Item M09County of Monroe
A
BOARD OF COUNTY COMMISSIONERS
Mayor George Neugent, District 2
IleOrlda Keys
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Mayor Pro Tem David Rice, District 4
�r
Danny L. Kolhage, District 1
Heather Carruthers, District 3
Sylvia J. Murphy, District 5
County Commission Meeting
April 12, 2017
Agenda Item Number: M.9
Agenda Item Summary #2805
BULK ITEM: Yes DEPARTMENT: Risk Management
TIME APPROXIMATE: STAFF CONTACT: Maria Slavik
N/A
AGENDA ITEM WORDING: Approval to accept Marsh USA proposal and renew Property
Insurance from Lloyds of London Ins. Co. (Lloyds) and Landmark American Ins. Co. (Landmark),
and Boiler and Machinery Insurance from Hartford Steam Boiler Ins. Co. (HSB).
ITEM BACKGROUND:
Marsh USA has proposed to renew the County's Property Insurance with Lloyds and Landmark for
an annual premium of $518,205. Lloyds' premium will be $450,004 and Landmark's premium will
be $68,201. This represents a decrease of $13,987 (2.6 %) in the County's annual premium. Lloyds
and Landmark propose to renew the County's Property Insurance policy and excess policy with an
increase of the sub - limits for the policy's Building and Ordinance coverage from $5 million to $10
million and the sub -limit for Builders Risk claims increased from $2.5 million to $5 million. The
renewal provides replacement cost property insurance coverage for County buildings, contents,
communication towers and contractors equipment with a current value of $235,316,591. Coverage
for wind and flood losses is limited to $5 million in excess of the limits provided by the State
administered wind program (Citizens) and the National Flood Insurance Program (NFIP). (The
maximum limits under the Citizens program are $1 million per building and maximum limits under
the NFIP are $500,000 per building.)
HSB has agreed to renew the County's Boiler and Machinery coverage for an annual premium of
$9,979. This represents an increase of $231 (2 %). This increase is due to the County's increased
Total Insured Values by over $5 million. The terms, conditions and coverages of HSB's renewal
policy will be the same as the expiring policy.
Combining Marsh's proposed premium of $450,004 for the Lloyds' Primary Property policy plus
Marsh's proposed premium of $68,201 for Landmark's Excess Property policy plus Marsh's
proposed premium of $9,979 for HSB's Boiler and Machinery policy, the County's total
Property /Boiler and Machinery premium for the 5/1/17 to 5/1/18 policy term will be $528,184.
PREVIOUS RELEVANT BOCC ACTION:
1/21/15 - BOCC approved the Marsh USA bid proposal and insurance purchases. 4/20/16 — BOCC
approved renewal of the current policies.
CONTRACT /AGREEMENT CHANGES:
Marsh USA proposed Property Insurance with Lloyds and Landmark for annual premium of
$518,205. This represents a decrease of $13,987 (2.6 %). HSB proposed Boiler and Machinery
Insurance for an annual premium of $9,979. This represents an increase of $231 (2 %).
STAFF RECOMMENDATION: Approval to accept Marsh USA proposal and renew Property
Insurance from Lloyds and Landmark, and Boiler and Machinery Insurance from HSB, and for
authorized staff to execute all required documents.
DOCUMENTATION:
Interisk Recommendation Letter re: Property, Boiler and Machinery Renewal (pdf)
FINANCIAL IMPACT:
Effective Date: 5/1/2017
Expiration Date: 5/1/2018
Total Dollar Value of Contract: $528,184.00
Total Cost to County: $528,184.00
Current Year Portion: 541,940.00
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:
04/12/17 503 -08502 - RISK MGMT INSURANCE
Insurance
$528,184.00
REVIEWED BY:
Maria Slavik
Completed
03/27/2017 10:38 AM
Chris Ambrosio
Completed
03/27/2017 2:26 PM
Bob Shillinger
Completed
03/27/2017 5:50 PM
Budget and Finance
Completed
03/28/2017 8:03 AM
Kathy Peters
Completed
03/28/2017 9:08 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
1111 12' Street
Suite 408
Key West, Florida 33040
Subject: Renewal of Monroe County's Property Insurance
Dear Maria:
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607 -4711
Phone (813) 287 -1040
Facsimile (813) 287 -1041
Monroe County's Property/Boiler & Machinery Insurance expires on May 1, 2017. The expiring Property
policy is provided by Lloyds of London and Landmark American Insurance Company. Both Lloyds and
Landmark enjoy a favorable rating from the A.M Best Company, the leading evaluator of insurance
company operations. The County is currently paying an annual premium of $532,192 for this coverage.
In addition to the County's Property insurance, the County purchases a stand -alone Boiler & Machinery
policy from Hartford Steam Boiler Insurance Company (HSB) that provides coverage for damage to
mechanical and electrical equipment. The primary purpose of this coverage is to provide inspections of
boiler equipment that is required by the State; HSB also enjoys a favorable rating from the A.M. Best
Company; The premium for the expiring policy is $9,748.
