Item P13 P.13'
J �� BOARD OF COUNTY COMMISSIONERS
County of Monroe r�l Mayor Heather Carruthers,District 3
Keys Mayor
The Florida � - Mayor Pro Tem Michelle Coldiron,District 2
V11 '` �ql
l €d� Craig Cates,District 1
\J? V,
David Rice,District 4
Sylvia J.Murphy,District 5
County Commission Meeting
April 15, 2020
Agenda Item Number: P.13
Agenda Item Summary #6750
BULK ITEM: Yes DEPARTMENT: Risk Management
TIME APPROXIMATE: STAFF CONTACT: Maria Slavik(305) 295-3178
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),
Hiscox Insurance Co., Westchester Insurance Company, Great Lakes and Boiler and Machinery
Insurance from Hartford Steam Boiler Ins. Co. (HSB), and for the Risk Administrator to execute all
necessary forms.
ITEM BACKGROUND: Marsh USA has proposed to renew the County's Property Insurance with
Lloyds and Landmark, Westchester, Great Lakes and Hiscox for an annual premium of$1,359,833.
Lloyds' premium will be $275,000 for 25% part of$5 Million of coverage, Hiscox premium will be
$223,000 for 25% part of$5 Million of coverage, Westchester's premium will be $487,500 for 50%
part of$5 Million coverage and Great Lakes Insurance Company premium of$300,00 (100%part of
$5M in excess of $5M). Landmark's premium will be $74,533.00 for $237M in excess of $10
Million of coverage. This represents an increase of $173,964 (14.7%) in the County's annual
premium when compared to the premium the County paid for the 2019/20 premium. The County's
Property Insurance policy and excess policy will provide of the sub-limits for the policy's Building
and Ordinance coverage of$10 million and the sub-limit for Builders Risk claims are for $5M. The
renewal provides replacement cost property insurance coverage for County buildings, contents,
communication towers and contractors equipment with a current value of $243,230,702. Coverage
for wind and flood losses is limited to $10 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
$12,186. This represents an increase of$1,438 (13.4%).
Combining Marsh's proposed premium of$275,000 for the Lloyds' (25% part of$5 Million) policy
plus Marsh's proposed premium of $223,000 for Hiscox Insurance Company (25% part of $5
Million) plus Westchester Surplus Lines Insurance Company proposed premium of $487,500 (50%
part of $5M) and Great Lakes Insurance Company premium of $300,00 (100% part of $5M in
excesss of $5M) and $74,353 for Landmark's Excess Property policy ($237M in excess of $5
Million) plus Marsh's proposed premium of $12,186 for HSB's Boiler and Machinery policy, the
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P.13'
County's total Property/Boiler and Machinery premium for the 5/1/20 to 5/1/21 policy term will be
$1,372,039.00.
PREVIOUS RELEVANT BOCC ACTION:
Staff went out for RFP on January 23, 2020, and only one proposal was received from Marsh USA,
Inc., (incumbent) and is being recommended for approval. The current policy with Marsh USA,
Inc., expires on May 1, 2020.
CONTRACT/AGREEMENT CHANGES:
Marsh USA proposed Property, Boiler and Machinery Insurance with Lloyds and Landmark,
Westchester, Great Lakes, Hiscox and Hartford Steam Boiler Ins. Co. for annual premium of
$1,359,853. This represents an increase of$173,964 (14.7%) HSB proposed Boiler and Machinery
Ins. for an annual premium of$12,186. This represents an increase of$1,438 (13.4%)
STAFF RECOMMENDATION: Approval
DOCUMENTATION:
Interisk Recommendation Letter
FINANCIAL IMPACT:
Effective Date: 5-1-2020
Expiration Date: 5-1-2021
Total Dollar Value of Contract: $1,372,039.00
Total Cost to County: $1,372,039.00
Current Year Portion: $1,215,893.00
Budgeted: Yes
Source of Funds: Internal Service Fund/Primarily Ad Valorem
CPI: NA
Indirect Costs: N/A
Estimated Ongoing Costs Not Included in above dollar amounts: N/A
Revenue Producing: No If yes, amount:
Grant: N/A
County Match: N/A
Insurance Required: Yes
Additional Details:
04/15/20 503-08502 - RISK MGMT INSURANCE $1,372,039.00
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P.13'
REVIEWED BY:
Maria Slavik Completed 03/31/2020 9:22 AM
Cynthia Hall Completed 03/31/2020 9:49 AM
Bob Shillinger Completed 03/31/2020 1:47 PM
Purchasing Completed 03/31/2020 2:05 PM
Budget and Finance Completed 03/31/2020 2:54 PM
Kathy Peters Completed 03/31/2020 2:58 PM
Board of County Commissioners Pending 04/15/2020 9:00 AM
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P.13.a
InteriskCorporation Risk Mgt.&Employee Benefits
Consultants
1101 Red Maple Circle N.E.,St. Petersburg, Florida 33703-6318 — telephone: 813-287-1040
www.interisk.net
March 25,2020
Ms.Maria Slavik,CPM
Risk Administrator
Monroe County W
i 111 1211,Street
Suite 408
Key West,Florida 33040
Subject: Property/Boiler and Machinery RFP U
Dear Maria:
0
The County's Property coverage expires on May 1,2020. In addition,the County's Boiler and Machinery
coverage also expires on May 111. The Boiler and Machinery coverage is provided through a separate
policy issued by the Hartford Steam Boiler Inspection and Insurance Company with limits of$100 million
and a per incident deductible of$5,000. Hartford Steam Boiler enjoys a favorable rating from the AM Best
Company,the leading evaluator of insurance company operations. The annual premium for the expiring �--
coverage was$10,748. It should be noted that the County's Boiler and Machinery exposure is considerably
less than the$100 million limit. It is common for Boiler and Machinery insurers to offer limits
considerably higher than the exposures. The policy is subject to a per occurrence deductible of$5,000
except for damage to Air Conditioning and Refrigerating Equipment which has a$25,000 per horsepower
(HP)deductible.The coverage is being primarily purchased to obtain State required inspections of 4
pressure vessels located at the Detention Center on Stock Island.
