Item Q7County Monroe
BOARD OF COUNTY COMMISSIONERS
of
Mayor George Neugent, District 2
The Florida Keys _ }
Mayor Pro Tern David Rice, District 4
Danny L. Kolhage, District 1
Heather Carruthers, District 3
Sylvia J. Murphy, District 5
County Commission Meeting
May 17, 2017
Agenda Item Summary
#3006
ADD ON DAY OF MEETING: WILL BE ITEM Q -7
BULK ITEM: Yes DEPARTMENT: Risk Management
TIME APPROXIMATE: STAFF CONTACT: Maria Slavik (305) 295 -3178
N/A
AGENDA ITEM WORDING: Approval to rescind BOCC's approval of Marsh USA's proposal for
purchase of Pollution Liability Insurance from Allied World Assurance Company (AWAC), and
approval to accept Marsh's proposal for purchase of equivalent insurance from Ironshore Specialty
Insurance Company ( Ironshore).
ITEM BACKGROUND: The County's Pollution Liability insurance with Ironshore expired on
May 1, 2017. The policy limits were $5,000,000 with a $50,000 deductible per incident. Staff issued
an RFP for competitive proposals for new Pollution Liability insurance to be effective commencing
May 1, 2017. Two proposals were submitted; one from both AWAC and Ironshore. AWAC
proposed a 3 year premium of $71,492. Ironshore proposed a 3 year premium of $76,964. An
Evaluation Committee reviewed the proposals and found that the terms and conditions of both
proposals were the same. With concurrence from the County's risk consultant, the Committee
recommended to the BOCC that it purchase the AWAC policy with Marsh USA continuing as agent.
The BOCC approved this recommendation (Agenda Item #M -8, BOCC meeting on April 12, 2017).
When the AWAC policy binder was received it was discovered that AWAC increased deductibles on
fuel tanks older than 20 years from $50,000 to $100,000 and increased a particular tank deductible to
$250,000. Marsh asked AWAC to reinstate the deductibles to $50,000 to be consistent with the
expiring policy and as approved by the BOCC. AWAC agreed to lower one deductible from
$250,000 to $100,000, but refused to lower any other deductibles. Due to the discrepancies, AWAC
has agreed to void its policy.
Meanwhile, Ironshore agreed to retain its $50,000 deductible for all incidents, to lower its premium
from $76,964 to $71,492, and to make the effective date of their policy May 1, 2017. So the County
avoids any lapse in coverage.
PREVIOUS RELEVANT BOCC ACTION: On 4/12/2017, the BOCC approved the Pollution
Liability proposal with AWAC.
CONTRACT /AGREEMENT CHANGES:
Marsh presented a proposal from Ironshore Specialty Insurance company. The proposal included
terms and conditions as to those of the expiring policy that included terms and conditions that
included limits of $5 million and a per occurence deductible of $50,000. Marsh/Ironshore proposed
a 3 year policy for a total premium of $71,492. This repsresents a decrease of $5,472.
STAFF RECOMMENDATION: Approval to rescind agenda item M -8 (AWAC's Pollution
Liability Insurance) approved at the BOCC April 12, 2017 meeting, and approval to purchase
Pollution Liability Insurance from Ironshore through Marsh for a total premium of $71,492 for a 3
year policy period of 5/1/17 - 5/1/20 and for staff to sign all necessary forms.
DOCUMENTATION:
Interisk Corporation Recommendation Letter dated 5/15/17
M8 AGENDA BACKUP Pollution Liability BOCC 4 12 17
FINANCIAL IMPACT:
Effective Date: 5/1/17
Expiration Date: 5/1/20
Total Dollar Value of Contract: $71,492.00
Total Cost to County: $71,492.00
Current Year Portion: $76,436.00
Budgeted: Yes
Source of Funds: Internal Service Fund Primarily Ad Valorem
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:
06/21/17 503 -08502 - RISK MGMT INSURANCE
$71,492.00
REVIEWED BY:
Maria Slavik
Completed
05/15/2017 1:53 PM
Chris Ambrosio
Completed
05/15/2017 3:57 PM
Bob Shillinger
Completed
05/15/2017 4:17 PM
Budget and Finance
Completed
05/15/2017 4:23 PM
Kathy Peters
Completed
05/15/2017 4:26 PM
Board of County Commissioners
Pending
05/17/2017 9:00 AM
I NTERISK CORPORATION
Consultants
Risk Management
Employee Benefits
1111 North Westshore Boulevard
Suite 208
Tampa, FL 336074711
Phone (813) 287 -1040
Facsimile (813) 287 -1041
May 15, 2017
Ms. Maria Slavik
Risk Management Specialist
Monroe County
502 Whitehead St.
Key West, Florida 33040
Subject: 2017 Pollution Liability RFP
Maria:
The County's Environmental Liability insurance expired on May 1, 2017. Coverage had been with
Ironshore Specialty Insurance Company with limits of $5,000,000 and a per incident deductible of $50,000.
