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Home My WebLink About6/3/2015 - STAFF REPORTS - 2.P. Q;p Q P`M$,. .y c V N x A x �oono'° x Cq<fFOR��P City Council Staff Report DATE: JUNE 3, 2015 Consent Agenda SUBJECT: APPROVE ANNUAL INSURANCE POLICY RENEWALS FOR THE CITY'S INSURANCE PORTFOLIO FOR FISCAL YEAR 2015-16 FROM: David H. Ready, City Manager BY: Douglas Holland, City Attorney SUMMARY The City is self-insured and annually purchases various lines of insurance coverage to minimize the adverse effects of accidental losses and claims against the City. This action would authorize the purchase of various lines of insurance for FY 2015-16. RECOMMENDATION: Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AUTHORIZING KEENAN & ASSOCIATES AS THE CITY'S BROKER OF RECORD, TO PURCHASE PROPERTY LIABILITY, EXCESS EARTHQUAKE/FLOOD LIABILITY (DIFFERENCE IN CONDITION), EXCESS LIABILITY, EXCESS WORKERS COMPENSATION, AIRPORT OWNERS AND OPERATORS LIABILITY, VILLAGE FEST LIABILITY, MULTI MEDIA LIABILITY, AIRCRAFT HULL LIABILITY, CRIME/FIDELITY LIABILITY, AND CYBER LIABILITY INSURANCE POLICIES FROM VARIOUS CARRIERS FOR POLICY YEAR 2015-2016, EFFECTIVE JULY 1, 2015." STAFF ANALYSIS: The City is self insured for major risk programs such as property liability, excess earthquake/flood liability, general liability, auto liability and workers' compensation. In order to protect the assets of the City from potential loss, the City purchases various lines of insurance coverage for these risks. To assist in the purchase of various lines of insurance, the City entered into an agreement with Keenan and Associates for professional insurance brokerage services. Keenan and Associates has marketed the City's insurance portfolio to twenty five (25) carriers and has solicited pricing that, if approved, is $29,692 (-2.6%) less in total premium than the current year for the same level of coverage and deductibles. The following is a summary of last year's premiums and staffs recommendation for the July 1 renewal for Fiscal Year 2015-16: ITEM NO. City Council Staff Report June 3, 2015 -- Page 2 Annual Insurance Renewals COVERAGE: Premium FY 14-15 Premium FY 15-16 PROPERTY Premium $386,417 $380,670 Deductibles $250,000 for Earthquake $250,000 for Earthquake $100,000 Flood $100,000 Flood $10,000 all other Losses $10,000 allother Losses Limits 1"$5M EO/Flood not 1"$5M EQ/Flood not included included Terrorism coverage included Terrorism coverage included Airport Runways$80M Airport Runways$80M DIC (Earthquake/Flood) Premiums $172,035(City+Airport) $163,056(City+Airport) Limits $5,000,000 $5,000,000 (excess of$5.010) (excess of$5.OM) $274,048(dedicated WWrP) $241,746(dedicated WWTP) $25,000,000 $25,000,000 COMPREHENSIVE EXCESS GENERA &AUTO LIABILITY Premium $144,919 $150,788 Self-Insured Retention $650,000 $650.000 Limits $10,000,000 $10.000,000 EXCESS WORKERS' COMP Premium $131,781 $142,297 SIR-Police&Fire $1,000,000 $1,000,000 SIR-Miscemployees $1,000,000 $1,000,000 Limits $50,000,000 per occurrence $50,000,000 per occurrence AIRPORT LIABILITY Premium $28,089 $28,791 Deductible $1,000 $1,000 Limits $50,000,000 $50,000,000 Terrorism coverage included Terrorism coverage included VILLAGE FEST Premium $12,546 $13,109 Deductibles $1,000 $1,000 Limits $1,000,000/$2,000,000 $1,000,000/$2,000,000 AGG/$2,000,000 AGG/$2,000,000 PROD/$100,000 FIRE PROD/$100,000 FIRE MULTI MEDIA Premium $7,895 $7,895 Deductibles $5,000 $5,000 Limits $1,000,000 $1,000,000 AIRCRAFT HULL Premium $3,138 $2,824 Deductible $75K hull, $100 In $75K hull, $100In Limits Ni Static Motion/$500 Static $5,000,000 $5,000,000 Terrorism coverage included Terrorism coverage included CRIME/FIDELITY Premium $2,802 $2,802 Deductibles $10,000/$1,000 $10,000/$1,000 Limits $1,000,000/$100,000/$300,000 $1,000,000/$100,000/$300,000 Total Premiums $1,163,670 $1,133,978 02 City Council Staff Report June 3, 2015 -- Page 3 Annual Insurance Renewals PROPERTY PROGRAM: Under the All Risk Property insurance program, the quote of $380,670 from Affiliated FM Insurance Co. is for the same coverage as last year, including the Airport runway coverage, wind and tree coverage, supplemental coverage for terrorism, builder's risk, and accounts for the increase in the City's property total insurable values (TIV) now required to include all traffic signals, traffic poles, light poles, meters and other transmission systems. The premium is $5,747 (-1.5%) less than last year and is driven by Keenan negotiating on behalf of the City to be offered pricing comparable to larger joint purchasing groups, such as MIC (Municipal Insurance Cooperative) and a slightly softer property insurance market this year. Also this year we did not go to the market with any large new property claims as we had in prior years with the wind storm claims and City Hall fire. Affiliated