Item C13t
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: February 20,2008 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 Pollution Liability
Insurance package through Indian Harbor Insurance Company.
ITEM BACKGROUND: To protect the County from the potential liability associated with an
accidental discharge of pollutants from one of its fuel storage tanks and the potential liability
associated with a pollution incident at other scheduled locations.
PREVIOUS REVELANT BOCC ACTION: On February 16, 2005, the BOCC approved the bid to
Indian Harbor Insurance Company for 3 years with a premium of $114,445.
CONTRACT/AGREEMENT CHANGES: Renew the Pollution Liability Insurance with Indian
Harbor Insurance Company for the period beginning March 12, 2008 with a premium of $86,299 for a
three year period. The deductible of the new policy will increase from $50,000 to $100,000.
STAFF RECOMMENDATIONS: Since the County has never filed a Pollution claim, staff believes
the premium savings justifies the additional exposure of increasing its deductible from $50,000 to
$100,000. Staff also believes that the premium savings $40,000 associated with a three year policy is
the best option for the County.
Approval to accept proposal from Indian Harbor Insurance Company for a three (3) year option with a
$100,000 deductible at a cost of $86,299.
TOTAL COST: $86,2D
COST TO COUNTY: $86,299
BUDGETED: Yes X No
SOURCE OF FUNDS: AD VALOREM
REVENUE PRODUCING: Yes _ No X AMOUNT PER MONTH Year
APPROVED BY: County Atty� O*urchasing Risk Management LIZ
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 Broker
Contract #
Effective Date:
3/12/2008
Expiration Date:
3/12/2011
Contract Purpose/Description:
Pollution LiabilityLiability Renewal
Contract Manager: Maria Slavik
3178
Risk Management #1
(Name)
(Ext.)
(Department/Stop #)
for BOCC meeting on 2-20-2008
Agenda Deadline: 2-5-2008
CONTRACT COSTS
Total Dollar Value of Contract: $ 86,299 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 1p Needed Reviewer
Division Director 6LL—a Yes[-] Nol► 4a—
o'�? • .�
Risk Management Ai Yes❑ Nod
�-
O.M.B./Purchasing Yes❑ Nod
County Attorney 57' Db Yes❑ Nod
I Comments:
OMB Form Revised 2/27/01 MCP #2
C
UNTYMON 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, ! �J
Employee Services Dire o U x
SUBJ:
Approval of bid proposal
BOARD OF COUNTY COMMISSIONERS
Mayor Charles "Sonny" McCoy, District 3
Mayor Pro Tern Mario Di Gennaro, District 4
Dixie M. Spehar, District 1
George Neugent, District 2
Sylvia J. Murphy, District 5
DATE: February 1, 2008
This item requests approval to award the bid proposal for Pollution Liability Insurance to Indian Harbor
Insurance Company at a three year premium of $86,299.00. This policy is for coverage to pay for any legal
obligations of the county arising out of the discharge, dispersal, release, seepage, migration or escape of
smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, gases or other similar hazardous materials
from scheduled locations. The current policy expires March 12, 2008.
This policy is the most attractive of the six (6) proposals received. The County's current policy covers a
three (3) year period at a premium of $114,445 (average of $38,148.33 yr) with a $50,000 deductible. The
proposed policy would provide the same coverage for a three (3) year period at a premium of $86,299
(average of $28,766.33 yr) with a $100,000 deductible.
It is felt that due to the County never having to file a pollution liability claim, the savings associated with the
higher deductible is justified. In addition, by purchasing a three year renewal instead of a one year renewal,
the County will be saving approximately $40,000. It is therefore recommended that the BOCC approve the
recommendation as submitted.
If you have any questions on this item, please do not hesitate to contact me at X4458.
I NTERISK CORPORATION
Consultants
Risk Management
Employee Benefits
January 29, 2008
Ms. Maria Slavik
Risk Management Specialist
Monroe County
1100 Simonton St.
Suite 268
Key West, Florida 33040
Subject: Evaluation of Proposals for Pollution Liability Insurance
Dear Maria:
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607-4711
Phone (813) 287-1040
Facsimile (813) 287-1041
The County's current Pollution Liability insurance is provided by Indian Harbor Insurance Company with
limits of $5 million and a deductible of $50,000. The policy was written on a three (3) year basis and
expires on March 12, 2008. The County paid a three year premium of $1 14,445 for the policy.
The County received proposals from three (3) agents in response to its RFP for the renewal of the policy.
The agents responding were:
➢ Marsh USA
➢ L B Bryan
➢ The Florida League of Cities
Marsh submitted separate proposals from Indian Harbor (the incumbent insurer) and Illinois Union
Insurance Company. L B Bryan submitted a proposal from Steadfast Insurance Company and the Florida
League submitted a proposal from American International Specialty Lines Insurance Company. All
companies proposed enjoy a favorable rating from the A.M. Best Company, the leading evaluator of
insurance company operations. The terms and conditions of the proposals submitted by Marsh, L B Bryan
and the Florida League were comparable and it is believed that all of them would adequately protect the
interests of the County.
The three year premium proposed by Steadfast and L B Bryan was $1 1 0.999. They also offered an annual
premium of $49,945. The limits of both options were $5 million with i $50,000 deductible. Since the
premiums proposed by Steadfast and L B Bryan were higher than those proposed by Marsh and the terms
and conditions were essentially the same, it is recommended that the Steadfast Insurance Company's
proposal as submitted by L B Bryan be eliminated from further consideration.
The three year premium submitted by The Florida League of Cities' from American International Specialty
Lines Insurance Company was $108.251. The annual premium was $67,701. Both options contained
limits of $5 million with a $50,000 deductible. Since the premiums proposed by American International
and The Florida League were higher than those proposed by Marsh and the terms and conditions were
essentially the same, it is recommended that the American International Specialty Lines Insurance
Company's proposal as submitted by The Florida League of Cities be eliminated from further
consideration.
Marsh USA submitted three (3) proposals for consideration. The first proposal provided coverage from
Indian Harbor Insurance Company (the incumbent insurer) with terms, conditions, limits and deductibles
comparable to the expiring policy. The proposed three year premium for this option was $106,265. Marsh
also submitted a two year option for a premium of $84,275 and a one year option for a premium of
$58,128.
Marsh also submitted another proposal from Indian Harbor with limits of $5 million and a deductible of
$100,000. The proposed three year premium for this option was $86,299. The proposed premium for the
two year option was $68,446 and the proposed premium for the one year option was 47,206.
Marsh also submitted a proposal from Illinois Union Insurance Company with limits of $5 million and a
deductible of $50,000. The proposed three year premium from Illinois Union was $130,976. The annual
premium proposed by Illinois Union was $68,935. Illinois Union did not propose a two year option. The
proposed premiums for the Illinois policies were higher than those proposed by Indian Harbor without
providing any additional protection. It is therefore recommended that the Illinois Union Insurance
Company's proposal as submitted by Marsh be eliminated from further consideration.
It is believed that Indian Harbor, through Marsh, has submitted the most attractive proposals. It is also
believed that since the County has never filed a Pollution Liability claim, the savings associated with Indian
Harbor's $100,000 deductible option justifies the additional exposure that would be assumed by the
County. It is therefore recommended that Monroe County renew its Pollution Liability Insurance with
Indian Harbor Insurance Company for the period beginning March 12, 2008. In addition, the County could
save nearly $40,000 ($86,299 - $47,206) if they elected to purchase a three year policy. It is therefore also
recommended that Monroe County select Indian Harbor's three (3) year option with a deductible of
$100,000.
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
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