Since it had been 3 years since this coverage had been competitively bid, the County issued an RFP for this
coverage. An Evaluation Committee was established and the Committee recommended that the coverage
be moved from Ironshore to Allied World Assurance Company with Marsh USA continuing to serve as the
agent. Based on Marsh's proposal it was believed that the terms and conditions of the policy would be the
same as they were with Ironshore. The BQCC supported and approved the Evaluation Committee's
recommendation at their April meeting.
When the binders (formal confirmation that the coverage had been bound) were received it was learned that
AWAC had increased the deductibles on fuel tanks that were older than 20 years from $50,000 to $100,000
and for one tank raised the deductible to $250,000. This issue was brought to Marsh's attention who
initiated negotiations with AWAC in an attempt to have them lower their deductibles back to $50,000 so
the program would be consistent with the expiring policy and what had been approved by the Board. After
considerable negotiations, AWAC agreed to lower the deductible on the tank that was subject to the
$250,000 deductible to $100,000 but did not agree to lower the deductibles any further.
Parallel to their negotiations with AWAC, Marsh also opened dialogue with Ironshore who also submitted
a proposal to the County's RFP. Ironshore had proposed a 3 year premium of $76,964 while AWAC
proposed a 3 year premium of $71,492. AWAC's lower premium was one of the major factors that lead the
Evaluation Committee to recommend AWAC. Marsh has convinced Ironshore to lower their 3 year
premium to $71,492 which now matches AWAC's proposed premium. Ironshore also agreed to retain the
$50,000 deductible for all incidents. In addition, Marsh has convinced AWAC to void their policy and
convinced Ironshore to pre -date the effective date of their policy to May 1, 2017 so there would be no lapse
of coverage.
It is recommended that the Board modify their April approval of placing the coverage with AWAC to
placing the coverage with Ironshore. This will allow the County to retain the coverage with terms and
conditions (to include the deductibles) consistent with the expiring policy for the same price that was
approved by the Board. It should be noted that both AWAC and Ironshore enjoy a favorable rating from
the AM Best Company, the leading evaluator of insurance company operations. Each member of the
Evaluation Committee was advised of this situation and has concurred with this change.
As always, please do not hesitate to call if you have any questions.
Cordially,
INTERISK CORPORATION
.'M D4&-�
Sidney G. Webber
CPCU, ARM
M.8
County of Monroe BOARD r couNTV COMMISSIONERS
Mayor Ge Neugcnt, District rict 2 2
The Florida Keys Mayor Pro Tern David Rice, District 4
Danny L. Kolhage, District 1
Heather Carruthers, District 3
Sylvia !_ Murphy, District 5
County Commission Meeting
April 12, 2017
A Item Number: M.8
Agenda Item Summary #2801
BULK ITEM: Yes DEPARTMENT: Risk Management
TIME APPROXIMATE: STAFF CONTACT: Maria Slavik
N/A
AGENDA ITEM WORDING: Approval to accept proposal from Marsh USA and purchase
Pollution Liability Insurance through Allied World Assurance Company (AWAC) at a cost of
$71,492 for a 3 year policy and authorize staff to sign all necessary forms.
ITEM BACKGROUND:
This recommended Pollution Liability Insurance Policy issued by AWAC will provide coverage to
the County for potential liability associated with an accidental discharge of pollutants from one of its
fuel storage tanks and the potential liability associated with a pollution incident at other scheduled
County locations. Competitive proposals for Pollution Liability Insurance were sought. Proposals
from two (2) agentstbrokers were received, reviewed and ranked by an Evaluation Committee.
Various options regarding the terms and conditions of the policies and deductibles were received
from each proposer. The AWAC policy has a total premium of $71,492 for a three (3) year period of
5/1/17 - 5/1/20. Tile Evaluation Committee ranked the AWAC policy first. This ranking and
recommendation is supported by the County's insurance consultant.
PREVIOUS RELEVANT BOCC ACTION:
The equivalent insurance policy was last bid in January, 2011, and approved by the BOCC on April
20, 2011.
CONTRACT /AGREEMENT CHANGES:
Marsh presented a proposal from Allied World Assurance Company (AWAC). Marsh's AWAC
proposal included terms and conditions comparable to those of the expiring policy that included
limits of $5 million and a per occurence deductible of $50,000. Marsh/AWAC proposed a 3 year
policy for a total premium of $71,492. This represents a decrease of $4,944 from the prior premium.
STAFF RECOMMENDATION: Approval to purchase Pollution Liability Insurance through
AWAC for a total premium of $71,492 for a 3 year policy period of 5/1/17- 5/1/20 and for staff to
sign all necessary forms.
