Item D37
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: February 19.2003
Division: Management Services
Item: Yes.X- No
Department: Administrative ServicesfRisk Mgmt
AGENDA ITEM WORDING: Approval to accept proposal from MARSH USA for Pollution
Liability Insurance in the amount of $62,396
ITEM BACKGROUND: RFP was issued for Pollution Insurance coverage on December 17,2002
PREVIOUS RELEVANT BOCC ACTION: Existing 5-year policy term accepted by Board expires
on 3/12/2003. This includes a one-month extension from current carrier.
CONTRACT/AGREEMENT CHANGES: Contract coverage dates are 3/12/03- 3/12/04. Retention
level raised from $25,000 to $50,000.
STAFF RECOMMENDATIONS: Approval
TOTAL COST:
$62.396
BUDGETED: Yes -L No_
COST TO COUNTY: $62.396
SOURCE OF FUNDS: primarily ad valorem
REVENUE PRODUCING: Yes
No X
AMOUNTPERMONTH_ Year
DIVISION DIRECTOR APPROVAL:
OMBlPurspasing _ Risk Management _
~dl~~ {).6;;~L/U/L-/
SHEILA BARKER
APPROVED BY: County Atty _
DOCUMENTATION:
Included X
To Follow
Not Required_
AGENDA ITEM #, /.] 7
DISPOSITION:
Revised 2/27/0 I
82/a4/1999 22:24
8132871841
INTERISK
r-14(;:t. tJ"2
I NTERISK CORPORA TION
Risk Managc:mcnl
Employee Bendits
IIII NCX1h Wesuhore Boulevard
Suite 208
Tampa. FL 33607~711
Pboa.c (813) 287-1040
FaC'Iimik (813) 217-1041
Col1lUltants
Jaouary 31, 2003
Mr. WUliam R. Grwnbaus ARM
Risk Maaagc:r
Monroe CouNy
1100 SimoD1Oll Stteet
Suite 268
Key West, Florida 33040
Subject: Evaluation afPropoals for Pollulion Liability InIUlal1Ce
Dear Bill:
In early 1998 the County eatcred into a five year Pollution LiJbiIity policy with tJaiIed c.pi1a1lD1una1c:e
Company effective February 12, 1991. In early July 2000. United CapitalItlNd rqJOrtiDs ro.cial
difficulties tbal ultimately rauItcd in U niII:d CaPtaI bc:iD& placed ill IiquidlliCIIL ~ put ollbe ~
procell. 0u.If Under'llritcrs IDsmmce ComIJuIY ~ . ... ponian of Uaiced CIpda1'I poUutioa
liability po1io:s. Momoe Coumy was OGC al the c:oUats ua1nwd by Gulf.
III December 2002. a "c.u mr Biela" Cor tbc Cowdy'1 Pollution LiaIMIiCy inIaaDcc ... .....iftd in
ICCOrdance with 1he PurcMIiIIC Dcpaltmeafs ~ The 1bllowing ~ sabmiaed
rcquesu for a copy of die daIaiJcd bid ,~ilbtioas
~ AIdIur J. 0aIJa&ha'
~ Manh USA
~ ElMronmca.tallDlurl8Clt SclMc:5 (the iDt1Imbent apnt)
~ FillaDCia1 RaIowtc ~
> TIle Gebria8 Group.
In an c:fI'ort 10 ClOl'IIOl the proa:sa; and 10 enaare all puticipmll aDd equal oppadUDity 10 IbUdUrC I
~ P''09..... the .... wcte rcquiraI to 1Ubmit. dIIbd ill ~ at prd'CI'CIa, tbac iIlIuren. lbat
W1Ulkd to 1IdIizc to develop their propoals. A tocal ot 6ftan (1 j) dUfcreal iIIIurcn wae . -'CI ~ It is
bdicYed tb8t the ~ reqUCSbld I~"-" tile ~...,.. if DOt .1, of the iDIurcrI widl till: IbiJiIy d
dcIire to provide the IypCIIDlS UIlNfttl 01. iDIuraIK:e raquired by the COUftly. o.tac _ procell. line (3)
~m& wen: lI8IeCS to aI1.,..opo.e.' ~ 10 rcqucsu for 8dditi0llll ~
Scaled propouIs were received by the County's PurcbMing D~ rhrouIh 11:00 am. J.....-y 29.
2003 at wbidl time they wen: publicly opened by me Pvc=buiD& Departmmt. Dc followiq
agculIIbrokcn submiaed propoWs:
~ A.rtJmr J. ("'..11"'.,....-
~ Marsh USA
~ FiDudalllcIowa: ~"'''r'''"''''S
O~!a~ilg9S 22:2~
3132871a~1
INTERISr<:
CQGi:: 0]
Attached are spreadsheets comparing the major fwures of each propoIIllUbmiued. 'The appropris1e
5CICllona of the spn:adabccu were rev1cwed wilh each ~ to CDlW'C tbcir propo&als wa:c
accurately~. Followtng is II namlive discu55ion of each prapoI81 with IDterlsk', recommeud.Itiona
regarding ill accepWu:e or rejection.
