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Date: 9- Z 7- 99
CITY OF ATLANTIC BEACH
CITY COMMISSIONER MEETING
STAFF REPORT
ITEM: Award of City Insurance (exchiding Employee Benefits)
SUBMITTED BY: David Thompson, City Manager
DATE: September 22, 1999
BACKGROUND: Based upon,a Request for Proposals prepared by Waters Risk
Management, up to seven (7) proposals were received to provide
the City's insurance.
FUNDING: Funds for this action are currently within the proposed 1999/2000
Budget. Although the total premiums for these proposals is
$50,048 less than current, a large part of this reduced premium
amount is attributable to the transfer of fire services.
RECOMMENDATION: Award insurance as proposed by Waters Risk Management.
CITY MANAGER: ~ ~~G~,~~~ _
Attachments: 1. Current and Proposed Insurance
2. Purchase Recommendations
3. Cost Comparisons
CITY OF ATLANTIC BEACH
1999 PROPERTY/LIABILITY/WORKERS COMPENSATION INSURANCE PROPOSALS
1998-99 Proposed 1999-d0
Insurer Premium Insurer Premium
1 Commercial Property Coverage FMIT/FL League $48,077 Coregis/RMA $31,076
2 Commercial Inland Marine FMIT/FL League In Property Coregis/RMA In Property
3 Business Income FMIT/FL League In Property Coregis/RMA In Property
4 Commercial Crime Coverage ($500,000) FMIT/FL League $1,125 Travelers/Byran $1,950
5 Data Processing Coverage FMIT/FL League In Property Coregis/RMA In Property
6 Boiler And Machinery Coverage Hartford/FL League $4,982 Coregis/RMA $2,322
7 Commercial General Liability ($1,000,000) Coregis/RMA $41,019 Coregis/RMA $31,677
s Law Enforcement Liability ($1,000,000) Coregis/RMA In GL Coregis/RMA In GL
9 Automobile Coverage ($1,000,000) Coregis/RMA $42,402 Coregis/RMA .$40,367
to Employment Practices Liability Coregis/RMA In Pub Off Coregis/RMA In Pub Off
11 Public Official Liability ($1,000,000) Coregis/RMA $11,447 Coregis/RMA $11,447
12 Workers Compensation Coverage GRITlRMA $139,040 FMIT/FL League $119,904
13 Environmental Liability ($1,000,000) United Capitol/RMA $2,950 United Capitol/RMA $5,124
14 Storage Tanks C&UBrown & Brown $2,323 In Environmental
is Pension Fiduciary Liability Travelers/FL League $3,576 Travelers/FL League $3,217
16 Year 2000 Liability Not Covered Coregis/RMA Included
17 Law Enforcement Death Benefits AIG/FL League $815 Hartford/Bryan $624
Total $297,756 $247,708
n
09/?..2/99 WATERS RISK MANAGEMENT
WATERS RISK MANAGEMENT
6580 64TH AVENUE NORTH C PINELLAS PARK, FLORIDA 33781-5218 C TELEPHONE (727) 546-5644 C FAX (727) 546-2712
Independent Risk Management and Employee Benefits Management Consulting Only ? No Sales
Allan Paul Waters, CPCU,CLU,ARM,AIC
Member, Society of Risk Management Consultants
September 21, 1999
To: Mr. George A. Foster, Human Resource Manager
City of Atlantic Beach, Florida
By E-Mail
From: Hayden Knowlton CPCU, ARM, AIC and Al Waters CPCU, CLU, ARM, AIC
Re: Purchase Recommendation -Competitive Proposals
1999 Property, Liability and Workers Compensation Insurance
BACKGROUND
This summer the City requested competitive proposals for the October 1, 1999 renewal of its
property, liability and workers compensation insurance program. Proposals were received on
Wednesday, August 25.
Waters Risk Management prepared the Request for Proposals and reviewed the submissions when
received. We specialize in independent risk management consulting to Florida public entities, we do
not sell or broker insurance and we are not affiliated with agents or insurers.
PROPOSALS RECEIVED
Seven proposers responded to the City's RFP, offering a variety of proposals through various
insurers. Summary details of the proposals are on attached spreadsheets. Proposers include:
Proposer
Aon Risk Services
L. B. Bryan & Co.
Florida League of Cities
Gulfstream Insurance Group
HBH Insurance Group
Harden & Associates
Risk Management Associates, Inc.
J. Hayden Knowlton, CPCU,ARM,AIC
Member, Society of Risk Management Consultants
Location
Jacksonville
Jacksonville
Orlando
Ft. Lauderdale
Cocoa
Jacksonville
Altamonte Springs
Atch 2, p 1
1999 Property, Liability and Workers Compensation Insurance, page 2
PROPOSAL EVALUATION
The proposals were evaluated based on:
Cost
Coverage
Service
Insurer Stability
The City's RFP requested a variety of insurance and coverage options. Some proposed only some
of the insurance and selected coverage options.
Specific recommendations are often a matter of judgement as to which proposals are best. In our
opinion, this purchase recommendation is practical based on the proposals received, and the costs and
options given.
PURCHASE RECOMMENDATION
We recommend that the City purchase its coverage from five insurers.
