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Item C11 BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: Jul v 18 & 19, 2001 Division: Management Services Bulk Item: Yes X No Department: Administrative Services/Risk Mgmt. AGENDA ITEM WORDING: Approval to renew Airport Liability for policy year July 27, 01 - 02, and to pay renewal premium of $49,054.00. ITEM BACKGROUND: The County purchases Airport Liability Insurance to cover liability exposures as owner/operator of the Key West International and Marathon Airports. This policy was bid in 2000 with A.J. Gallagher & Co.'s proposal being selected. This is the first year renewal. An approximate rate increase of 10.5% over the currrent premium. PREVIOUS REVELANT BOCC ACTION: Awarded bid to A.J. Gallagher & Co. in June 2000. CONTRACT/AGREEMENT CHANGES: None ST AFF RECOMMENDATIONS: Approval TOTAL COST: $ 49,054.00 BUDGETED: Yes X No COST TO COUNTY: 549,054.00 REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year APPROVED BY: County Atty _ OMB/Purchasing _ Risk Management r,~ ,GC. ' DIVISION DIRECTOR APPROVAL:jb- ~~.~OA-> (TYPE NAME HEltE) James L. Roberts DOCUMENT A TION: Included ~ To Follow Not Required AGENDA ITEM # /..~~/ DISPOSITION: Revised 2/27/01 e6/21/zee1 1e:e9 8132871 e41 INTERISK PAGE IU I NTERISK CORPORA IION Consultants 1111 NOIdl Wauborc Boulewrd Suite 208 Tampa, PI. 33607-4711 PboDe (813) 287-1040 FlICIIimi1e (813) 287.1041 Risk Mmagement Employee Beocfus June 21, 2001 Mr. Wayne Robertson Risk Manager Monroe County S 100 College Road, R.oom 205 .Key West, Florida 33040 Re.' Airport Lillbi/ity Retlewal Dear Wayne: Arthur J. Gallagher's renewal proposal for the County's Airport Liability iasurance has been received and reviewed. The proposal indicatesl that the coverascs will CODlinu.e to be provided by Old Republic and Uoyds ofLoodon. Bodt ol'Bflli72hons enjoy a favorable rarias &om A.M. Best and Company, the leading evaluator ofi~ company operations. Since this will be a renewal of the cmrent progtam, the terms and COnditiODl of the current policy will remain the same. Currently Old Republic provides the first $5 million of prococOOIl with UOyds providing additional limits of $95 million. GaUagber bas Wd;eatod tbat Old Republic may increase their portion of coverage, which will resuk in Uoyds decn:aaiDg theirs. ID either C'YCnl the total limits will remain at SI00 million. It is not believed that this will eft'cct the level of protection the County is purchasing. The premium for the 200112002 will inc:reue from $44,370 to $49,054. A portion of this increase is a n:su1t of the number of passengers increasing by nearly 4".. The balance of the jncrease is a result of the industry chargjng higher insurance costs. (MnU iD&unuK:c costs am increasing between 20% and 30% for _ upcoming year. 1'bI: Coumy's increase is approximately 10.5%. This suggests that the renewal pricing is competitive aad it is recommended that the County renew its AiJpon Liability iDsuraDce with Old Republic and Lloyds as proposed by Arthur J. Gallagher. As always, jfyou have any questions, please dQ not hesitate to call Cordially, lNTERISK CORPORATION ~4fJ Sidney G. Webber CPCU, ARM Arthur J. Gallagher & Co. - Boca Raton June 18, 2001 Mr. A. Wayne Robertson Risk Manager Monroe County Board of County Commissioners 5100 College Road Key West, FL 33040 Re: Renewal of Airport Liability Policy Anniversary Date: July 27, 2001 Dear Wayne: Pursuant to our telephone conversation today, enclosed is the renewal proposal for your review. We will also provide a copy of this proposal to your insurance consultant, Sid Webber. As we discussed, the premium was increased 10.5%, from $44,370 to $49,054. A portion of this increase is attributed to the 3% rise in the number of passenger enplanements: from 560,000 to 579,192. The remainder is due to a general increase in insurance costs and is not specific to Monroe County, rather to the industry as a whole. Overall, this account has had favorable loss experience and the underwriters worked with us to keep the increase to a minimum. Please advise if we are able to bind the renewal coverage. Upon receiving your authorization to bind coverage, we will forward your confirmation along with an invoice for the renewal. We will also need a renewal certificate for the Conch Lounge policy in September evidencing Liquor Liability so that we can forward to the underwriters for the 2001-2002 term. On behalf of Arthur J. Gallagher & Co., Heidi and I thank you for the opportunity to be of service! Best regards, Susan Ainsztein Account Executive HLG/1 0311 2255 Glades Road, Suite #400[, Boca Raton, Fl33431 561.995.6706 phone 