SUBJECT/RECOMMENDATION:
Title
Approve the purchase of excess liability, workers compensation and various specialty insurance policies from October 1, 2022 through September 30, 2023 at an amount not to exceed $1,400,000 pursuant to Clearwater Code of Ordinances Section 2.563(1)(i), Insurance, and authorize the appropriate officials to execute same. (consent)
Body
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, Inc.
These policies include the Ambridge Public Entity package through Lloyd’s Syndicate 2987 and United Specialty Insurance Company for General Liability (including EMT-Paramedics, Water Utility and Gas Utility), Automobile Liability, Errors and Omissions Liability, Excess Workers Compensation and Employers Liability pertaining to USL&H and Jones Act not covered by Safety National, Employee Benefits Liability, Crime, Law Enforcement Liability and Sexual Abuse Liability; a Marina Liability policy through Great American Insurance Company; an excess workers’ compensation policy through Safety National Casualty Corporation; and additional policies for Cyber Liability, Third Party Storage Tank Liability, Hull Protection and Indemnity, Fiduciary Liability, and numerous flood policies.
The renewal premium for the Ambridge Public Entity package is $372,453, a 10.10% increase over the expiring premium; however, it does not include Marina Liability coverage as in prior years. For this renewal, Marina Liability coverage will be provided by a separate policy with Great American Insurance Company at a premium of $43,900.
The renewal premium for excess workers compensation coverage with Safety National is $477,265, a 13.91% increase over the expiring premium.
Risk Management is also budgeting 23-28% increases for most specialty policies, and an increase of 133% for cyber liability coverage, due to volatile market conditions and availability for premiums not yet due but which will come due at various times during the next fiscal year. The need to budget these amounts now are two-fold. First, the City pays the premium through one purchase order to its broker, Arthur J. Gallagher Risk Management Services, Inc., who then pays the various insurers on the City’s behalf. Second, and unlike most purchases which the City typically has 30 days to pay, the premiums are due immediately on demand and therefore there would be insufficient time to bring the individual premium requests to Council.
The total requested not-to-exceed amount of $1,400,000 is a 7.69% increase over the current year amount of $1,300,000.
APPROPRIATION CODE AND AMOUNT:
5907590-545100 $1,400,000