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Item C15 BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: November 30. 2004 Division: Management Services Bulk Item: Yes ----X- No Department: Administrative ServiceslRiskManagement AGENDA ITEM WORDING: Approval to accept renewal with Arthur J. Gallagher to provide Airport Errors & Omisssions Insurance at an annual premium of$19,789. ITEM BACKGROUND: Present policy expires 12/20/04. Provides coverage of$2 million per claim/$2 million aggregate. Deductible is $100,00. Policy period will be 12/20/04-12/20/05. Cost is $19,789. PREVIOUS REVELANT BOCC ACTION: Approved current policy expiring on 12/20/2004. CONTRACT/AGREEMENT CHANGES: The new renewal dates are 12/20/04-12120/05. This is an increase of 17%. STAFF RECOMMENDATIONS: Approval. TOTAL COST: $19.789 BUDGETED: Yes ---1L No COST TO COUNTY: $19.789 SOURCE OF FUNDS: AD VALORUM REVENUE PRODUCING: Yes No -X AMOUNT PER MONTH_ Year APPROVED BY: County Arty _ OMB/Purchasing _ Risk Management _ DIVISION DIRECTOR APPROVAL: ~#ud~ a ~/~~~ SHEILA A. BARKER DOCUMENTA nON: Included -X- To Follow Not Required _ DISPosmON: AGENDA ITEM # C 15 Revised 2/27/01 MONROE COUNTY BOARD OF COUNTY COMMISSIONERS AIRPORT PUBLIC OFFICIALS LIABILITY INCLUDING EMPLOYMENT PRACTICES LIABILTIY DECEMBER 20, 2004 - DECEMBER 20, 2005 Submitted Bv: JORI L. VAN DER VOORT, ARM Area Vice President jorC v~der _ voort@ajg.com KATHY HILL, CIC Account Manager kathy _ hill@ajg.com Arthur J. Gallagher & Co. 2255 Glades Road, Suite 400E Boca Raton, FL 33431 Telephone: (561) 995-6706 Fax: (561) 995-6708 ajg.com Date PreDared: November 30~ 2004 MONROE COUNTY BOARD OF COUNTY COMMISSIONERS TRANSMITTAL LETTER Sent Via Emait November 30, 2004 Ms Maria Slavik Monroe County Board of Commissioners 1100 Simonton Street Key West, FL 33040 RE: Airport Public Officials Liability - Renewal Policy Term: 12/20/04 12/20/05 On behalf of Arthur J. Gallagher & Co. and the Account Service Team, we are pleased to provide our proposal for the December 20, 2004 - December 20, 2005 policy term. This proposal includes the renewal terms negotiated by Arthur J. Gallagher & Co. (Florida) - Boca Raton for the following coverage's: · Airport Public Officials Liability including Employment Practices Liability Provides coverage for sums that the insured becomes legally obligated to pay as damages resulting from claims, to which this insurance applies, against the insured by reason of public officials wrongful acts or employment practices wrongful acts, (as defined by the policy), rendered in discharging duties on behalf of the public entity named in the declarations. We have submitted your applications to the incumbent carrier, United National Insurance Company, and ACE/Illinois Union Insurance Company. United National did not provide us with a renewal quote. However, ACE/Illinois Union Insurance Company has provided us with a timely quote with a competitive price and terms. Just this morning, we received a premium indication from Arch Specialty Insurance Company of $19,789, excluding the TRIA. However, in an effort to meet your time frame for the renewal proposal, we are unable to prepare an adequate comparison, as Arch did not provide us with the Specimen policy and full terms and conditions. Should you be interested in this quote, please let us know and we will further evaluate this option. After you have had the opportunity to review the ACE/Illinois Union proposal, please contact us to discuss any questions that you may have, or to provide further clarification of any coverage areas. C:\TEMP\Boca public officials liability proposal 1204 rev.doc MONROE COUNTY BOARD OF COUNTY COMMISSIONERS TABLE OF CONTENTS Descriotion Section Transmittal Letter/Executive Summary .......................... .............. ............. ......... ............... 1 Airport Public Officials Liability ProposaI........................................................................ 2 Signatures Required....... ....................................... .... ..................................... .... ............... 3 -Authorization to Bind Appendix.... .................. ................. ........... ........ ...................................... ................. ......... 4 -ACE/Illinois Union Insurance Company Specimen Policy and Endorsements -Policyholder Disclosure notice of Terrorism Insurance Coverage - option to purchase C:\TEMP\Boca public officials liability proposal 1204 rev,doc MONROE COUNTY BOARD OF COUNTY COMMISSIONERS Public Officials Liability Insurance Proposal Prepared for Monroe County BOCC Airport Authority Commission DECEMBER 20, 2004 - DECEMBER 20, 2005 NOVEMBER 30, 2004 SUBMITIED BY: CHUCK LOMBARDI, VP AVIATION DOUG MEYER, SR. ACCOUNT MANAGER ARlHUR J. GALLAGHER &Co. 6399 S. FIDDLERS GREEN CIRCLE, SUITE 200 GREENWOOD VILLAGE, CO 80 III 800-333-3231 JORIVANDER VooRT, AREA VICE PRESIDENT KATIIY HILL, ACCOUNT MANAGER ARlHURJ. 