Item O4C ounty of M onroe
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BOARD OF COUNTY COMMISSIONERS
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Mayor David Rice, District 4
The FlOnda Key
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Mayor Pro Tem Sylvia J. Murphy, District 5
Danny L. Kolhage, District 1
George Neugent, District 2
Heather Carruthers, District 3
County Commission Meeting
July 18, 2018
Agenda Item Number: 0.4
Agenda Item Summary #4407
BULK ITEM: Yes DEPARTMENT: Risk Management
TIME APPROXIMATE: STAFF CONTACT: Maria Slavik (305) 295 -3178
N/A
AGENDA ITEM WORDING: Approval to accept proposal for renewal of Airport Liability
Insurance from ACE Property and Casualty Ins. Co. through Arthur J. Gallagher & Co. with annual
premium of $35,905.00, and for the Risk Administrator to sign all necessary forms.
ITEM BACKGROUND: Monroe County's airport liability insurance policy with ACE Property
and Casualty Ins. Co. (ACE) expires on July 27, 2018. The proposed renewal policy through ACE
provides the same $100,000,000.00 in liability coverage for airport operations in Key West and
Marathon. ACE agreed to renew the policy with terms and conditions consistent with the expiring
policy with an annual premium $35,905.00 and no deductible. This represents an increase of
$2,350.00 (7 %) from the current annual premium of $33,555.00. ACE indicated that several costly
general airline incidences, that did not include Monroe County, during the past 12 months have
caused insurers to raise premiums. The renewal policy effective dates are 7/27/18 - 7/27/19. The
County's risk consultant's letter providing analysis and recommending this renewal is attached.
PREVIOUS RELEVANT BOCC ACTION: 7/20/16 - BOCC approved the current ACE airport
liability insurance policy proposed by Arthur J. Gallagher & Co. insurance broker
CONTRACT /AGREEMENT CHANGES:
Renew Airport Liablity Insurance with Ace Property and Casualty Ins. Co. through Arthur J.
Gallagher. The proposed annual premium will be $35,905. This represents an increase of $2,350
(7 %).
STAFF RECOMMENDATION: Approval
DOCUMENTATION:
6.25.18 Interisk Corp. Recommendation Letter & Arthur J. Gallagher Client Authorization to Bind
Airport Liability Ins.
FINANCIAL IMPACT:
Effective Date: 7/27/18
Expiration Date: 7/27/19
Total Dollar Value of Contract: $35,905.00
Total Cost to County: $35,905.00
Current Year Portion: $33,555.00
Budgeted: yes
Source of Funds:
CPI: N/A
Indirect Costs: N/A
Estimated Ongoing Costs Not Included in above dollar amounts:
Revenue Producing: No
Grant: N/A
County Match: N/A
Insurance Required: N/A
Additional Details:
If yes, amount:
07/18/18 404 -63001 - KEY WEST AIRPORT O & M
$35,905.00
REVIEWED BY:
Maria Slavik
Completed
07/02/2018 9:13 AM
Chris Ambrosio
Completed
07/02/2018 9:45 AM
Bob Shillinger
Completed
07/02/2018 2:47 PM
Budget and Finance
Completed
07/02/2018 5:20 PM
Kathy Peters
Completed
07/02/2018 5:52 PM
Board of County Commissioners
Pending
07/18/2018 9:00 AM
I NTERISK
CORPORATION
0
Consultants
Risk Management
Employee Benefits
June 25, 2018
Ms. Maria Slavik, CPM
Risk Administrator
Monroe County
I I 1112' Street
Suite 408
Key West, Florida 33040
Subject: Renewal of Airport Liability Insurance
Dear Maria:
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607 -4711
Phone (813) 287 -1040
Facsimile (813) 287 -1041
The County's Airport Liability policy expires on July 27, 2018. The policy is currently provided by ACE
Property and Casualty Insurance Company with limits of $100 million. The policy also contains various
sub - limits. Some of the more notable sub - limits are as follows:
Personal Injury and Advertising $50 million
Fire Damage $250,000
Medical Expense $25,000
Excess Automobile Liability $50 million
Excess Employers Liability $50 million
It is not believed that any of the above sub- limits materially impacts the protection being purchased by the
County.
There are no deductibles associated with this policy. The annual premium for the current policy (7127117—
7127118) is $33,555.00
ACE has agreed to renew the County's Airport Liability policy with terms and conditions consistent with
the expiring policy for $35,905. This represents an increase of $2,350 (7 %). ACE has cited several costly
airline incidences that have occurred during the past 12 months for the increase in the premium. While
these incidences did not involve Monroe County they have prompted insurers to raise their premiums.