Fta.-d4l ~ M",~
Financial ~ ManagemenJ (FRM) propoted coverage uang American Safety Illik R.c:b:ntion Group
:u 1hc inswu, They otre:ed two iep8rlW: propcsals for the County to consider. The first option would only
provide coverage for the Cowuy'a closed landfills, closed incine::nllDr planc5 aDd iu petroleum slDragc
tanks. The aecond option would provide covc:ragc for 1111 ofthc County', locations. Both QIltiona ~
limlt5 af SS million with a per claim deductible of $2~,OOO. FR."l proposed 311 annual premium of S.7.~70
(or .ita tint ClItion IDd an aaaua1 pranium of S52,327 for its lCCOod option. FRM alto pcopoecd multi-year
options as c1isplayed 00 the auacbcd 1Chedules.
FRM' 5 proposals would only provide coverage if the conJaJIli.natiou migsated beyond the boundaries of the
County's property. This is viewed as a signi1icam weakness in their prog%UL While Americ:an Safety
appcan to operate as a tnditicnal insurance company, they arc tI:dIni<:a1ly a "Sclf lDsurcd Rcu:mion
Group" (SIRRG) orgamzed -aDder the Federal Liability Risk Retcmicm A.c:\ at 191&, As. SIRRG,
American Safely is owned and CODIIOUed by ita member insureds md mU5t rely leidy on praDiams
gcnw.tIod to ~ cJaims aa 1bey arc presc:DtCd. Aa:ordiog to the lateIt AM Bc:8 Key Rating Guide.
American Way only bas Policy Holder Surplus (Ncr: Worth) of $4.6 million wbic:h it lID( c:nouch 1'DDdI to
pay ODe policy limillom. Due to the limirabont of COYCrag'C being otfcn:d by Amcric:an Safdy aDd iIs lack
of finaru::iaJ su=gth.. it is rccommeudcd 1lw American Safety be climiD8r.c:d from COIIIicI&:rCoQ.
A.1dI", J. G-JI-~-
Ga.llagba submitted proposals from two di1'ferau insurers. The tint p-oposal ... from the Amaican
~nal Group (AlG) and the IC:Q)OIj proposal was from ACE Property ud CaIualty lDIUI'IDOC
CoD1l'*lY. Both AlG aDd ACE eDjoy a fawrab1e IItin8 from the A.M Best and Compmty, the laIdin3
cw1uaaor of i:uunm:e COID1l8DY operations. The covemICS offered by both AlG lad ACE ll'ere c:oaNrmt
with thole cu.m:ndy purchased by the Coaaty with oae DOtabIc exaption. 1be polq will DOt pnwide on-
ate cleaDup c:overagc for the CouIIIy', doled h.ndfillc The prapaul did iDc1udc ICYCraI f'IlIr-......._.
sw;b as covcrqc fOr claima arisiD& out of the ~ of WUle and coverage for daillUi oriP-tiDI
from dispoIaI .ites. SiDce Ibe Cowuy has trIDIfemd lhilliability to tile ~.) th.l tnIIIport aDd
dispoIc ol the Caunay's waste and require the COIlUal:1On to carry appropiale iDnnace, it is bdic:Yed lbIt
thae ...d,"'n~ provide miDimalldded protClCtiOll.
~ AlG proposal included 1imiIs of SS millian with per claim ~bIe optiolll of S2~,000 and $100,000.
The propoeed INUll pn:mium for the S1'.OOO deductible option was S 161,649. G-I'-st-' aIJO 91Q901Cld a
thft:c year pnmium 0($286,118 for tbis option. .
Tbc propo.s aaauaJ pn:mium for the 5100,000 option WIll SI4~,4J1j with II propoaed premium of
52-'7,>>) for. Cbree year policy.
The tama and COndiliODl of the ACE propaal 'M:rC similar to thole bcinc offered by AlG. ACE pII~
limits of $.5 miI1ioa. dJJc:ct to 3 S~.OOO dcduc;tiblc. ACE's .,.~ IIIIIUaI preaUUID was SUl6,Q31 aDd
the propo&ed pI'ClUium for a three year policy wu SI92,473.
Both the AlG _ ACE propouJ& con&ai.ned priciDg significantly bagber than quaJi.fied propoWa from ocber
a~. It is therefore recommended that both the AlG and ACE Jlf'OPOQls, as auboUued by Arthur
J Gallagher be elimi.a.l.ed from oona.idcntioa.
