SUBJECT/RECOMMENDATION:
Title
Approve the purchase of excess liability, workers compensation and various specialty insurance policies from, October 1, 2026 through September 30, 2027, in the not to exceed amount of $1,550,000.00 pursuant to Clearwater Code of Ordinances Section 2.563(1)(i), Insurance, and authorize the appropriate officials to execute same.
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SUMMARY:
The Risk Management Division of the Finance Department purchases certain excess and specialty insurance policies through the efforts of Arthur J. Gallagher Risk Management Services, LLC, pursuant to the Client Services Agreement approved by City Council on August 6, 2026. These policies include the following:
1. Ambridge Public Entity Excess Liability Package through Lloyd's Syndicate 4711, Lloyd's Syndicate 1686, Lloyd's Syndicate 2987, Endurance Worldwide Insurance Limited, and United Specialty Insurance Company for the following coverages: General Liability (including EMS Operations Liability), Automobile Liability, Errors & Omissions, Law Enforcement Liability, Sexual Harassment, Sexual Abuse, Employee Benefits Liability, Automobile & Mobile Equipment Physical Damage (over-the-road only), Crime, Failure to Supply Water, and Excess Employers' Liability (incidental USL&H and Jones Act Coverage);
2. Excess Workers Compensation through Safety National Casualty Corporation for Workers Compensation and Employer's Liability;
3. Marina Liability package through Great American Insurance Company; and
4. Additional specialty policies through various insurers for Cyber Liability, Third Party Storage Tank Liability, Hull Protection & Indemnity, Fiduciary Liability and numerous flood policies. Unmanned Aircraft (Drone) Liability now renews with the property insurance program effective April 1, 2025.
Premium Renewals:
1. The renewal premium for the Ambridge Public Entity Excess Liability Package policy is $532,440.00, a 10.65% decrease from the expiring premium.
2. The renewal premium for the Excess Workers Compensation policy is $559,357.00, a 4.83% decrease from the expiring premium.
3. The renewal premium for the Marina Liability package is $51,713.00, a 5.72% decrease from the expiring premium.
The new Client Services Agreement with Arthur J. Gallagher Risk Management Services, LLC, provides for an annual flat fee of $195,000 in lieu of broker commissions for certain policies. The above policies renewing on October 1st reflect a decrease because broker commissions totaling $167,239 are not included in the premiums. The Cyber Liability, Third Party Storage Tank Liability, and Hull Protection & Indemnity placements will also be included in the annual flat fee as they renew, as well as the property insurance policies which will be presented to City Council for approval prior to the April 1st renewal. The Fiduciary Liability and flood insurance policies will be subject to standard broker commissions to be included in the premiums as they renew.
Risk Management is estimating an average increase of approximately 25% for the specialty policies. The premiums will come due at various times throughout the coming fiscal year as the policies renew. The need to approve these amounts now is two-fold:
1. The City pays the premiums through one purchase order to its broker, Arthur J. Gallagher Risk Management Services, LLC, who then pays the various insurers on the City's behalf.
2. Typically, the City has 30 days to pay most invoices; however, insurance premiums are due immediately on demand and therefore there would be insufficient time to bring the individual premium requests to City Council for approval.
The total requested not to exceed amount of $1,550,000.00 reflects a decrease of 0.88% from the current year actual amount of $1,563,839.24, inclusive of the reduction for broker commissions. The total request would have reflected an increase of 9.8% net of the new commission structure.
APPROPRIATION CODE AND AMOUNT:
5907590-545100 $1,550,000.00
Funds are available in the Central Insurance Fund cost code 5907590-545100, Insurance Premiums, to fund these policies. The Central Insurance Fund is an internal service fund of the City which accounts for all insurance related costs.
USE OF RESERVE FUNDS: N/A
STRATEGIC PRIORITY:
1.1 Provide evidence-based measurement tools to continually guide municipal performance and promote accountable governance.
1.2 Maintain public infrastructure, mobility systems, natural lands, environmental resources, and historic features through systematic management efforts.
