the City’s excess workers’ compensation program. The City’s cyber liability insurance premium increased by 16%, which was attributable to the market’s increased claim frequency leading to market
hardening, and certain coverage changes were made.
The City’s general terms and conditions for all the other coverages are similar to last year, with some minor increases to the premiums as set forth below.
The total cost to renew the various insurance policies based on the City’s current property schedule is $283,256 more than the cost of these policies in the prior year.
The following is a summary description indicating insurance policies and premiums:
Description of the Insurance Policy Premiums/Fees Premiums/Fees
Surcharge or Fee May 1, 2019 to May 1, 2020 to May 1, 2020 May 1, 2021
|
Package |
$596,000 |
$720,000 |
|
Excess Workers Comp |
$184,591 |
$156,576 |
|
Property |
$1,146,906 |
$1,327,361 |
|
Boiler & Machinery |
$8,432 |
$8,400 |
|
ADD Business Travel |
$360 |
$360 |
|
ADD Police and Fire |
$12,338 |
$12,338 |
|
Bond Finance Director |
$1,138 |
$1,138 |
|
Pollution Liability |
$23,500 |
$23,500 |
|
Crime |
$11,756 |
$11,798 |
|
Sports Liability |
$23,857 |
$26,505 |
|
ADD Sports |
$13,306 |
$13,306 |
|
Cyber Liability |
$18,365 |
$21,375 |
|
Terrorism Liability |
$8,500 |
$8,925 |
|
Terrorism Property |
$12,500 |
$13,125 |
|
Flood adding |
$9,880 |
$9,689 |
|
Active Assailant |
$6,000 |
$6,300 |
|
Total without surcharges |
$2,077,429 |
$2,360,697 |
|
EMPA & TRIA |
Gallagher |
$3,412 |
|
Insurance Brokerage FeeGallagherer) |
$120,000 |
$120,000 |
|
Total Cost |
$2,200,853 |
$2,484,109 |
Property Schedule Changes (addition of 3 new buildings $0 $200,000
Total Cost of Program After Property
Property Schedule Changes $2,200,853 $2,684,109
A meeting of the Insurance and Risk Management Advisory Board (the “Board”) took place on February 26, 2020. During this meeting, the Board was provided with a preliminary indication of the different insurance
markets and the status of those markets. However, due to the current Declared State of Emergency, the Board meeting scheduled for March 18, 2020, where the Board would have been provided for their review and
recommendation a detailed presentation of the quotes obtained from the different carriers for the various types of insurance coverage, was cancelled. The Board has been provided a copy of the Executive Summary
attached to this resolution, which in none of the coverages did the premium increase more than the indications presented to the Board on February 26, 2020.