02/ea/1999 22:2d
913287Hl41
INTERISI<
PAGE Od
ManlI (}SA
MAM submitted several prapcllIiIlls from the lodian lWbor 1nsorance (Ampany, Indian Harbor is pat cl
the XL ~ Gtcu.p that ~ . favorable maac trom A.M. Bell and C~. ~ propou1s
for bmita of $ 1 millIoft.. $.5 million and S 10 minion Will mbmiUlld by Manit Ead1 ~ hid doclul:tiblc
options ofS25.000 IDd $~,OOO.
The tam. aDd cooditiona of the propo&als were con.siltall with thole of the policy c:um::mtIy pwcbued by
the <AwJty, cx.c:qlIl DO coverqe for OIl-tile dean up It the cIoIcd lslndAlh. aud 1bc aiJporu is pnMdcd. It
was lcama! tbat molt. if DOl insutas, ha~ discoDCinucd dean up cavcrap for IandfUlI bcc:auIc the
iJSlUI'3DCC iJIdu:stry has been forced to pay for the ~ of the land 1ba WlIS DeYU iD8eDded. It is
~ that the cxclU&ion of clean up covcrqc at the aiIporU wu prompted by the ftlCCDt iDddeat It the
Key W cst airport.
The followiq table displays the annual premiuma fot'me various optiooI pI~ by Marsh.
Alba... p~
Utait S~.ooo ~ m... Ik4KdbIe
$1 miDiaa 136.347 $29,404
~ ISliIlioa $77.127 $62,396
S 1 0 million $91.839 $79 961
It i. DOl bc1icvcd daM JimiIa of S 1 millioa ~. procccu Ihc iDIc:rI:la 01 the Couaty aDd th..~ it is
~ IbM Marsh's $1 million optiou be f!limi.-....t from ClJDIidaaIioG. B..s 011 the tavoablc
Iou oqICriC1KlC at the ComIty, it i. believed that liIIIita of $10 millioa are DIll jaItified. II is 1bcrc:!orc
rec:ommcnded that Marsh's $10 million opDoas be elituinlled from ~A-arioo.
If the CowIly ~ to ~ricDcc a IDlQ<< poIlwioa. c:JaiJII, the ultl1lllD: <lOIt at the daim awdd c:MiIy
IppI'C*h $3 miUioo. 11 is tberdore ~.-...Iowl tbII'me CoaD1y n:taiD pol1uIioG IimitI at S~ mi1liG:L 'the
prauMa uviDp MIOCiatcd with me $30,000 ~ opboa, CICIUpIcd willl tk eo..y'. flMnbk Iou
experieac:e. IUpporu die County purcbasinc tbe IJi&bcr dcdDctibIc.
The llCI'IDS. condUiollS, II3bi1ity of iJIsaM aDd tbe priciq of the IDdiaIl Huboc r...-.-. ~'.
propou1 as .,n",,", by MInh USA are superior to me 0Iber propoII1s ftlCeivod IIId it . dadonl
rooMI'~ did Moaroe C4WJty w:ceplI !.be Indian Harbor propoal willa a $5 million liIIIit IDd ·
S~.OOO dedacdblc for the 2003/2004 policy yar.
AA always. pIcue do dOt hcsitlle to call if you ~ IUI)' que5tkIna.
C<<diaIly .
1NTElUSK CORPORATION
~si1f.w-
CPCU. ARM
~
- z
~35
;:lZ;:l
~~i
~o3
o"'~
:S!f
i
j
illll1u I
~a Ji~i~~~
~';I ~ .!
Q ~.
:z ~
-
....
~ ~
..,
-
.1 :t I ]l~ 'a :s
o.i a;. J g ~
'l :a; 1....1 ~!"5 ~
'- :I f~' ~ 0.
~ Ii Jli
~
...
iii Z
~~O
_1=
<
::l Z ::l
8~~
~3~
~ c ~
Z&:L.
o
~go
N ~
_A.
g
N
"l
...
~
~
i3
:Ill
a..
;;.
5
~
lI.
o
~
z
o
~
:::E
""
..
j
I -t
h:.j}
I.! ~ 1
"l ".<1
~c e
~
~
=<
1
:: ~ e-
~ ~ ~
\~~~!-
-:::I~l!l/
~!;l>--
~ ~ 65
.. ~
~ "^ S
~ ~ 3
~ "..
Ul ji
<5
"
~.
c
:z
l"
>-
;
.~
. .. <Ir
":' 1...;.g j . g g
l.s .;s~~: 11- '" :n
'.41 .. S - ,'" '" :;z,_
I c,j~ ~."'''''
~ "
0_"1 ~:.-
--: ~'~
..
~ -se-
.. ... '3 ~
~1~ Q.
~_l! i
~; a.i
... g e
,~ J:: ~!!