FM was the most competitive carrier and has proven to be a very professional and responsive carrier in the processing of claims, and has worked well with city staff and Keenan. DIFFERENCE IN CONDITION (DIC) PROGRAM: The City is self-insured and purchases various lines of insurance each year for additional protection to the Property Program above. Difference in Condition (additional flood and earthquake coverage) is almost always excluded from commercial property policies and may be purchased separately to enhance coverage. The DIC market was harder last year due to the billions of insured losses sustained in catastrophic earthquakes, floods, tornadoes and hurricanes, and as such the City benefits from a slightly softer market this year with fewer catastrophic insurable losses impacting the market. The City's total insurable value (TIV) is approximately $524 million for FY 15-16, up from $512 million in FY 14-15 due to the new requirement to include traffic signals, traffic poles, light poles, meters and other transmission systems. While it is highly unlikely that the City would have to replace every single facility in the event of an earthquake, facilities such as the Airport and Wastewater Treatment Plant are considered critical to the continued operations of the City. These two facilities alone have an estimated replacement cost of over $148 million. Six years ago Council authorized the purchase of Differences in Condition (DIC) insurance to augment its primary property earthquakefflood insurance policy to cover the Wastewater Treatment Plant and all other City Buildings (including the Airport buildings). Staff is again recommending a separate dedicated stand-alone policy to cover the Wastewater Treatment Plant from the first dollar to $25 million for a total premium cost of $241,746 that would be paid in full by the wastewater enterprise account. Also, staff recommends $5 million excess of$5 million per occurrence/annual aggregate in coverage for all other City Buildings (including the Airport buildings) for a total cost of $163,056 and the cost would be shared by the City's General Fund and Airport enterprise account. Keenan was able to negotiate with our current carriers for a total combined DIC premium reduction of$41,281 (-9.2%) for this important coverage. 03 City Council Staff Report June 3, 2015 -- Page 4 Annual Insurance Renewals COMPREHENSIVE EXCESS GENERAL & AUTO LIABILITY PROGRAM: Litigation against public agencies due to the Joint & Several Liability law created by Prop 51 (aka "the deep pockets rule") makes this coverage critical for the city. The incumbent, Argonaut, has quoted a $150,788 premium, which is $5,869 (+4.0%) more than last year, with the same $10M limit of coverage and $650K retention (both SIR and EPLI). This coverage was heavily marketed to multiple carriers, including the Municipal Insurance Cooperative, and options were presented that would increase coverage, limits, and reduce SIR at significant additional premium costs ranging from $40,000 to $60,000 more. However, based upon the City's claims history under this coverage and current conditions, Keenan and staff recommend renewing the same coverage as last year for this relatively small premium increase. EXCESS WORKERS' COMPENSATION PROGRAM: Maintenance of Excess Workers' Compensation insurance is important to protect the City from the negative financial consequences of potential catastrophes involving multiple employee injuries or deaths from occurrences, such as major fires, police activities, terrorist attacks, and earthquakes during working hours. The Workers' Compensation market is hardening due to the failure of SB863 (reform) to realize anticipated savings, inflation in medical costs, longer life expectancy, low investment returns and adverse claims experience for full service cities with police and fire departments which has resulted in fewer carriers willing to underwrite the coverage in the State of California. Few carriers would quote this coverage and presented options that would have significantly increased premiums by $42,280 to $52,600 for higher limits and reduced SIR with alternate buffer coverage. Based upon the City's claims history and values, Keenan and staff recommend renewing our $1 million per claim / $50 million employer liability limit for $142,297 with the incumbent, Safety National, at a flat rate to total payroll, which equates to a $10,516 (+7.9%) increase in premium over last year. AIRPORT PROGRAM: Airport Liability covers incidents such as injury to a person (e.g: passenger slip and fall in terminal) or damage to a plane (e.g: airport equipment hits a plane) that occur on the premises. Aircraft Hull Liability is specifically for the 1974 Cessna Aero Squadron plane, covering the property itself and the City's liability in the event of an