Item C08am
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: July 16, 2008 Division: Employee Services
Bulk Item: Yes X No _ Department: Risk Management
Staff Contact Person/Phone#:Maria L. Slavik X3178
AGENDA ITEM WORDING: Approval to accept proposal from Darwin National Insurance
Company through Gehring Group for Airport Public Officials Liability and Employment Practices
Liability Insurance.
ITEM BACKGROUND: Provides Liability insurance coverage for the Marathon and Key West
airports. Per Monroe County purchasing policy this coverage was put out for bids in April, 2008, with
incumbent providing lowest proposal. Policy period will be 7/27/08-7/27/09.
PREVIOUS REVELANT BOCC ACTION: Coverage was previously renewed in December 2006
for a period of 19 months which extended the policy term to bring the expiration date concurrent with
the Airport Liability insurance.
CONTRACT/AGREEMENT CHANGES: Accept the Airport Public Officials Liability and
Employment Practices Liability through Gehring Group. The proposed annual premium is a decrease
of $10,804 (57%) lower than the premium the County is currently paying.
STAFF RECOMMENDATIONS: Approval to accept proposal from Darwin National Insurance
Company through Gehring Group at a cost of $7,931.54.
TOTAL COST: $7,931.54 BUDGETED: Yes X No
COST TO COUNTY: $7,931.54
REVENUE PRODUCING: Yes _ No X AMOUNT PER MONTH Year _
APPROVED BY: County Atty �' chasing Risk Managemen
DOCUMENTATION:
DISPOSITION:
Revised 2/27/01
Included X To Follow Not Required
AGENDA ITEM #
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CONTRACT SUMMARY
Contract with: Gehring Group
Contract #
Effective Date:
7/27/2008
Expiration Date:
7/27/2009
Contract Purpose/Description:
Airport Public Officials Liability and Employment
Practices Liability Renewal
Contract Manager: Maria Slavik
3178
Risk Management #7
(Name)
(Ext.)
(Department/Stop #)
for BOCC meeting on 7/16/08
Agenda Deadline: 7-1-2008
CONTRACT COSTS
Total Dollar Value of Contract: $ $7,931.54 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) (eg. maintenance, utilities
CONTRACT REVIEW
anitorial, salaries, etc.
Changes Date Out
Date h j Needed -viewer
Division Director (pal_ Yes❑ No� • L
Risk Manag mentYes❑ No[jJ/ej
�, . C
O.M.B./Pang urch(a �3D_4S' Yes❑ Nov/
County Attorney - �` Yes[:] No[3/'
3a -o F
Comments:
"muD rui m mcviNeu G/L //v i 1vit-Y f'L
C
UNTYjo'��qNROE
KEY WEST DA 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, Director
Employee Services
DATE: June 30, 2008
BOARD OF COL`NTY COMMISSIONERS
Mayor Mario Di Gennaro, District 4
�^ Mayor pro Tem Charles -Soimy" McCoy. District 3
Dixie M. Spehar, District I
George Neugem, District
Sylvia J. Murphy, District 5
SUBJ: Airport liability (Public Officials & Employment Practices)
In April this year, a Request for Proposals was distributed in accordance with the County's purchasing policies and procedures. Darwin National
Insurance Company through Gehring Group submitted the best proposal. The proposed annual premium came in at 57% lower than our current
premium. The terms and conditions were consistent with the current policy with the exception that a $5,000 deductible would apply to all Public
Officials liability claims and a $10,000 deductible would apply to all Employment Practices liability claims. The current deductible is $100,000.
This coverage is for losses arising out of the acts, errors or omissions of an Official, Board Member, Employee Or Volunteer of Monroe County
which constitutes a breach of duty that is imposed by law or employment contract and which arise out of the County's Airport operations.
It is recommended that we renew our Airport Public Officials and Employment Practices liability insurance with Darwin National Insurance
Company as submitted by Gehring Group at an annual premium of $7,931.54 for the term of July 08 — July 09.
INTERISK CORPORATION
Consultants
Risk Management
Employee Benefits
June 26, 2008
Ms. Maria Slavik
Risk Management Specialist
Monroe County
1 100 Simonton St.
Suite 268
Key West, Florida 33040
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607-4711
Phone (813) 287-1040
Facsimile (813) 287-1041
Subject: Evaluation of Proposals for the County's Airport Liability and Airport Public Officials Liability
Insurance
Dear Maria:
The County's current Airport Liability Insurance is provided by ACE Property and Casualty Insurance
Company with limits of $100 million. The County's current Airport Public Officials Liability and
Employment Practices (EPLI) policy is provided by American Home Assurance Company (AIG) with
limits of $2 million. Both policies expire on July 27, 2008. The current premium of the Airport Liability
policy is $88,055.89 and the current premium of the Airport Public Officials Liability/EPLI policy is
$18,736.
In compliance with the County's purchasing procedures, a Request for Proposals (RFP) was prepared and
distributed through Demand Star.
Normally insurance companies will only work with one agent at a time on any given account. If an
insurance company receives a submission from an agent that had already been submitted by another agent,
the insurance company will decline to honor the second agent's submission. To avoid the possibility of one
agent submitting requests to all insurers that have the capability and desire to provide the insurance being
requested , thus preventing all other agents from developing proposals, all interested agents were required
to submit a list of insurance companies they wanted to utilize to structure the County's program. A total of
five (5) different agents submitted such requests for the County's Airport Liability insurance consisting of
eleven (1 1) different insurance companies. The same five (5) agents submitted requests for a total of
sixteen (16) different insurance companies for the County's Airport Public Officials/EPLI insurance. It is
believed that the insurance companies requested represented the majority, if not all, of the insurers with the
ability to provide the insurance being sought by the County. It should be recognized that just because an
agent requested a particular insurance company, there was no guarantee that proposals would be received
from all requested companies.