561.995.6708 fax AIRPORT LIABILITY INSURANCE PROPOSAL PREPARED FOR MONROE COUNTY BOCC JULY 27, 2001 TO JULY 27, 2002 - MAY 21,2001 SUBMITTED BY: CHUCK LOMBARDI DOUG MEYER, ARM ARTHURJ. GALLAGHER &CO. 7900 E. UNION AVENUE, SUITE 200 DENVER, CO 80237 800-333-3231 SUSAN AINSZTEIN, ARM HEIDI L. GREENE, C1C ARTHUR J. GALLAGHER & CO. ONE BOCA PLACE 2255 GLADES ROAD, SUITE 400E BOCA RATON, FL 33431 561-995-6708 Meeting your needs. . . . . .Exceeding your expectations C:\TEMP\2001 phoenix airport proposal.doc MONROE COUNTY DOCC ,"","""",,-' GENERAL CONDITIONS ./ The contents of this proposal reflect a general outline of coverages recommended by Arthur j. Gallagher & Co. - Denver. ./ All coverages, however, are subject to the terms and conditions, exclusions, limitations stipulated by the policy(ies) forms themselves. Note, not all exclusions are shown. It will be necessary to refer to the policy forms for a full listing of exclusions. ./ In addition the only coverages that will be implemented are those coverages specifically requested by you, the insured. ./ This proposal is reflective of the exposures (values, payrolls, receipts, operations, locations, etc.) supplied by the Insured. NOTE: It should be emphasized that the description of coverage enclosed is a summary only. The coverage is subject to terms and conditions outlined and certain restrictions, limitations and exclusions contained in the policies of insurance. The description is not a policy of insurance. In the event of any conflict between the enclosed description of coverage and the policy of insurance, the provisions contained in the policy of insurance will govern. DISCLAIMERS ./ In addition to the fees and/or commissions retained by Arthur j. Gallagher & Co. - Denver, it is understood and agreed that other parties, such as excess and surplus line brokers, wholesalers, reinsurance intermediaries, underwriting managers and similar parties, some of which may be owned in whole or in part by Gallagher's corporate parent, may earn and retain usual and customary commissions and/or fees in the course of providing insurance products. Any such fees and/or commissions will be the responsibility of the Insured and not Arthur j. Gallagher & Co. - Denver. ./ Gallagher and certain of its insurance carrier markets from time to time enter into arrangements providing for additional compensation to be paid to Gallagher by such carrier generally with respect to the volume of premium or insurance coverages written through Gallagher with such carrier. ./ The information contained in this proposal is based on the historical loss experience and exposures that were provided to Arthur j. Gallagher & Co. This proposal is not an actuarial study. Should you wish to have this proposal reviewed by an independent actuary, we will be pleased to provide you with a listing of actuaries for your use. C:\TEMP\2001 phoeniX a "port proposal.doc Page 1 MONROE COUNTY DaCC THE PRIMARY CARRIER .:. A.M Best's Rating .:. OLD REPUBLIC INSURANCE COMPANY (PRIMARY LIMITS) AS OF JUNE 18, 2001 Policy Holder Rating A+ Excellent Financial Category x FORM PAM-PR-201/ PR-203 (06/95) CERTAIN UNDERWRITERS AT LLOYDS OF LONDON - B.A.I.G (EXCESS LIMITS) AS OF JUNE 18 2001 Policy Holder Rating A Financial Category xv FORM LLD 03/25/97 Sum Insured LLOYDS OF LONDON (B.A.I.G. - BRITISH AVIATION INSURANCE GROUP)) TO pay the difference between the limits of the underlying policy being: Bodily Injury Property Damage and Personal/Advertising Injury Liability combined $20,000,000 each occurrence/offense and in the aggregate with respect to Products Completed Operations, Personal/Advertising Injury and Incidental Medical Malpractice. Excess Auto Liability (off-premises) limited to $20,000,000 anyone occurrence excess of $5,000,000 anyone accident / occurrence. AND the following TOTAL LIMITS Bodily Injury Property Damage and Personal/Advertising Injury Liability combined $100,000,000 each occurrence/offense and in the aggregate with respect to Products Completed Operations. Within the above limit, payments for Personal/Advertising Injury and Incidental Medical Malpractice separately shall not exceed $25,000,000 in the aggregate. Within the above limits Excess Auto Liability (off-premises) is limited to $25,000,000 excess of $5,000,000 anyone occurrence / accident. C:\ TEMP\200 1 phoenix '''port propos.l.doc Page 2 MONROE COUNTY BaCC NAMED INSURED MONROE COUNTY BOARD OF COUNTY COMMISSIONERS 5100 COLLEGE ROAD WEST KEY WEST, FL 33040 LOCATIONS Key West International Airport Key West, Fl AND Marathon Airport Marathon, Fl NOTE: Any entity not named as an insured is not covered under this policy. This