Item M03County of Monroe
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BOARD OF COUNTY COMMISSIONERS
Mayor George Neugent, District 2
The Florida. Key
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Mayor Pro Tem David Rice, District 4
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Danny L. Kolhage, District I
Heather Carruthers, District 3
Sylvia J. Murphy, District 5
County Commission Meeting
April 12, 2017
Agenda Item Number: M.3
Agenda Item Summary #2772
BULK ITEM: Yes DEPARTMENT: Risk Management
TIME APPROXIMATE: STAFF CONTACT: Maria Slavik
N/A
AGENDA ITEM WORDING: Approval of the purchase of a General and Professional Liability
Insurance policy with Colony Insurance Company for Bayshore Manor and for the Risk
Administrator to sign all necessary forms.
ITEM BACKGROUND:
The recommended Colony Insurance Co. insurance policy provides General and Professional
Liability and Wrongful Acts /Vicarious Liability coverage as required for the County to maintain a
State of Florida Assisted Living Facility License and also covers claims alleging sexual and /or
physical abuse at Bayshore Manor. A limited number of insurers offer this unique coverage, terms
and conditions. The current policy annual premium plus fees was $14,576.00. The recommended
new quote and policy has no fees and an annual premium of $16,034.00 with no deductible. A
competitive quote providing comparative coverage from Hiscox Insurance Co. (Lloyds of London)
has a premium of $13,465.00 subject to a per claim $2,500 deductible. Attempts to locate another
alternative, comparable, qualifying insurance policy at a lower cost has been unsuccessful or the
costs and terms were not as favorable for the County. Based on the per claim deductible required by
Hiscox, the County's insurance consultant recommends the purchase of the Colony policy despite the
higher premium. The County's consultant's letter recommending the Colony Ins. Co. policy is
attached. Due to the unique terms, conditions and specific coverage required by the County in this
circumstance the purchase of this exclusive insurance is exempt from competitive bidding
procedures pursuant to MCC Sec. 2- 347(e)(5)(g) and County purchasing policy Chapter 10.
PREVIOUS RELEVANT BOCC ACTION:
The BOCC approved renewals of the prior equivalent Colony Ins. Co. insurance policy on 4/16/14,
4/15/15 and 4/20/16.
CONTRACT /AGREEMENT CHANGES:
Provides an annual policy for coverage period effective 4/30/17 to 4/30/2018. Premium of
$16,034.00 and no fees represents an increase of $1,458.00 (10 %) from the prior renewal of this
policy.
STAFF RECOMMENDATION: Approval of the purchase of Colony Ins. Co insurance policy for
Bayshore Manor and for the Risk Administrator to sign all necessary forms.
DOCUMENTATION:
Interisk Recommendation Letter & Arthur J. Gallagher Transmittal Letter
FINANCIAL IMPACT:
Effective Date: 4/30/17
Expiration Date: 4/30/18
Total Dollar Value of Contract: $16,034.00
Total Cost to County: $16,034.00
Current Year Portion: $14,576.00
Budgeted: Yes
Source of Funds: Internal Service Fund /Primarily Ad Volorem
CPI: N/A
Indirect Costs: N/A
Estimated Ongoing Costs Not Included in above dollar amounts: N/A
Revenue Producing: No
Grant: N/A
County Match: N/A
Insurance Required: N/A
Additional Details:
If yes, amount:
04/12/17 503 -08502 - RISK MGMT INSURANCE $16,034.00
hRW TA1 IH11."
Maria Slavik
Completed
03/21/2017 1:00 PM
Chris Ambrosio
Completed
03/22/2017 2:54 PM
Bob Shillinger
Completed
03/26/2017 4:43 PM
Budget and Finance
Completed
03/27/2017 8:50 AM
Kathy Peters
Completed
03/27/2017 9:15 AM
Board of County Commissioners
Pending
04/12/2017 9:00 AM
I NTERISK CORPORATION
Consultants
Risk Management
Employee Benefits
March 13, 2017
Ms. Maria Slavik, CPM
Risk Administrator
Monroe County
1 l 11 12 Street
Suite 408
Key West, Florida 33040
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607 -4711
Phone (813) 287 -1040
Facsimile (813) 287 -1041
Subject: Renewal of Bayshore Manor's General Liability and Professional Liability Insurance
Dear Maria:
Bayshore Manor's General and Professional Liability insurance policy expires on April 30, 2017. Arthur J.
Gallagher serves as the County's insurance agent for this coverage. Gallagher has submitted two separate
proposals for the renewal of this policy which have been reviewed in detail.
Currently, Colony Insurance Company is providing the coverage with Per Occurrence limits of $1 million
and a $3 million Annual Aggregate. Colony enjoys a favorable rating from the A.M. Best Company, the
leading evaluator of insurance company operations. Coverage is provided on a "Claims Made" basis with a
Retroactive Date of April 16, 2004 for the General Liability coverage and a Retroactive Date of April 30,
2003 for the Professional Liability coverage. Claims Made policies provide coverage for claims that occur
after the Retroactive Date and are first reported to the insurer during the policy period. This compares to
policies written on an "Occurrence" basis that provides coverage for claims that occur during the policy
period and do not contain a Retroactive Date. The annual premium of the expiring policy is $14,576.00
Gallagher has submitted a renewal proposal from Colony with terms and conditions consistent with the
expiring policy for an annual premium of $16,034.00. This represents an increase of $1,458.00 (10 %).