'''..~a
8 '3's
:::
;'
~E
-:::I ..
~ It
" a ?:
'" .5 ..
- 2 :3
i~(3
~~
~'j
~ ":l
!iili! ,
· i l;' j .~ t
; ..j'!< ;:11"~~
~ !: ~ . ~ ~ - -
f:e::!~ -
Ii; -< ..
i..1
i II a
D2~i:5
:3 ~.~ <
J:&~J
d
]
... j
:i _
j
1~ 1 'i ~
t~~ a
~~~ i ,,:L;
~ ! l~ f-
:z i' .~ c::
~fi
~ t].
~ ~~l
roo ,J~~
<38
j~
~ ~.3 e
~ 1: a g..
.... 3-a:;
roo ;~ ~ ~
,<3 ~
...
5
::2
'; <3
~ j
; ...
c..; "3
"0
i
J
2
11 ~
~~~
.. ~ a.
~li
"'1iI
~
~
I
\ . J] g
\ ~ ~ 1 f~ 1 ~
.:a :,( : ... ~ ~ ': ....
...., .,g..r-A eo- tt . 0, ~ w
~ Co; ~ ~ - !P'i'- ':;
c .,-;1 :a - . ~:3 c '"il
z .,....,1 ~!.'.=..
-1>- :;... 't .~- .'
....d U ~~ ~ u ~ .a..
"3>-:;...;i~~~
::z"'. 1! "., do
j~~~~
,... ~ t: !!
I
I
I
I
I
I
i
I
I
\~
I
1
I
c .
: ~ "0 S ~
, a.i"; s..;
,~ ~ ~ ..r ~..a
"" 8':;;. ~:: .e E ~ "3
~ :! ~ ~~ ~ g (3 t~
~>-;a;;:<e."..eg"3
..~~ ~~!i ~ 91
::z",l~~1~!l
-:::I ~ '.Q!l =
.:1 e illS " ~
!= ,,<a :; ...
u
;;.
6roo~~
..0 -; - r-
.... 8':'~ i
o ~:;~::.=-
z ~ ~:; I I
'0 ... 'a ~
"3~~~
::: '"'" -..,
-
g...~~
"4;1.-"\ -.Q....
fi 8'2 ~. ::I
:.2 "':a--;;';'
r-~~1I
... ... ~ !
"3~>-)O
::e "'~
..
>-
" 8
;z; ~
...
;.-
.~ E
z (::
...1
~~
'"'
a:
" 7; a
;.- 11
:: !!
>-::.
j] ~d1
'l::: ~ .. 1: ~
..., .. .a .. ~
~":' .2~",
... ~ - :i "1 .,,-
::'i-~~ ~c;:
~ ...i>I. .... a....
~ , .~ .. '"! ~
:: ;,: ,a "';iCi
.., 1I
j 1I ] I
~ ] .;1 ~." ~ 5
~~ j !1t~
~' i \ 1-
~ z I
~H 5-
~~~ !I
~ f ~ ~!
~ii z
......ca.. 0
~ i
~
~~ ~l~
~j~] r:;~
HiI Uti~ ~
~f! ;J\it~
. % l 81 j .9
~
..:"
J ~<
g:j ~;;
i of J ~ J f~ Eo i :
~ li~~j ,I ~ ~ 1Jo
00;>'"" ~~ -
8 oJ!
th ~ll!ll!
r~i. ~l<I~JJ
~~ ~ .8
~ Xl s... t
.1 ~ 1l.ri.i':l
d'~.! ~ ~ 1-1 i
~ ~ ~ ~ 1 i 4t Il~
~u~"'!ds~1
:I)ill~\ll-"3;
:2"'CIotjdl ll1".
~!J' SiB
'la. i ~I ~ ~
:II :l s:. o.~ I e.
~ 1- ~;ltl~
~ =i"~:;
If: ...02"i~
8~
... ...
'" r~ ~ : :0
00
...... 0 '"
52 8]'.. >- :z '"
....
~ ...
~::o
8g
~ ~ l5
~~
~ i ~ t] :s ~
0
:I 7- ~
- Z ~ ~ a. ...
~3~ 5 ~1
~~ ~ <5
85> si 't; 1 ~ 1 ~ ,I ! ~ ~
CIl:1~ ~ 1.
11 J s S .. '5 ...
. i""
~f~ ~ . ~......18." I: ..~ i..=.lJI.
J ....I~~J1]lii> fJ -l- -';1"" ~
~~. ,,;:r .. .., ....~ s -
::sii ~ >.... ~.D J:. Jlf~l~'"
a
_a.. ~
~ i :1 j
::;:
c n ]l~~HJ
;;
Md ~1j),
~~ ~ .1
.._-.......-..~ .........- -.--.....",...,