includes Partnerships and Joint Ventures. C:\TEMP\2001 phoeniX airpM proposal.doc Page 3 MONROE COUNTY BOCC AIRPORT GENERAL LIABILITY liMITS BODILY INJURy/PROPERTY DAMAGE $ 100,000,000 Each Occurrence, Combined Single Limit 1 INDEPENDENT CONTRACTORS Included LIABILITY CONTRACTUAL LIABILITY Included PRODUCTS/COMPLETED OPERATIONS $ 100,000,000 Each Occurrence and in the Aggregate HANGARKEEPERS LEGAL LIABILITY $ 100,000,000 Any One Aircraft $ 100,000,000 Any One Occurrence NON-OWNED AIRCRAFT LIABILITY $ 100,000,000 Each Occurrence ON-PREMISES AUTO LIABILITY Included Each Occurrence PERSONAL &ADVERTISING INJURY $ 25,000,000 Per Occurrence and in the Aggregate. INCIDENTAL MEDICAL MALPRACTICE $ 25,000,000 Each Occurrence and in the Aggregate EXCESS OFF-PREMISES AUTO LIABILITY $ 25,000,000 Each Occurrence excess of $5,000,000 primary limit FIRE LEGAL LIABILITY $ 100,000 Any One Occurrence MEDICAL EXPENSE $ 25,000 Any One Person $ 100,000 Any One Occurrence DEDUCTIBLES Each and every loss, claim and/or expense $ NIL Bodily Injury, Property Damage and Hangar- Keepers Legal Liability ANNUAL PREMIUM $ 49,054 $31,554 Primary $17,500 Excess 1 $100,000,000 is the most the policy will pay in anyone occurrence regardless of the number of claims or coverage involved and is subject to lower sub-limits and aggregates as indicated C:\TEMP\2001 phoenix airpon proposal.doc Page 4 MONROE COUNTY BOCC .,,,,,.., DESCRIPTION OF AIRPORT COVERAGE NAMED INSURED - (BROAD FORM) Includes elective or appointive officers of any board, commission or agency and employees and volunteers of yours but only with respect to liability arising out of activities of the Airport. PREMISES LIABILITY (INCLUDING WAR RISK) Bodily Injury, including Mental Anguish and Property Damage. The ownership, maintenance or use of the Airports and all operations necessary thereto, but excluding the direct operation of a Control tower, including the ways and means immediately adjoining thereto, and including other incidental premises used by the Named Insured in connection with the business of the Named Insured. EXTENDED BODilY INJURY COVERAGE Includes coverage for fright or mental anguish. Also protects insureds that injure others, through the use of reasonable force, for the purpose of protecting persons or property. BROAD FORM PROPERTY DAMAGE Damage to property in your care custody and control exclusion does not apply to: + Baggage or cargo handled by you, provided you are not handling the baggage or cargo as bailee for hire. + To an "auto" while on the airport. + To an "auto" or "mobile equipment" when your control is solely traffic control. NON-OWNED AIRCRAFT LIABILITY Coverage for Bodily Injury and Property Damage, (including Passengers) arising from the operation of non-owned aircraft in connection with Airport Operations. Coverage is limited to fixed wing or rotor wing with no more than 20 total seats and a gross weight not in excess of 12,500 Ibs. C\TEMP\2001 phoenix airport proposal.doc Page 5 MONROE COUNTY BOCC DESCRIPTION OF AIRPORT COVERAGE INDEPENDENT CONTRACTORS LIABILITY Expands definition of your work to include work or operations performed by you or on your behalf and materials, parts or equipment furnished in connection with such operations. CONTRACTUAL LIABILITY Expands definition of insured contract to include that part of any other contract or agreement pertaining to your business under which you assume the tort liability of another party to pay for bodily injury or property damage to a third person or organization. 1. Excludes construction within 50 feet of any railroad property 2. Any contract that indemnifies or relates to rendering or failure to render professional services by an architect, engineer or surveyor 3. Any contract that indemnifies any person or organization for damage by fire to premises rented or loaned to you. PRODUCTS AND COMPLETED OPERATIONS LIABILITY Written on an occurrence basis and subject to annual aggregate. GROUND HANGARKEEPERS LEGAL LIABILITY Provides coverage for Aircraft while not in flight and in the care, custody or control of the Insured whether the liability arises out of a direct or indirect bailment. C:\TEMP\2001 phoenix airport proposal.doc Page 6 MONROE COUNTY DaCC DESCRIPTION OF AIRPORT COVERAGE PERSONAL INJURY LIABILITY AND ADVERTISING LIABILITY 1 Coverage for the following offenses committed during the policy period and arising out of the operations of the Named Insured: Mistaken arrest, detention or imprisonment; malicious prosecution; wrongful eviction from, wrongful entry to or invasion of the right of private occupancy; oral or written publication that slanders or libels; unintentional