Gallagher also submitted a proposal from Hiscox Insurance Company (Lloyds of London) that provided
slightly broader coverages (none impacting the level of the County's protection). Hiscox submitted a
proposed premium of $13,465.00. As with Colony, Hiscox enjoys a favorable rating from the A.M. Best
Company.
There was one feature of the Hiscox proposal that is not a favorable as the Colony proposal. The County's
current coverages and Colony's renewal proposal would not be subject to a deductible. The Hiscox
coverages would be subject to a per claim deductible of $2,500. This means that the County would have to
absorb the first $2,500 of each claim if the Hiscox option were selected. Over the past several years there
have been several claims occurring at Bayshore. None of the claims resulted in the County being held
liable for the damages.
Despite the fact that Hiscox has proposed a lower premium then Colony, it is still recommended that the
County renew Bayshore Manor's General and Professional Liability with Colony for the 2017118 policy
term. Colony has been providing the County's coverage for a number of years and their premiums have
been relatively stable. This coupled with the fact that all claims under the Hiscox policy would be subject
to a $2,500 deductible lead me to this recommendation.
It is therefore recommended that Monroe County renew Bayshore Manor's General and Professional
Liability coverage with Colony Insurance Company for the April 30, 2017 to April 30, 2018 policy term as
being proposed by Arthur J. Gallagher.
Please give me a call if you have any questions or wish to discuss this issue in more detail.
Cordially,
INTERISK CORPORATION
Sidney G. Webber
CPCU, ARM
Monroe County Board of Commissioners
Transmittal Letter/ Executive Summary
March 10, 2017
Maria Slavik, CPM
Risk Administrator
Monroe County BOCC
1100 Simonton Street, Suite 2 -268
Key West, FL 33040
Re Bayshore Manor Assisted Living Facility
Policy Term: April 30, 2017 to April 30, 2018
Dear Maria:
On behalf of Arthur J. Gallagher Risk Management Services, Inc, and the Account Service
Team, we are pleased to present our proposal for General Liability including Professional Liability coverage
expiring April 30, 2017
This proposal includes the renewal terms negotiated by Arthur J: Gallagher Risk Management
Services, Inc. for the following coverage
• General Liability including Professional Liability
Colony Insurance Company, the expiring carrier, has offered a renewal this year but with a 10% increase in the
premium. We have, however, obtained an optional quote from Lloyds of London with broader coverage for a
reduced renewal premium. Coverage comparison is provided in this proposal.
'Premium
'Expiring Premium
Colony, Insurance Co.
$14,576.00
Renewal Premium
Colony Insurance Co .
$16,034.00
Optional Renewal
. Lloyds oflondon
,I
$13,465,00
FL fees - FHCF
NA
NA
i
NA
Inspection Fee
NA
NA
NA
TOTAL
$14,576.00
$16,034.00
$13,465.00
'TRIAITRIPRA is not included — see coverage nacre 15 for premium
Market Review: Obtaining a comprehensive and competitively priced program of insurance in the marketplace
requires more than access to the market. Past experience and credibility with markets are the foundation of a
successful campaign for your company. Complete and accurate submissions, with detailed specifications, are
essential. Gallagher companies made a complete and personal presentation to each company contacted.
insurance , Carrier.
Carrier's f Position
Colony Insurance Co. ( incumbent)
Quoted
Lloyds of London /Hiscox
Quoted
Monroe County Board of Commissioners
Transmittal Letter/ Executive Summary (Cont.)
Subjectivitles to bind: Along with the Client Authorization to Bind, TRIA form and Surplus Lines Disclosure, we will
need;
• Client Authorization to Bind
TRIA accept/reject form
• Surplus Lines Disclosure form
• Client Authorization to Bind
TRIA accept/reject form
• Surplus Lines Disclosure form
-PRIOR TO BINDING - Currently signed and dated GL Application
® -PRIOR TO BINDING - Staff breakout and number of staff per shift
• -PRIOR TO BINDING -- Recent Stale inspection
• -PRIOR TO BINDING — Completed, dated and signed Sexual Abuse & Misconduct application
IMPORTANT REMINDER Colony is Claims Made Coverage: Should you decide to change carriers, you
must report any known claims or situations that may give rise to a claim before the end of the policy term
4130117.
Should you elect to change carriers (if a new retro- active date is provided) or non -renew this policy, a supplemental
extended reporting endorsement may be available subject to policy terms and conditions. You must request the
extended reporting period in writing to the carrier within 60 days after the expiration date, The cost of this extended
reporting period is 200% of the annual premium and is fully earned. The extended reporting period extends only to
those claims that occurred prior to the expiration date and would have been covered by the policy. Claims must be
reported to the carrier before the end of the policy period. The extended reporting period does not increase the limits
of liability and is subject to all policy terms, conditions and exclusions.
We have worked diligently to present Monroe County the most competitive terms and coverage for the right premium,
Arthur J. Gallagher Risk Management Services, Inc. thank you for the opportunity to be of continued service.
Sincerely,
Kathy Hill!, CIC
Client Service Manager Senior
cc Sid Webber, ARM, CPCU