The Property program includes coverage for:
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➢ The County's Buildings and Contents
➢ The County's Mobile/Contractors Equipment
➢ The County's EDP Equipment An
➢ The County's Communication Towers and Equipment
➢ The County's EMAS system at KWIA
The program is segregated into 3 layers. Following displays the structure of each layer when the 2019/20 m
program was initially bound. Throughout the year properties have been added and deleted from the
Program.
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P.13.a
Layer 1 (Includes Named Storm Wind and Flood Coverage)
Insurer Limits Provided Annual Total Layer Total Layer
Premium Limits Premiums
Hiscox Ins. Co. $1,250,000 $188,000
Lloyds of London $2,500,000 $470,000 $5,000,000 $870,512
Sompo Ins. Co. $1,250,000 $212,504
Layer 2 (Includes Named Storm Wind and Flood Coverage)
Great Lakes Ins. $5,000,000 $250,004 $5,000,000 $250,004
Co.
Layer 3 (Excludes Named Storm Wind and Flood Coverage)
Landmark/RSUI 1 $233,230,702 $65,377 $233,230,702 $65,377
Total Pro ram
$243,230,702 $1,185,893
The policy is subject to the following deductibles.
Buildings and Contents $50,000 except Named Windstorm and Flood losses
EDP Equipment $50,000 except Named Windstorm and Flood losses
Contractor's Equipment $5,000 except$50,000 for Named Windstorm losses
Towers and Communication Equipment $5,000 except$50,000 for Named Windstorm losses
EMAS $50,000 except Named Windstorm and Flood losses pp
Named Wind Storm $1,000,000 per location/per occurrence
Flood 5%of the value damaged
0
All of the insurers participating in the expiring program enjoys a favorable rating from the AM Best
Company. Marsh USA serves as the County's agent/broker for the coverages. Marsh is the largest
insurance broker in the world and has the technical expertise to respond to the County's needs.
c
In accordance with the County's Purchasing protocols,a Request for Proposals(RFP) was posted on
Demand Star for the County's Property/Boiler and Machinery coverage on January 23,2020. Provisions
were made for interested proposers to submit Requests for Additional Information through February 13,
2020. An addendum to the RFP was posted on Demand Star on February 18,2020. Proposals were
publically opened on March 10,2020. 0
Marsh was the only agent/broker that submitted a proposal. Both their Property and Boiler and Machinery
proposals offered terms and conditions that are consistent with the expiring program with two exceptions.
Westchester Insurance Company replaced Sompo Insurance Company and assumed 50%of the first$5
million of coverage($2.5 million). Lloyds of London reduced their participation on the first$5 million of
coverage from 50%to 25%. Westchester enjoys a favorable rating from the AM Best Company and this
change is viewed as having little to no impact of the protection the County is purchasing. m
Marsh proposed an annual premium of$1,359,853 for the County's Property program. This represents an
increase of$173,964(14.7%). The percentage increase is consistent with that being experienced by other
clients Interisk has the pleasure of serving.
Marsh proposed an annual premium of$12,186 for the County's Boiler and Machinery program. This
represents an increase of$1,438 (13.4%). The percentage increase is consistent with that being
experienced by other clients Interisk has the pleasure of serving.
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P.13.a
On March 25,2020 an Evaluation Committee met to rank the proposals. The Committee consisted of:
➢ Ms.Maria Slavik—Monroe County
➢ Ms.Judith Clarke,P.E.—Monroe County
➢ Mr.Todd Stoughton—City of Key West
Since Marsh's proposal was the only one received by the County,the Committee unanimously
recommended to renew its Property insurance and its Boiler and Machinery coverage as proposed by
Marsh. Interisk concurs with this recommendation. It should be recognized that the County has recently
added a few new locations to the schedule of property being insured. These additions were made after the
deadline for agents to submit their Requests for Additional Information. To ensure all proposals were
based on the same underwriting information,Marsh was instructed to base their proposal on information 6
contained within the RFP with the understanding that the new locations will be added to the County's
Statement of Values prior to Marsh instructing the insurers to bind the coverage. This will result in the
premium increasing slightly. It is unknown the amount of the increase but Marsh is continuing to negotiate
better pricing with the insurers that may offset some of this increase.
Please give me a call if you have any questions or wish to discuss this issue in more detail.
Cordially,
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INTERISK CORPORATION
Sidney G.Webber
CPCU,ARM c
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