Item C09BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: April 17.2013 Division: Employee Services
Bulk Item: Yes X No _ Department: Risk Management
Staff Contact Person: Maria L. Slavik x3178
AGENDA ITEM WORDING: Approval to accept proposal from Marsh USA for Property Insurance
package through Lexington Insurance Company and Landmark American Insurance Company at an
annual premium of $827,493.
ITEM BACKGROUND: Provides replacement cost property insurance coverage for county
buildings, contents, communication towers and contractors equipment.
PREVIOUS REVELANT BOCC ACTION: This policy was last bid in January, 2011, and
approved by the BOCC on April 20, 2011. The first renewal was approved by the BOCC on April 18, 2012.
CONTRACT/AGREEMENT CHANGES: Marsh proposed an annual premium of $827,493
which is an increase of $92,468 (12.6%) .
STAFF RECOMMENDATIONS Approval to renew the policy as submitted by Marsh Insurance
Company for the period of 5/1/13—5/1/14.
TOTAL COST: JM,493 INDIRECT COST: BUDGETED: Yes __X_No
DIFFERENTIAL OF LOCAL PREFERENCE:
COST TO COUNTY: IRZZ,493 SOURCE OF FUNDS: Internal Service Fund
Primarily Ad Valorem
REVENUE PRODUCING: Yes No X AMOUNT PER MONTH Year
APPROVED BY: County Atty_p OMB/Purchasing Risk Management
DOCUMENTATION: Included X Not Required
DISPOSITION: AGENDA ITEM #
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CONTRACT SUMMARY
Contract with: Marsh USA, Inc.
Contract #
Effective Date:
5/1/13
Expiration Date:
5/1/14
Contract Purpose/Description:
Property Insurance Policy Renewal
Contract Manager: Maria Slavik
3178
Employee Services #1
(Name)
(Ext.)
(Department/Stop #)
for BOCC meeting on 4-17-13
Agenda Deadline: 4/2/13
CONTRACT COSTS
Total Dollar Value of Contract: $ $827,493 Current Year Portion: $
Budgeted? YesN No ❑ Account Codes: 503-08502-530-450-
Grant: $
County Match: $
ADDITIONAL COSTS
Estimated Ongoing Costs: $ /yr For:
(Not included in dollar value above) (eQ_ maintenance 1ltilitiPC ia1nitnria1
CONTRACT REVIEW
735,025
Changes
Date Out
Division Director
Date In
Needed R viewer
Yes❑ No
Risk Management
Yes❑ NoRf
O.M.B./Purc,'}asing
`� Z-13
Yes❑ No®
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County Attorney
Yes[] No[f
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Comments:
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I NTERISK CORPORATION
Consultants
Risk Management
Employee Benefits
March 27, 2013
Ms. Maria Slavik, CPM
Risk Administrator
Monroe County
1100 Simonton St.
Suite 268
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 Insurance expires on May 1, 2013. The expiring program is provided by
Lexington Insurance Company and Landmark American Insurance Company. Both Lexington 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 $735,025 for this coverage.
Marsh USA (the County's insurance agent) has proposed to renew the County's Property Insurance with
Lexington and Landmark for an annual premium of $827,493. This represents an increase of $92,468
(12.6%) in the County's annual premium.
The following table compares the major features of the proposed renewal program to those of the program
that is about to expire.
Expiring Program
Renewal Program
Total Insurable Limit
$209,118,812
$215,076,376
Overall Policy Limits
$209,118,812
$215,076,376
Major Sub -Limits
Named Windstorm
$5,000,000
$5,000,000
Flood
$5,000,000
$5,000,000
Boiler and Machinery
$5,000,000
$5,000,000
Building and Ordinance
$10,000,000
$10,000,000
Builders Risk
$2,500,000
$2,500,000
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% 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
Boiler and Machinery Losses
$5,000 each Loss
$5,000 each Loss
Contractors Equipment
$5,000 except $50,000 for Named
$5,000 except $50,000 for Named
Windstorm
Windstorm
Communication Towers
$5,000 except $50,000 for Named
$5,000 except $50,000 for Named
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
Essentially Lexington and Landmark has offered to renew the County's program with the same terms and
conditions of the expiring program.
Through out the entire renewal process you and I have met with Marsh several times to ensure the most
comprehensive and cost effective renewal proposal can be obtained. From the beginning Marsh has
indicated that the County should anticipate a premium increase. They cited Hurricane Sandy as the primary
reason for the increase. Marsh was instructed to submit the County's program to as many different insurers
as possible to ensure the best options can be achieved. Marsh submitted the County's account to 45
different insurers, all of which enjoy a favorable rating from the A.M. Best Company. Most of the insurers
declined to provide a proposal citing the location of Monroe County and the favorable pricing being offered
by Lexington and Landmark as a reason for not submitting a proposal. The few insurers that did indicate
an interest in proposing on the County's program were not willing to offer some of the important
coverages, such as Wind and Flood, for accounts located in southern Florida. It is therefore believed that
Marsh did a reasonable market search of the insurance market place during the renewal process.
It is therefore believed that Lexington's and Landmark's proposal as submitted by Marsh USA for Monroe
County's 2013/14 Property Insurance program is consistent with what is currently available from the
insurance market place. It is therefore recommended that Monroe County renew its Property Insurance
with Lexington Insurance Company and Landmark American Insurance Company for its 2013/14 policy
year as being proposed by Marsh USA.
Please give me a call if you have any questions or wish to discuss this issue in more detail.
Cordially,
1NTERISK CORPORATION
Sidney G. Webber
CPCU, ARM
CC: Teresa Aguiar