SUBJECT/RECOMMENDATION:
Title
Approve the purchase of excess Property insurance, including Bridges, Boiler and Machinery, and Terrorism coverages, from April 1, 2025 through April 1, 2026, at the level of insurance provided for in this agenda item in a not-to-exceed amount of $5,275,000 and authorize the appropriate officials to execute same. (consent)
Body
SUMMARY:
Risk Management requested Arthur J. Gallagher and Co. to obtain quotes for the property insurance program expiring April 1, 2025. After a review of quotes received, we request the renewal of our property coverage with a layer of coverage limits provided by various carriers.
The current property coverage with Great American, Berkshire Hathaway, and additional sub-carriers expires on April 1, 2025. This renewal will continue to maintain our Named Windstorm coverage at $50 million, and flood insurance at $50 million on an aggregate basis. The self-insured retention (SIR) will remain at 5% for named storms and floods subject to $100,000 minimum per occurrence, and no maximum deductible. The annual renewal will continue to be subject to a loss ratio provision of 100% for Named Windstorm and 40% for all other perils. The renewal premium for property is $4,900,000 reflecting a 9.27% premium decrease.
The renewal for Boiler and Machinery Coverage will remain at a $200 million limit with a $25k deductible for a premium of $93,000 reflecting a 5.04% premium decrease.
The City’s bridge program is a stand-alone policy and includes Sand Key Bridge, Mandalay Channel pedestrian bridge and the McMullen Booth pedestrian overpass. This renewal is a 50/50 shared capacity between Zurich and Chubb to maintain the $50 million Named Windstorm and Flood policy limits. The renewal bridge policy has a deductible of $100,000 per occurrence for all other perils and earthquakes for the Mandalay Channel and McMullen Booth bridges, and $1 million for the Sand Key bridge. The Self-Insured Retention (SIR) for Flood and Named Windstorm is 5% of the total covered value of a loss, subject to a $500,000 minimum deductible. The annual aggregate limit for the perils of Earthquake/Flood/Named Storm is $50 million each and for All Other Perils is $82,938,010. The Bridge program renewal premium is $230,000 reflecting a 20.39% premium increase.
The renewal for Terrorism - Property & Liability coverage will continue at limits of $25 million for property damage and $10 million for liability for a premium of $26,500 reflecting a 19.38% premium decrease.
The City also purchases a separate policy which provides Nuclear, Biological, Chemical & Radioactive Terrorism coverage with limits of $3 million, for a premium of $25,500 reflecting a 20.93% premium decrease.
Total premiums for these renewals are estimated to be $5,275,000. This represents a 12.38% decrease from last year’s approved not-to-exceed total of $6,020,000; and an 8.34% decrease of premiums from last year’s actual renewals.
Risk Management agrees that these recommended coverages will continue to cover the City's property risks at levels and rates which represent a reasonable insurance program for the City.
APPROPRIATION CODE AND AMOUNT:
5907590-545100 $5,275,000
Funds for this these purchases are available in Central Insurance cost code 5907590-545100 (Property & Liability Insurance). The Central Insurance Fund is an Internal Service Fund of the City established to account for all insurance related expenditures.
USE OF RESERVE FUNDS:
N/A
STRATEGIC PRIORITY:
1.2 Maintain public infrastructure, mobility systems, natural lands, environmental resources, and historic features through systematic management efforts.