Three (3) of the agents that had expressed initial interest in the County's RFP submitted formal proposals
by the scheduled deadline of June 17, 2008. The remaining two (2) agents indicated that they were unable
to structure a competitive program utilizing the companies that had been requested and were assigned.
To facilitate the discussion of the proposals received the Airport Liability and Airport Public
Officials/EPLI insurance will be discussed under separate caption.
Airport Liability Insurance
Proposals for the County's Airport Liability Insurance were received from:
Arthur J. Gallagher
➢ Public Risk Insurance Agency (PRIA)
➢ Gehring Group
All of the proposals received included terms and conditions that were consistent with the expiring policy.
Some of the proposals contained options for varying limits and expanded coverage for War and Terrorism
acts. Attached and made part of this report, is a side -by -side comparison of the major features of each
proposal.
ACE Property and Casualty Insurance Company through the Arthur J. Gallagher agency submitted the most
attractive proposal. Not only were the terms and conditions the same as the expiring policy, the proposed
annual premium was $38,089 (43%) lower than the premium the County is currently paying. National
Union, through Arthur J. Gallagher submitted the second most attractive option at an annual premium of
$51,188.89. PRIA submitted a joint proposal from Old Republic Insurance Company and Lloyds of
London with a combined annual premium of $75,449. The Gehring Group submitted a proposal from the
Global Aerospace Insurance Pool that is comprised of four (4) different insurance companies with an
annual premium of $79,386.
ACE, Old Republic/Lloyds and Global Aerospace also offered proposals for limits of $50 million and $75
million. It is believed that the size of aircraft now landing at the Key West International Airport and the
minimal premium savings justifies the continuation of purchasing limits of $100 million.
In addition, ACE, National Union and Old Republic/Lloyds offered coverage for claims arising out of War
and Terrorist activities for additional premiums. It is not believed that the limited exposure for such
potential claims justify the additional premiums that were proposed.
Based on the proposals submitted, it is recommended that Monroe County renew its Airport Liability
insurance with ACE Property and Casualty Insurance Company as submitted by Arthur J. Gallagher. It is
further recommended that the County continue to purchase limits of $100 million and not purchase the
optional War and Terrorism coverage that ACE offered. This will produce an annual premium of
$49,697.95 which is a significant reduction in the premium currently being paid. The results of
remarketing the County's Airport Liability insurance has to be viewed as favorable. Not only will the
County maintain the continuity of their current insurance program, they will realize a premium savings of
$38,089.
Airport Public Officials Liability and Employment Practices Liabilitv Insurance
Proposals for the County's Airport Public Officials Liability and Employment Practices Liability Insurance
were received from:
Arthur J. Gallagher (the incumbent agent)
➢ Public Risk Insurance Agency
➢ Gehring Group.
Gallagher proposed using National Union Fire Insurance Company which is an affiliated company of
American Home Assurance Company (the incumbent insurer). It is believed that if the County selects
Gallagher's proposal, the policy will actually be issued by American Home. Since both companies are part
of the same parent corporation (AIG), the level of protection and security would be the same. National
Union proposed limits of $2 million and a deductible of $100,000. Coverage would be provided on a
Claims Made basis with Full Prior Acts Coverage. The terms and conditions of National Union's proposal
are consistent with the current program. The proposed premium was $10,324.26 which is $8,41 1.74 (45%)
lower than the County's premium for the current policy .
Public Risk Insurance Agency submitted a proposal from Illinois Union Insurance Company with terms,
conditions, limits and deductibles consistent with the expiring policy. The proposed premium for this
option was $13,774.38. Since this option was priced over twenty-five percent (25%) higher than those
submitted by Gallagher and the Gehring Group, it is recommended that it be eliminated from further
consideration.
The Gehring Group submitted a proposal from the Darwin National Insurance Company. The terms and
conditions were consistent with the expiring policy with the exception that a $5,000 deductible would apply
to all Public Officials Liability claims and a $10,000 deductible would apply to all Employment Practices
Liability claims. These deductibles are considerably lower than the $100,000 deductible that would apply
if the National Union proposal as submitted by Gallagher were selected. The remainder of the terms and
conditions of the Darwin proposal were consistent with the expiring policy. The proposed annual premium
of the Darwin proposal was $7,931.54. This premium is $2,393 lower than the one proposed by Gallagher
and National Union. It is not believed that the premium savings alone justifies changing insurers and
agents. However, the lower deductibles makes the Darwin proposal more attractive. It is therefore
recommended that the County select the proposal from Darwin National Insurance Company as submitted
by the Gehring Group for its Airport Public Officials/Employment Practices Liability insurance.
Darwin National also offered alternative limits of $1 million, $3 million, $4 million and $5 million. None
of the proposals for the alternative limits were viewed as a cost effective option and are being
recommended to be eliminated from further consideration.
Please give me a call if you have any questions or wish to discuss this issue in more detail.
Cordially,
INTERISK CORPORATION
/JA_ V�"&J
Sidney G. Webber
CPCU, ARM
CC: Teresa Aguiar
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