DOCUMENTATION:
Packet Pg. 2003
M.8
Interisk Recommendation Letter re: Pollution Liability Ins. and Evaluation Comm.
FINANCIAL IMPACT:
Effective Date: 5/1/17
Expiration Date: 5/1/20
Total Dollar Value of Contract: $71,492.00
Total Cost to County: $71,492.00
Current Year Portion: $76,436.00
Budgeted: Yes
Source of Funds: Internal Service Fund Primarily Ad Valorem
CPI: N/A
Indirect Costs: NIA
Estimated Ongoing Costs Not Included in above dollar Amounts: N/A
Revenue Producing: No
Grant: N/A
County Match: NIA
Insurance Required: N/A
Addition Details:
If yes, amount:
04/12/17 503 -08502 • RISK MGMT INSURANCE
$71,492.00
REVIEWED BY:
Maria Slavik
Completed
03/24/2017 10:18 AM
Chris Ambrosio
Completed
03/24/2017 4:31 PM
Bob Shillinger
Completed
03/26/2017 4:40 PM
Budget and Finance
Completed
03/27/2017 9:02 AM
Kathy Peters
Completed
03/27/2017 9:31 AM
Board of County Commissioners
Pending
04/12/2017 9:00 AM
Packet Pg. 2004x;
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I NTERISK CORPORATION ti
Consultants
Risk Management
Employee Benefits
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607 -4711
Phone (813) 287 -1040
Facsimile (813) 287 -1041
March 20, 2017
Ms. Maria Slavik
Risk Management Specialist
Monroe County
502 Whitehead St.
Key West, Florida 33040
Subject: 2017 Pollution Liability RFP
Maria:
The County's Pollution Liability insurance expires on May 1, 2017. Currently, the coverage is provided by
Ironshore Specialty Insurance Company with limits of $5 million and a per occurrence deductible of
550,000. Coverage was provided for a 3 year term (511114 — 511117) for a total premium of $75,455.
Marsh USA serves as the County's agent for this coverage.
In accordance with the County's Purchasing Protocols, an RFP for the County's Pollution Liability
coverage was posted on Demandslar on January 24, 2017. An addendum was later posted on Demandstar
on February 14, 2017 that responded to all questions submitted by interested proposers. Scaled proposals
were received through March 14, 2017 when they were pub] ically opened. Two agents submitted
proposals. One was submitted by the Seaboard Agency that is located in Key West and 2 separate
proposals were submitted by Marsh USA that is located in Sunrise Florida.
An Evaluation Committee was established that included the following County employees:
Ms. Maria Slavik
Ms. Monique Lewinski
Ms. Judith Clark
I was asked to serve as the technical advisor to the Evaluation Committee. As such I personally reviewed
each proposal submitted.
The Seaboard Agency proposed coverage from the Liberty Surplus Insurance Corporation. Liberty enjoys
a favorable rating from the A.M. Best Company, the leading evaluator of insurance company operations.
Seaboard proposed terms and conditions comparable to those of the expiring policy that included limits of
55 million and a per occurrence deductible of $50,000. Seaboard proposed a 3 year policy for a total
premium of 565.000.
Marsh proposed one of their options from Ironshore Specialty Insurance Company (the incumbent insurer).
Ironshore enjoys a favorable rating from the A.M. Best Company. Marsh's Ironshore proposal included
terms and conditions comparable to those of the expiring policy that included limits of S5 million and a per
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occurrence deductible of $50,000. Marsh/lronshore proposed a 3 year policy for a total premium of
$76,964. a
Marsh also submitted a proposal from Allied World Assurance Company (AWAQ. AWAC enjoys a
favorable rating from the A.M. Best Company. Marsh's AWAC proposal included terms and conditions
comparable to those of the expiring policy that included limits of $5 million and a per occurrence
deductible of $50,000. Marsh/AWAC proposed a 3 year policy for a total premium of $71,492.
The Evaluation Committee met on March 20, 2017 to discuss the proposals received. The Committee
unanimously is recommending the Marsh/AWAC proposal. The Committee collectively had concerns with
Seaboard's experience with Pollution Liability coverages and their experience with governmental entities.
This was demonstrated by the fact that Seaboard had to rely on a "Co- Broker' to assist them in developing
their proposal and this organization would remain as a "Co- Broker" for the term of the policy.
I concur with the Evaluation Committee's recommendation to place the County's Pollution Liability
coverage for the 511117 to 511/20 policy term with Allied World Assurance Company as being submitted by
Marsh USA.
As always, please do not hesitate to call if you have any questions.
Cordially,
INTERISK CORPORATION
"JA DW,�
Sidney G. Webber
CPCU, ARM