accident. The combined cost of these two policies from ACE and Westchester is $31,615 which includes terrorism and war coverage, and is $388 more (+1%) increase over last year, attributed to the Airport Liability policy as a result of the increased traffic/enplanements at the Palm Springs International Airport. While AIG did offer a competitive quote that would be $1,778 less, staff is recommending renewal with ACE at the nominal increase to maintain consistency with processing and handling of pending current claims and not change carriers at this time. 04 City Council Staff Report June 3, 2015 -- Page 5 Annual Insurance Renewals MISCELLANEOUS: For the Village Fest, Multi Media, and Crime/Fidelity policies, Keenan's marketing efforts resulted in a combined premium of $23,243, which is $563 (+2.4%) more than last year due primarily to Nautilus's rate increase for Village Fest. There are limited carriers writing these specialty policies and the incumbents offered the most competitive quotations. NEW: CYBER LIABILITY INSURANCE: Cyber and data breach is one of the greatest risks facing public agencies as well as private companies today. The City has received a quotation from Ironshore Specialty Insurance Company for new Cyber and Data Breach coverage with a $1 million limit and a $15,000 SIR at an annual premium of $16,462.53. This quotation is lower than the premium estimate of $25,000, which has been included in the proposed FY 15-16 Risk Management budget. FISCAL IMPACT: The total cost of recommended insurance coverage to replace expiring coverage to all funds for the fiscal year is $1,150,441 which includes the new Cyber Liability Insurance coverage as discussed above. The renewal premium is $29,692 less than the current year for the same level of coverage and deductibles, which represents a 2.6% decrease. The additional cost of the Cyber Liability is $16,463. All premium costs, including the recommended new Cyber Liability Insurance, will be allocated in the respective FY 15-16 Risk Management and enterprise fund accounts as appropriate. MES THOMPSON DOU6UAS C. HOLLAND Chief of Staff/City Clerk City Attorney DAVID H. READY City Manager Attachments: Proposed Resolution Broker Renewal Summary 05 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA AUTHORIZING KEENAN AND ASSOCIATES, AS THE CITY'S BROKER OF RECORD, TO PURCHASE PROPERTY LIABILITY, EXCESS EARTHQUAKE/FLOOD LIABILITY (DIFFERENCE IN CONDITION), EXCESS LIABILITY, EXCESS WORKERS COMPENSATION, AIRPORT OWNERS AND OPERATORS LIABILITY, VILLAGE FEST LIABILITY, MULTI MEDIA LIABILITY, AIRCRAFT HULL LIABILITY, CRIME/FIDELITY LIABILITY, AND CYBER LIABILITY INSURANCE POLICIES FROM VARIOUS CARRIERS FOR POLICY YEAR 2015-2016, EFFECTIVE JULY 1, 2015. The City Council of the City of Palm Springs, California, finds: A. The City is self insured for major risk programs, such as property, general liability, auto liability and workers' compensation. B. The City annually purchases various lines of insurance coverage to minimize the adverse effects of accidental losses and claims against the City. C. The City is located in the vicinity of several known active and potentially active earthquake faults, including the San Andreas, the San Jacinto and the Elsinore faults. D. The topography of the City makes it prone to flooding, especially during times of heavy rainfall. E. The City purchases a primary earthquake and flood insurance policy. F. The City supplements its primary insurance policy with excess coverage to properly protect its public facilities from catastrophic loss from earthquake or flood. G. The City Council appoints a broker of record to purchase insurance policies for the City and the City's insurance broker has solicited proposals from various insurance companies for insurance coverage. NOW, THEREFORE, the City Council resolves: SECTION 1: The City Council of the City of Palm Springs, California authorizes Keenan & Associates, as the City's Broker of Record, to purchase the following insurance policies for Fiscal Year 2015-16: 06 Resolution No. Page 2 COVERAGE: Premium FY 15-16 PROPERTY Premium $380,670 Deductibles $250,000 for Earthquake $100,000 Flood $10,000 all other Losses Limits 1"$5M EQ/Flood not included Terrorism coverage included Airport Runways$SOM DIC (Earthquake/Flood) Premiums $163,056(City+Airport) Limits $5,000,000 (excess of$5.OM) $281,777(dedicated WWTP) $25,000,000 COMPREHENSIVE EXCESS GENERA &AUTO LIABILITY Premium $150,788 Self-Insured Retention $650,000 Employment Practices, $650,000, all other: Limits $10,000,000 EXCESS WORKERS'COMP Premium $142,297 SIR-Police&Fire $1,000,000 SIR-allother employees $1,000,000 Limits $50,000,000 per occurrence AIRPORT LIABILITY Premium $28,791 Deductible $1,000 Limits $50,000,000 Terrorism covera a included VILLAGE FEST Premium $13,109 Deductibles $1,000 