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\Boca public officials liability proposal 1204 rev.doc MONROE COUNTY BOCC '.. "'Y'" "" ".. . Confidentiality Statement We consider as confidential any information presented by Arthur 1. Gallagher & Co. in our proposal, as well as subsequent verbal and written communications between our organizations, to be confidential. We ask that other brokers not have access to our material and that information presented in this proposal be shared only with those who have a need to know within your company. We make our commitment to you that information already received from you, and additional to follow, will be treated with the same high level of respect and confidentiality. ATTENTION This proposal of coverage is intended to facilitate your understanding of the insurance program we have arranged on your bebalf. It is not intended to replace or supersede your insurance policies. MONROE COUNTY BOCC ,....__.,. '____n' . Table of Contents INSURANCE COMPANY DESCRIPTION OF PuBLIC OFFICIALS LIABILITY COVERAGE TERMS AND CONDITIONS PREMIUM SUMMARY IMPORT ANT DISCLOSURES MONROE COUNTY BOARD OF COUNTY COMMISSIONERS TRANSMITTAL LETTER (Continued) We appreciate your trust in our service. We value your business and are happy to have Monroe County as a client. Sincerely, Jori L. Van der Voort Jon L. Vander V oort, ARM Kathy Hill Kathy Hill, CIC C:\TEMP\Boca public officials liability proposal 1204 rev.doc MONROE COUNTY BaCC "", "" . The Primary Carrier .. A.M. Best's Rating .. ACE/ILLINOIS UNION INSURANCE CoMPANY Policy Holder Rating A Excellent Financial Category xv MONROE COUNTY BOCC " '.., q' . . ". Guide to A.M. Best's Ratings Best's Insurance Reports, published annually by AM. Best Company, Inc., presents comprehensive reports on the financial position, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to do business in the United States are assigned a Best's Rating which attempts to measure the comparative position of the company or association against industry averages. Best's ratings are based on analysis, which give consideration to a number of factors of varying importance. While the analysis is believed to be reliable, we cannot guarantee the accuracy of the rating or the financial stability of the insurance company. A copy of the Best's Insurance Report on the insurance companies is available for your review. BEST'S RATING CLASSIFICATIONS A++ to A+ A to A- B++ to B+ Su erior Excellent V Good BtoB- c++ to C+ C to C- Fair Mar . nal Weak BEST'S FINANCIAL CLASSIFICATIONS I SO to SI,OOO,OOO II SI,OOO,OOO to $2,000,000 ill S2,000,000 to S5,000,000 IV $5,000,000 to SI0,000,000 V SI0,000,000 to S25,000,000 VI S25,000,000 to $50,000,000 vn S50,000,000 to SI00,000,000 vm SI00,000,000 to $250,000,000 IX S250,000,000 to S500,000,000 X S500,000,000 to S750,000,000 XI $750,000,000 to $1,000,000,000 XU $1,000000,000 to SI,250,000,000 xm $1,250,000,000 to SI,500,000,000 XIV SI,500,000,000 to $2,000,000,000 XV $2,000,000,000 to or more Note: At your option, you may wish to consult with other available rating services. Arthur J. Gallagher & Co. uses A.M. Best & Co. 's rating services to evaluate the financial condition of insurers whose policies we propose to deliver. The rating of the carrier and the year of publication of that rating are indicated Arthur J. Gallagher & Co. makes no representations and warranties concerning the solvency of any carrier, nor does it make any representation or warranty concerning the rating of the carrier that may change. MONROE COUNTY BaCC . Named Insured Monroe County Board of County Commissioners Airport Department 11 Simonton Street KEY WEST, FL 33040 NOTE: Any entity not named as an insured is not covered under this policy. This includes Partnerships and Joint Ventures. MONROE COUNTY BOCC '.,"',~ '" '.,," --' '"".'.. - Public Omcials Liability Limit of LiabilitvlLoss Limit 1 iiiiIi $ 2,000,000 Each Public Officials Claim ~ $ 2,000,000 Each Employment Practices Claim .ii $ 2,000,000 Annual Aggregate RETENTION ~$ 100,000 Each Claim including Loss Adjustment Expenses TERMs/CONDITIONS Iiiii Please refer to the attached specimen copy of the policy. Iiiii Coverage retro-Active Date - 12/20/2000 Iiiiii Claims-Made Form .;, Limit of liability includes defense costs and loss adjustment expenses Iiiii Confirmation that General Uability Coverage will remain in force for the duration of the policy. Iiiiii Employment Practice Liability included Iiiii Extended Reporting Period Provision · Automatic Discovery Period - 60 Days · Optional Discovery Period - Up to 1 year subject to underwriting and additional premium of 100% of the expiring premium to be paid within 30 days of policy expiration. 1 Including Loss Adjustment Expenses MONROE COU "".. ...., MONROE COUNTY BOCC ..""'.,,, ""."c",.. __.., ,..'