Submitted By: Chris Watt
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Presentation By: Chris Watt
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Department: Human Resources and Risk Management
STAFF RECOMMENDATION (Motion Ready):
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Approve the fiscal year 2023 property, casualty, liability, and workers compensation insurance premiums and authorize the Interim Chief of Staff to execute the corresponding insurance policy applications with a projected expenditure of $1,827,215
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable.
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
The Human Resources and Risk Management Department works with its broker, Risk Management Associates, Inc. (RMA), a wholly owned subsidiary of Brown & Brown, to solicit premium renewals for the City's property, general liability, automobile, workers' compensation, and other miscellaneous excess employer insurances as shown below and on the attached spreadsheet. Our broker negotiates with our current carriers and evaluates other competitive carriers. RMA has reviewed alternative competitive policies and the most cost-effective and comprehensive policies are recommended for purchase. Our rates and premiums are compared with other similar cities and counties in Florida to ensure we are receiving the most competitive rates available.
FINDINGS AND CONCLUSIONS:
The following agreements and/or renewals are for the policies set to expire on 9/30/22 and are the recommendations for renewal for 2022/2023.
Public Officials' Liability
Carrier: ACE American Insurance Company | Premium: $88,299 (14.56% increase). This policy provides for Public Officials Liability and for Employment Practices Liability with a limit of $1,000,000 and self-insured retention (SIR) of $150,000.
Fiduciary Liability
Carrier: Hudson Insurance Company | Premium: $15,793 (4.79% increase). This policy provides a limit of $1,000,000 in coverage for each Pension Board: Fire ($5,000 SIR), Police ($5,000 SIR), and General Employees ($10,000 SIR).
Liquor Liability
Carrier: Mt. Vernon | Premium: $750 (2.80% decrease). This policy provides a limit of $1,000,000 (no SIR) in coverage associated with alcohol sales at the Ocala Golf Club.
Aviation Liability
Carrier: Global Aerospace | Premium: $1,965 (0% increase). This policy provides a limit of $5,000,000 (no SIR) for premises liability coverage and Hangar Keepers Aircraft coverage of $1,000,000/$2,000,000 ($1,000 SIR).
Cyber Liability
Carrier: ACE American Insurance Company | Premium: $16,838 (23.32% decrease). This policy provides $1,000,000 ($250,000 SIR) in coverage for cyber incident response team, business interruption loss, contingent business interruption loss, digital data recovery, network extortion, and cyber, privacy and network security liability.
AD&D
Carrier: Ace American Insurance Company | Premium: $0 (0% increase) 2-year premium prepaid in 2020-$19,770. This policy provides for the accidental death and disability benefits required by Florida Statutes 112.18 and 112.19.
Firefighter Cancer Benefit
Carrier: ACE American Insurance Company | Premium: $26,128 (0.79% increase). This policy provides for the lump sum payout and death benefits required by Florida Statute 112.1816.
Automobile
Carrier: Preferred Government Insurance Trust (PGIT) | Premium: $64,017 (9.96% increase). This policy provides physical damage coverage for those vehicles valued at over $100,000 ($25,000 SIR). Fire apparatus are covered at an agreed value (purchase price), and all others are covered at the actual cash value at the time of loss (depreciated value).
General Liability
Carrier: Preferred Government Insurance Trust (PGIT) | Premium: $86,286 (16.92% increase). This policy provides $1,000,000 ($200,000/$300,000 SIR) in coverage for general liability and law enforcement liability. Premium is based on the City's payroll.
Inland Marine
Carrier: Preferred Government Insurance Trust (PGIT) | Premium: $13,182 (10.01% increase). This policy provides physical damage coverage for mobile equipment (e.g., backhoe) valued at over $25,000 ($25,000 SIR) that is paid out on an agreed value (purchase price).
Property
Carrier: Preferred Government Insurance Trust (PGIT) | Premium: $930,311 (12.60% increase). This policy provides protection for physical and permanent structures and their associated indoor and outdoor contents within 1,000 feet. Claims are paid out on an agreed value (replacement cost - $25,000 SIR).
Excess Workers' Compensation
Carrier: Preferred Government Insurance Trust (PGIT) | Premium: $287,878 (20.74% increase). This policy provides a statutory limit ($500,000 SIR) in coverage for workers' compensation claims and a $1,000,000 limit ($500,000 SIR) for employer’s liability. Premium is based on the City's payroll.
Pollution Liability
Carrier: Indian Harbor | Premium: $42,714 (2-year premium) (10.32% increase). The policy provides $1,000,000/$10,000,000 ($100,000 SIR) in coverage for pollution and remediation costs.
Crime
Carrier: Travelers | $6,980 (6.47% increase). This policy provides $1,000,000 (10,000 SIR) in coverage for employee dishonesty, theft, disappearance, and destruction; $100,000 ($1,000 SIR) for funds transfer, computer fraud, forgery/alterations; and $250,000 ($10,000 SIR) for social engineering.
Overall, the proposed renewal rates for all coverage equate to a 15% increase in year-over-year premium compared with the 2020/2021 policy renewals.
FISCAL IMPACT:
Funds have been budgeted in accounts 628-099-999-590-81-45010 and 626-099-999-590-81-45010 for a total projected premium of $1,827,215.
PROCUREMENT REVIEW:
These services have been procured in compliance with the City’s Procurement Policy.
LEGAL REVIEW:
The resulting policy renewals will be reviewed and approved for form and legality by the City Attorney, Robert W. Batsel, Jr.
ALTERNATIVE:
Have the broker seek additional quotes.