Ace has also offered an alternative proposal that would include a $10,000 per claim deductible for an
annual premium of $33,555 (the same premium paid for the 2017118 policy term). While this would result
in a savings of $2,350, one claim could wipe out any savings. It is recommended that Ace's $10,000
deductible option be eliminated from further consideration.
Gallagher also submitted a proposal from QBE Insurance Company with terms and conditions consistent
with the expiring policy. QBE's proposed premium was $39,975. Since QBE's premium is higher than the
one being proposed by ACE with no enhancements of coverage, it is recommended that the QBE proposal
be eliminated from further consideration,
CL
bisbelieved that ACE`x renewal proposal is attractive and U\s recommended that the County renew its
Airport Liability Insurance Policy with ACE Property and Casualty Insurance Company, as being proposed
by Arthur 1. Gallagher for the policy term 7/27/18 to 7/27/19. Ui
Please give me a call if you have any question.% or wish to discuss this issue in more detail.
ONTBRISK CORPORATION
Sidney [LWebber
CPCU, ARM
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Client Authorization to Bind Coverage
After careful consideration of your proposal dated June 7 we accept your insurance program
subject to the following exceptions/changes:
Policy Options:
I I I Bind All Policies As Shown Herein as shown below: I
❑ ❑ ACE USA -- As Quoted - $39,905 - 50_deductible
❑ ❑ ACE USA — As Quoted - $33.555 - $10.000 deductible
Options
❑ ❑ ADD WAR ENDORSEMENT - Quote Available On Request
❑ ❑ ADD TRIA — Quote Available On Request
❑ ❑ ADD WAR & TRIA Quote Available On Request
I I I Provide Quotations or Additional Information on the following Coverage
Considerations
It is understood this proposal provides only a summary of the details; the policies will contain the
actual coverages.
We confirm the values, schedules, and other data contained In the proposal are from our records and
acknowledge it is our responsibility to see that they are maintained accurately.
Client Signature
Dated
IR
Packet Pg. 2282
P OLICYHOLDER ,,
NOTICE OF .O.
You are hereby notified that under the Terrorism Risk Insurance Act, as amended, you have a right to purchase insurance
Coverage for losses resulting from acts of terrorism, as defined in Section 102(I) of the Act: The term "act of terrorism"
means any act that is certified by the Secretary of the Treasury- in consultation with the Secretary of Homeland Security,
and the Attorney General of the United Stales- to be an act of terrorism; to be a violent act or an act that is dangerous to
human life, property, or infrastructure; to have resulted in damage within the United States, or outside the United States
in the case of certain air carriers or vessels or the premises of a United States mission; and to have been committed by an
individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy
or affect the conduct of the United States Government by coercion.
YOU SHOULD KNOW THAT WHERE COVERAGE IS PROVIDED BY THIS POLICY FOR LOSSES RESULTING FROM
CERTIFIED ACTS OF TERRORISM, SUCH LOSSES MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES
GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. HOWEVER, YOUR POLICY MAY
CONTAIN OTHER EXCLUSIONS WHICH MIGHTAFFECT YOUR COVERAGE, SUCH AS AN EXCLUSION FOR
NUCLEAR EVENTS. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT GENERALLY REIMBURSES
85% THROUGH 2015; 84% BEGINNING ON JANUARY 1, 2016; 83% BEGINNING ON JANUARY 1, 2017; 82°x®
BEGINNING ON JANUARY 1, 2018; 81% BEGINNING ON JANUARY 1, 2019 AND 80% BEGINNING ON JANUARY
1, 2020 OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID
BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM CHARGED FOR THIS COVERAGE
IS PROVIDED BELOW AND, DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS THAT MAY BE
COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.
YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT, AS AMENDED, CONTAINS A $100
BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS' LIABILITY FOR
LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES IN ANY
ONE CALENDAR YEAR EXCEEDS $100 BILLION. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS
EXCEED $100 BILLION, YOUR COVERAGE MAY BE REDUCED.
Acceptance or Rejection of Terrorism Insurance Coverage
I hereby elect to purchase terrorism coverage for a prospective premium of AS QUOTED
,I hereby decline to purchase terrorism coverage for certified acts of terrorism. I understand that I will
have no coverage for losses resulting from certified acts of terrorism.
PolicyholderlApplicant's Signature
Print Name
E PROPERTY A D CASLIALTY INS( IRAN F. COMPANY
Insurance Company
To be advised when nolic�LNrchased
Policy Number
0
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2015 National Association of Insurance Commissioners