discrimination; misdirection of a passenger to the wrong aircraft, automobile or other connecting transportation. INCIDENTAL MALPRACTICE Malpractice, error or mistake by any physician, surgeon, nurse, medical technician or other person performing medical services on behalf of an insured in the provision of emergency medical relief. HOST LIQUOR LIABILITY Provides coverage for Bodily Injury and Property Damage arising out of the giving or serving of alcoholic beverages at functions incidental to the Named Insured's business, provided the Named Insured is not engaged in the business, manufacturing, distributing, selling, serving or furnishing of alcoholic beverages. ON PREMISES OWNED AUTOMOBILE LIABILITY Provides excess liability coverage for vehicles while on the Airport premises. Expands coverage by changing automobile exclusion to include "an auto or watercraft while on the airport and an auto or watercraft while not on the airport if responding to an aviation emergency". If other insurance is available, this coverage shall be excess over valid and collectable insurance. The definition of "automobile" is any land motor vehicle, trailer, or semi-trailer designed for travel on public roads including attached machinery or equipment but does not include mobile equipment. C:\TEMP\2001 phoeniX airport proposal.doc 1 The Limit for coverages is part of and not in addition to the Limit provided for other coverages. Page 7 MONROE COUNTY BaCC DESCRIPTION OF AIRPORT COVERAGE OFF PREMISES AUTOMOBILE EXCESS liABILITY Provides excess liability for vehicles assigned to the Airport while being operated off the Insured premises. Policy provides the difference between primary automobile liability of $5,000,000 each occurrence and $25,000,000 each occurrence. In the event the insured covers vehicles under Self Insured Retention, we can structure coverage with a deductible each occurrence. CONTINGENT CONTROL TOWER liABILITY Excludes the direct operation of a control tower by the Insured however this coverage protects against this contingent exposure should a lawsuit arise implicating the Airport. FIRE lEGALLJABllITY Property damage caused by fire to structures and fixtures that are rented or leased by the Named Insured. C:\TEMP\2001 phoenix airport proposal.doc Page 8 MONROE COUNTY BaCC ...". DESCRIPTION OF AIRPORT COVERAGE SPECIAL PROVISIONS + 90 day Notice of Cancellation (10 days for non-payment of premium) + Inadvertent Error or Omission to report claim does not void coverage. + Fellow Employee Exclusion is deleted + Three-year policy + Airport Liability Program Profit Commission - If there is a profit, "Gross Earned Premium" less "Losses" including loss adjustment and legal expenses, 10% thereof will be returned to the insured. The calculation will be made three years and 90 days after the effective date of each pol icy period. + Employment Related Practices + Pollution and Asbestos + Contamination and Noise + Electronic Date Recognition + Electrical Interference + Interference with Use of Property + Air-meets contests and exhibitions (except static display of aircraft) + Grandstands, bleachers and observation platforms (unless part of a permanent structure on the airport) + Automobiles & Watercraft (unless provided) + Owned Aircraft MAJOR EXCLUSIONS NOTE: Not all exclusions are shown. It will be necessary to refer to the actual policy for coverage, conditions, provisions and limitations. C:\TEMP\2001 phoenix airport proposal.doc Page 9 Ol!~Y ~o~~~E (305) 294-4641 Monroe County Risk Management 5100 College Road Key West, FL 33040 (305) 292-4542 Voice (305) 295-4364 Fax ("- ..--- BOARD OF COUNTY COMMISSIOERS MAYOR, George Nugent District 2 Mayor Pro tern ,Nora Williams, District 4 Dixie Spehar, District I Charles "Sonny" McCoy, District 3 Murray E. Nelson, District 5 MEMORANDUM James L. Roberts County Administrator ~ Sheila Barker f/? Director of ~istrative Services To: Thru: From: Wayne Robertsol) :\ ~ l Risk Manager l;'V Date: 06/25/0 I RE: Airports' Liability Renewal I am pleased to concur with Sid Webber's recommendation to renew our airport liability coverage with AJ. Gallagher & Co. for the coming year. The Board of County Commissioners awarded this bid on 06/14/00. This will be the first renewal. The premium has only gone up by 10.5%, for a new total of $4?,054.00. This increase is partially due to an additional 4% in customer traffic. The other 6.5% is due to rate increases in the market throughout the industry. This is a nominal increase as compared to a 20- 25% being seen in this market. This policy remains the same in terms and conditions as the expiring one. Please advise. Thank you.