.' , '."'" EXCLUSIONS Public Officials Liability NOTE: No1 actual policy for PLEASE REFER TO THE ATTACHED SPECIME POLICY FOR A COMPLETE LIST OF EXCLUSIC ~ Prior I Pending Litigation: Prior to 1212012000. ~ Alleging, based upon, arising out of or attributa dishonest or criminal acts ~ Seeking relief or redress in any form other thar damages, or claim expenses for a claim seekir monetary relief. The insurer will however provi maximum defense costs for a claim seeking nc ~ Willful violation of any federal, state or local sUi regulation ~ Damages arising out of bodily injury, (including emotional distress, humiliation, disease or dea1 damage, diminution of value or loss of use and ~ Acts falling under the definition of Personallnjl exception of assault and battery, this exclusion employment practices liability. IiiIi Arising out of the activities of any law enforcerr personnel. Iiiii Strikes riots or civil commotion. ~ Obligations arising out of ERISA Act of 1974 in subsequent amendments or any similar federal regulations including the administration of any I plan or self insurance fund. Iiiiii Damages arising out of principles of eminent d possession etc. ~ Arising from any complaint or enforcement acti governmental agency. ~ Future wages, overtime or similar claims even liquidated damages, claims or suits. EXCLUSIONS (CONTINUED) iiIiii Pollution, lead, asbestos, nuclear etc. MONROE COUNTY HOCC . Premium Summary COVERAGE 2004 - 2005 Public Officials Liability $ 20,789 TOTAL $ 20,789 (1) (1) Does not include Florida surplus lines tax and/or fees - if applicable. Client is Exempt from paying Florida surplus lines tax Option Add TRIA (Terrorism Coverage) $6,930 Additional Quotation Subject To 1. AIRPORT SUPPLEMENTAL APPLICATION 2. lIARD COpy LOSS RUNS 3. PREMIUM DUE UPON RECEIPT OF INVOICE (AT BINDING) MONROE COUNTY BOCC - '. '," IMPORTANT DISCLOSURES C:\TEMPlBoca public offlCial. liability proposal 1204 rev.doc Page 10 MONROE COUNTY BOCC - IMPORTANT DISCLOSURES The proposal is an outline of the coverages proposed by the insurers, based on the information provided by your company. It does not include all the terms, coverages, exclusions, limitations, or conditions of the actual contract language. The policies themselves must be read for those details. Policy forms for your reference will be made available upon request. In addition to the fees and/or commissions retained by Arthur 1. Gallagher & Co., it is understood and agreed that other parties, such as excess and surplus lines brokers, wholesalers, reinsurance intermediaries, underwriting managers, and similar parties, some of which may be owned in whole or in part by Arthur J. Gallagher & CO.'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 client and not Arthur J. Gallagher & Co. The information contained in this proposal is based on the historical loss experience and exposures 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. Gallagher from time to time enters into arrangements with certain insurance carriers or those carriers' reinsurers providing for compensation, in addition to commissions, to be paid by such carriers or reinsurers to Gallagher or its affiliates based on, among other things, the volume of premium and/or underwriting profitability of the insurance coverages written through Gallagher by such carriers or reinsurers. In addition, Gallagher and its affiliates provide management and other services to, and receive compensation for those services from; certain reinsurers that reinsure insurance coverages written through Gallagher by other insurance carriers. The insurance coverages your purchase through Gallagher might be issued by an insurance carrier or reinsured by a reinsurer that has such a relationship with Gallagher or its affiliates. c:\l1lMP\Boca public offlciaJs liability propOI8Il204 J'OV,doc Page 11 MONROE COUNTY BOCC - "......" CHANGES AND DEVELOPMENTS It is important that we be advised of any changes in your operations that may have a bearing on the validity and/or adequacy of your insurance. The types of changes that concern us include, but are not limited to, those listed below: 1. Changes in any operations. 2. Mergers and/or acquisition of new operations. 3. Any newly assumed contractual liability, granting of indemnities, or hold harmless agreements. 4. Circumstances which may require an increased liability insurance limits. Your insurance program will only be as good as the communications maintained between you and your insurance broker. C:\1EMP\Boc:a public officials liability proposal 1204 rev.doc Page 12 . MONROE COUNTY Boec _ '''.,,"",",' ,,,.. ",..,' .., ",_...'-, - " y......, CUENT AUTHORIZAnON TO BIND COVERAGE After careful consideration of your proposal dated November 30, 2004, we accept your insurance program subject to the following: PLEASE CHECK THE DESIRED COVRAGES: AIRPORT PUBLIC OFFICIALS LIABILITY o INCLUDING TRIA o EXCLUDING TRIA 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. Please provide us with a binder(s) and invoice(s) for the coverages agreed upon at your earliest convenience. Agent Signature Client Signature Dated Dated c:\1EMPIBoca public officials liability prop05IIl204 rev.doc Page 13