Property
Purchase commercial property, inland marine, business income and data processing equipment
insurance from the Coregis Insurance Company, as proposed by Risk Management Associates, Inc.
Other than the cost difference, the windstorm deductible (the greater of 1% or $5,000) is lower than
proposed by the Florida League of Cities. The policy also limits the annual aggregate windstorm
deductible to a maximum of $50,000.
Boiler and Machinery
Purchase coverage from Coregis Insurance Company as proposed by Risk Management Associates,
the lowest cost proposal.
Crime
Renewal with Travelers Insurance Company, with a $500,000 limit for all employees, is
recommended. Additionally, we recommend purchase of $500,000 excess endorsement above the
$500,000 primary limit for the Finance Director, Finance Deputy Director, City Manager and City
Clerk which includes the City's exposure to loss from voice initiated electronic funds transfers.
The City currently purchases $250,000 of faithful performance coverage on all employees.. The
insurer provides two policies, one covering the Finance Director and the other covers everyone else.
Atch 2,. p 2
1999 Property, Liability and Workers Compensation Insurance, page 3
Liability
Renewal with Coregis Insurance Company, with a $1,000,000 limit of liability, is recommended. The
insurance covers general liability, law enforcement liability, automobile liability, public official liability
and employment practices liability.
Workers' Compensation
The lowest cost proposal, and the one we recommend, is the Florida Municipal Insurance Trust
proposed by the Florida League of Cities.
The City's current insurer, Government Risk Insurance Trust (GRIT) will cease operations October
1, 1999. It's failure is attributed to a recent actuarial study that greatly increased the value of the
pool's outstanding claims. It was determined that based upon the pool's reserves, it could not pay the
outstanding claims.
Environmental Liability .
Renewal with United Capitol Insurance Company proposed by Risk Management Associates is
recommended. The policy also covers the City's above and underground storage tanks.
Pension Fiduciary Liability
This coverage provides liability insurance for the City and the individuals that serve on the pension
boards for claims for errors and omissions in the handling of the pension funds. We recommend
renewal with Travelers Insurance Company proposed by the Florida League of Cities..
Law Enforcement Statutory Death Benefits
Purchase the Hartford Life Insurance Company policy proposed by L B Bryan is recommended.
Umbrella Liability
Proposals for higher limits of liability were requested for the City's consideration. Although the City
currently purchases a $1,000,0001imit for general and automobile liability it is worthwhile to test the
market for the cost of higher limits.
Coregis Insurance Company, proposed the following premiums for higher limits:
Coverage Current Limit
General Liability $1,000,000
Law Enforcement Liability $1,000,000
Automobile Liability ~ $1,000,000
Public Officials Liability $1,000,000
Employment Practices Liability $1,000,000
Higher Limit Option
$3,000,000
$3,000,000
Higher limits not proposed.
Higher limits not proposed.
Higher limits not proposed.
Annual Cost
$2,979
Included above
The City's decision to purchase higher limits of liability is a judgement call. We do not see a
compelling urgency to purchase higher limits despite the minimal additional premium.
Atch 2, p 3
CITY OF ATLANTIC BEACH
1999 PROPERTY/LIABILITY/WORKERS COMPENSATION INSURANCE PROPOSALS
1 Commercial Property Coverage
2 Commercial Inland Marine
3 Business Income
4 Conunercial Crime Coverage ($500,000)
5 Data Processing Coverage
6 Boiler And Machinery Coverage
7 Commercial General Liability ($1,000,000)
s Law Enforcement Liability ($1,000,000)
9 Automobile Coverage ($1,000,000)
l0 Employment Practices Liability
11 Public Official Liability ($1,000,000)
12 Total
13
14 Workers Compensation Coverage
15 Minimum Cost
16 Maximum Cost
17
is PROGRAM MINIMUM
19 PROGRAM MAXIMUM
20
21 Environmental Liability ($1,000,000)
22 Pension Fiduciary Liability
23 Umbrella/Excess Liability
24 Law Enforcement Benefits
25 Year 2000 Liability
a
W
RMA AON LB Bryan FMIT Gulfstream HBH Harden
$31,076 $63,604 $51,837 $205,807
In Property In Property $4,244 $1,424
In Property In Property $714 lii Property
$4,401 $875 $3,907 Not Stated
In Property In Property $321 $315
$2,322 $4,398 Not Stated
$31,677 $33,876 $22,391 $37,960 $52,278
In GL $13,972 $18,719 $24,533 $29,605
$40,367 $32,331 $34,937 $34,807 $67,483
In Pub Off In Pub Off In Pub Off In Pub Off
$11,447 $10,954 $12,793 $17,123 $20,697
$121,290 $91,133 $153,319 $179,844 $377,609
$136,246 $79,424 $67,533 $119,904 $89,747 $79,424 $133,906
$136,246 $224,411 $226,621 $119,904 $199,437 $224,410 $198,579
$257,536 $170,557 $220,852 $299,748 $467,356 $79,424 $133,906
$257,536 $315,544 $379,940 $299,748 $577,046 $224,410 $198,579
$5,124
$10,842
Included
$6,650
$3,217
$8,331 $6,535
$624 $737
$7,961
09/72/99 WATERS RISK MA~~AGEMENT