Item C14BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: April 15, 2009 Division: Employee Services
Bulk Item: Yes X No _ Department: RiskMana eement
Staff Contact Person: Maria L. SlavikX3178
AGENDA ITEM WORDING: Approval to accept proposal from Marsh USA, the County's insurance broker
for the Property Insurance package, through quality rated insurance companies not to exceed $668,991. It is
also being requested that authority be granted to Risk Management to accept an alternative proposal from
Marsh if it is believed to provide equal or superior coverage for a Lower premium.
ITEM BACKGROUND: Provides replacement cost property insurance coverage for county buildings,
contents, communication towers and contractors equipment with a current value of $181,104,221.
PREVIOUS REVELANT BOCC ACTION: The policy was last bid in 2008. On April 16, 2008, the Board
approved the current package with Marsh USA for the Property Insurance through Lexington and Landmark
Insurance Companies.
CONTRACT/AGREEMENT CHANGES: The projected premium is $548,991 which is an increase $100,404
or 22.38% from last year. When adding the projected premium of $120,000 for the additional wind coverage
that is being sought, this would bring the total estimated annual premium to $668,991.
STAFF RECOMMENDATIONS: Approval to renew the policy as submitted by Marsh for the period
of 5/l/09—511/10. In addition, approval to increase the County's wind limits from $5million to
$10 million.
TOTAL COST: not to exceed $668,991 INDIRECT COST: _ BUDGETED: Yes X No _
not to exceed
COST TO COUNTY: $668.991 SOURCE OF FUNDS: Ad valorum
REVENUE PRODUCING: Yes No X AM UNT PER MONTH Year
APPROVED BY: County Atty V" ONlrurc, sing Risk Management
DOCUMENTATION: Included X To Follow Not Required
DISPOSITION: AGENDA ITEM #
Revised 2/27/01
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CONTRACT SUMMARY
Contract with: Marsh USA, Inc.
Contract #
Effective Date:
5/1/09
Expiration Date:
511110
Contract Purpose/Description:
Property Insurance Renewal
Contract Manager: Maria Slavik
3178
Employee Services #1
(Name)
(Ext.)
(Department/Stop #)
for BOCC meeting on 4-15-09
Agenda Deadline: 3/31/09
CONTRACT COSTS
Not to exceed
Total Dollar Value of Contract: $ 668,991 Current Year Portion:
Budgeted? Yes® No ❑ Account Codes: 503-08502-530-450-
Grant: $ - - -
County Match: $ - - - -
ADDITIONAL COSTS
Estimated Ongoing Costs: $ /yr For:
(Not included in dollar value above) (e . maintenance, utilities, janitorial, salaries, etc.)
CONTRACT REVIEW
Changes Date Out
Date In Needed Reviewer
Division Director 22-M Yes❑ NoZ"' _ 3, a--?
Risk Manageyent g-�7-0 Yes[:] No /f
Pam- d ',�°
O.M.B./Purchasii g 3t_05 Yes❑ Nol�-
County Attorney 3 q Yes[:] No[y'
I Comments:
JMti corm Kevised 212 //01 MC F # 2
C
UNTYSMON ROE
KEY WEST FLORIDA 33040
(305)294-4641
Office of the Employee Services Division Director
The Historic Gato Cigar Factory
1100 Simonton Street, Suite 268
Key West, FL 33040
(305) 292-4458 — Phone
(305) 292-4564 - Fax
TO: Board of County Commissioners
FROM: Teresa E. Aguiar,
Employee Services Director
DATE: March 27, 2009
SUBJ: Approval to renew Property Policy
BOARD OF COUNTY COMMISSIONERS
Mayor George Neguent, District 2
Mayor Pro Tern Sylvia I Murphy, District 5
Kim Wigington, District 1
Heather Carruthers, District 2
Mario DiGennaro, District 4
This item requests approval to renew the Property policy with Marsh USA, the County's insurance broker,
through quality rated insurance companies at a projected premium of $548,991 with the same terms and
conditions. The coverage is for the County's buildings, content, contractor's equipment, electronic data
processing equipment and the communication towers. We are also requesting that approval be granted to
secure coverage and increase the County's wind limits from $5 million to $10 million. In the past, we have
been unable to obtain this higher limit of coverage due to the high premium cost. Marsh USA is willing to
offer the County this additional coverage at a projected annual premium of $120,000.