Marsh USA (the County's insurance agent) has proposed to renew the County's Property Insurance with
Lloyds and Landmark for an annual premium of $518,205. Lloyds' premium will be $450 and
Landmark's premium will be $68,201. This represents a decrease of$13,98'7 (2,6 %) in the County's
annual premium.
The following table compares the major features of the proposed Property renewal program to those of the
program that is about to expire.
Lloyds and Landmark have agreed to renew the County's program with comparable terms and conditions
for a premium that is $13,987 (2.6 %) less than what the County paid for their 2016! 17 policy despite the
fact that their Total Insured Values have increased by $5,281,708. In addition, Lloyds and Landmark has
agreed to increase the sub - limits for the policy's Building and Ordinance coverage from $5 million to $l0
million. They have also agreed to raise the sub -limit for Builders Risk claims from $2 to
$5,000,000. Both of these enhancements are viewed as significant improvements to the County's Property
program. Lloyds and Landmark have agreed not to reduce any of the expiring policy's terms, conditions or
coverages,.
HSB has agreed to renew the County's Boiler and Machinery coverage for an annual premium of $9,979.
This represents an increase of $231 (2 %). This increase is due to the fact that the County has increased
their Total Insured Values by over $5 million. The terms, conditions and coverages of HSB's renewal
policy will be the same as the expiring policy.
Combining Marsh's proposed premium of $450,004 for the Lloyds Primary Property policy plus Marsh's
proposed premium of $68,201 for Landmark's Excess Property policy plus Marsh's proposed premium of
$9,979 for Hartford Steam Boiler's Boiler and Machinery policy, the County's total Property/Boiler and
Machinery premium for the 5! 1117 to 5 11118 policy term will be $528,184.
It is believed that Marsh's Property and Boiler and Machinery proposals should be viewed as favorable
renewals and it is recommended that the County renew its Property coverages with Lloyds and Landmark
and their Boiler and Machinery with Hartford Steam Boiler as being proposed by Marsh for the 51111"17 to
511 €` 18 policy term.
Expiring Program
Renewal Program
Total Insurable Limit
$230,034,883
$235,316,591
Overall Policy Limits
$230,034,883
$235,316,591
Major Sub - Limits
Named Windstorm
$5,000,000
$5,000,000
Flood
$5,000,000
$5,000,000
Building and Ordinance
$5,000,000
$10,000,000
Builders Risk
$2,500,000
$5,000,000
Extra Expense
$5,000,000
$5,000,000
Deductibles
Basic
$50,000 per Occurrence
$50,000 per Occurrence
Named Windstorm
$1 Million pr Location/Per
$1 Million pr Location/Per
Occurrence
Occurrence
Flood losses at properties not
located in Flood Zones A & V
$100,000
$100,000
and Flood losses not related to a
Named Windstorm
Flood losses at properties located
5°x°0 of the property damaged,
5% of the property damaged,
in Flood Zones A & V
subject to a minimum of $1
subject to a minimum of $1
Million
Million
Flood losses resulting from a
$1 Million per location per
$1 Million per location per
Named Windstorm
occurrence
occurrence
$5,000 except $50,000 for Named
$5,000 except $50,000 for Named
Contractors Equipment
Windstorm
Windstorm
$5,000 except $50,000 for Named
$5,000 except $50,000 for Named
Communication Towers
Windstorm
Windstorm
Emergency Materials Arresting
$50,000 except 25% of loss
$50,000 except 25% of loss
System (EMAS)
subject to a $500,000 minimum
subject to a $500,000 minimum
for damage caused by aircraft
for damage caused by aircraft
Lloyds and Landmark have agreed to renew the County's program with comparable terms and conditions
for a premium that is $13,987 (2.6 %) less than what the County paid for their 2016! 17 policy despite the
fact that their Total Insured Values have increased by $5,281,708. In addition, Lloyds and Landmark has
agreed to increase the sub - limits for the policy's Building and Ordinance coverage from $5 million to $l0
million. They have also agreed to raise the sub -limit for Builders Risk claims from $2 to
$5,000,000. Both of these enhancements are viewed as significant improvements to the County's Property
program. Lloyds and Landmark have agreed not to reduce any of the expiring policy's terms, conditions or
coverages,.
HSB has agreed to renew the County's Boiler and Machinery coverage for an annual premium of $9,979.
This represents an increase of $231 (2 %). This increase is due to the fact that the County has increased
their Total Insured Values by over $5 million. The terms, conditions and coverages of HSB's renewal
policy will be the same as the expiring policy.
Combining Marsh's proposed premium of $450,004 for the Lloyds Primary Property policy plus Marsh's
proposed premium of $68,201 for Landmark's Excess Property policy plus Marsh's proposed premium of
$9,979 for Hartford Steam Boiler's Boiler and Machinery policy, the County's total Property/Boiler and
Machinery premium for the 5! 1117 to 5 11118 policy term will be $528,184.
It is believed that Marsh's Property and Boiler and Machinery proposals should be viewed as favorable
renewals and it is recommended that the County renew its Property coverages with Lloyds and Landmark
and their Boiler and Machinery with Hartford Steam Boiler as being proposed by Marsh for the 51111"17 to
511 €` 18 policy term.
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