Last year, the County's property was estimated at $172,729,696. This year, the policy will be covering
$182,104,221. This is mainly due to the completion of the Freeman Justice Center and Murray Nelson
Center.
As explained in the attached letter from the County's Insurance Consultant, the renewal of the coverage is
not until May 1, 2009. There is still a strong possibility that in continuing to negotiate and hold discussions
between the agent and insurance companies, we will obtain more favorable pricing than the current estimated
premium ($548,991 + $120,000 = $668,991).
It is recommended that the BOCC approve the property renewal coverage, with the same terms and
conditions, for the period of 5/l /09 — 511110 for an amount not to exceed $548,991. It is also recommended
that the BOCC approve to increase the County's wind coverage from $5 million to $10 million at a projected
premium of $120,000. If you have any questions, please do not hesitate to contact me at 292-4458.
I NTERISK CORPORATION
Consultants
Risk Management
Employee Benefits
March 27, 2009
Ms. Maria Slavik, CPM
Risk Administrator
Monroe County
1100 Simonton St.
Suite 268
Key West, Florida 33040
Subject: Property Insurance Renewal
Dear Maria:
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607-4711
Phone (813) 287-1040
Facsimile (813) 287-1041
The County's Property insurance is scheduled to renew on May 1, 2009. As you are aware, Marsh has
been actively seeking renewal coverage: According to information received from Marsh, they have been
negotiating with Lexington and Landmark Insurance Companies, the current insurers, for favorable renewal
terms. In addition, they have approached the majority, if not all, of the insurance companies that have the
ability and desire to provide the coverages being sought by the County.
Receiving advance renewal premiums from insurers is becoming more difficult due to the fact that insurers
have down sized due to the current economy. This has resulted in insurers focusing their attention to
accounts that have a more immanent renewal date such as April I" while deferring their attention on
policies that have a later renewal date, such as May Is'. A considerable amount of negotiations and
discussions are held between agents and insurance companies when coverages are being placed or renewed.
With insurance companies deferring any serious discussions with the agents until closer to the renewal or
effective dates, makes it difficult to receive realistic terms, conditions and pricing in advance.
Based on the negotiations and discussions Marsh has had with the various insurance companies, the only
commitments that have been formally received to date is from Lexington and Landmark Insurance
Companies, the incumbent insurers. They have agreed to renew the County's Property Insurance with the
same terms and conditions for an annual premium of $548,991. This represents an increase of $100,404
(22%) over the 2008/09 premium. Lexington and Landmark have indicated that the additional premium is
needed to help offset the claim that was paid when the ramp collapsed during the expansion of the Key
West International Airport. Recently the Board approved signing a proof of loss for this claim amounting
to $161,060.
One of the major objectives the County established for this renewal was to increase its limits for wind
related losses. In the past, the County could only purchase $5 million of wind coverage. Marsh has been
able to obtain commitments for an additional $5 million (total of $10 million) of wind coverage for an
annual cost of $120,000. As with the remainder of the County's program, Marsh has yet been able to enter
into serious negotiations and discussions with the insurers and it is anticipated that more favorable pricing
will ultimately be obtained.
When you combine the $548,991 that is currently being proposed for the renewal of the County's Property
insurance as it currently exists and the proposed $120,000 that is being proposed for increasing the wind
limits from $5 million to $10 million, the 2009/10 annual premium will be $668,991. While this represents
nearly a 50% increase in the premiums the County paid during the 2008/09 policy period, it will provide
valuable coverage (higher wind limits) that the County could not previously obtain. It should also be
recognized that Marsh has not been able to conduct serious negotiations and discussions with the insurers
and it is anticipated that the final premium will ultimately be lower.
It is recommended that the Board approve the renewal of the County's Property insurance as being
proposed by Marsh USA for a cost not to exceed $548,991. It is also being recommended that the County
consider increasing its wind limits from $5 million to $10 million for an annual cost not to exceed
$120,000.
Please give me a call if you have any questions or wish to discuss this issue in more detail.
Cordially,
INTERISK CORPORATION
Sidney G. Webber
CPCU, ARM
CC: Teresa Aguiar