Limits $1,000,000/$2,000,000 AGG/$2,000,000 PROD/$100,000 FIRE MULTI MEDIA Premium $7,895 Deductibles $5,000 Limits $1,000,000 AIRCRAFT HULL Premium $2,824 Deductible $75K hull, $100 In Limits Motion/$500 Static $5,000,000 Terrorism coverage included CRIME/FIDELITY Premium $2,802 Deductibles $10,000/$1,000 Limits $1,000,000/$100,000/$300,000 Total Premiums $1,133,978 07 Resolution No. Page 3 CYBER/DATA Premium $16,462.53 Deductibles $15,000 Limits 1,000,000 Aggregate SECTION 2. The City Manager is hereby authorized to accordingly adjust the budget and allocate the insurance expense to the appropriate enterprise and other funds and may authorize any changes that result in lower premium costs for the same or better coverage that the broker may present between now and June 30, 2015. SECTION 3. The City Manager is hereby authorized to execute any documents to effectuate such actions. ADOPTED THIS 3rd DAY OF JUNE, 2015. David H. Ready, City Manager ATTEST: James Thompson, City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on June 3, 2015 by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California 08 May 21, 2015 Risk Management Insurance Committee c/o Craig L. Gladders, C.P.M. Procurement&Contracting Manager City of Palm Springs 3200 Tahquitz Canyon Way Palm Springs, CA, 92262 RE: 2015-2016 Property&Casualty Renewal Proposal Risk Management Insurance Committee, We are pleased to present the City s 2015-2016 Property&Casualty renewal proposal. The insurance and reinsurance market continues to be relatively soft with an abundance of capacity and low catastrophic losses during the past year. This bodes well for the City, however, there continues to be the challenges around public entity perception and long tail exposure. Starr Indemnity, one of the largest writers for public entity business made the decision to cease writing public entity business in California due to their experience in law enforcement liability and long tail risks such as abuse and molestation which has become an epidemic similar to the situation incurred by the Catholic Church several years ago. Unfavorable Statutory Legislation extending the filing of lawsuits for minors to age 26 further compounds this challenge in the near and long term Cities are also dealing with aging facilities,highly publicized and scrutinized law enforcement matters, data breach and cyber liability,employment related claims such as harassment and wrongful ternrination and pedestrian safety issues. In addition, rising medical costs,longer life expectancy, low investment returns, and WC Reform(SB863) not materializing as proclaimed continues to challenge the Excess Worker's Compensation market. In spite of this,we negotiated flat to rate decreases for almost every line of coverage and the City will enjoy an overall premium decrease compared to the expiring structure. There are several options to consider and following is a summary of the renewals by line of coverage. • Property: During last year's renewal, we were confronted with the Citys nearly $2 million in Property claims for the previous 3 years. We had marketed the renewal to various carvers,though Affiliated FM provided a renewal as though you were pan of the Municipal Insurance Cooperative joint purchasing group. While the City elected not to join MIC,we were successful in negotiating with Affiliated FM to honor the pricing. Because of this,the City's Property rate is extremely competitive and this year,there weren't any markets that could provide competitive alternatives to your current rates,terms and conditions. We negotiated a 5% decrease in your rate with Affiliated FM, however,they are excluding coverage for Transmission of Distribution Systems, which includes street lights and traffic signals. In order to include this coverage, there is an additional premium of$12,244, so the total renewal premium is $380,670,which LiaaaeNa 0451271 1 Keenang is a $5,747 or 1.48% savings from expiring. There are some other minor policy exclusions and sublimits that we will review with you. • Excess Liability: We marketed the coverage to the incumbent Alteris Public Risk Solutions (Argonaut Insurance Company), as well as,Allied Public Risk, Princeton,Brit Global Specialty and Great American through the Municipal Insurance Cooperative. The recent potential pedestrian CAT claim created some last minute challenges,though we were successful in securing quotations from Argonaut,Brit and the Municipal Insurance Cooperative. The City currently has a $650,000 per claim SIR and we have options through Brit and the Municipal Insurance Cooperative for$500,000 SIR's. Argonaut will review the SIR next year,though for this year they would only offer a$650,000 option at a 4.04% premium increase. Total City expenditures increased nearly 10% though we were able to work around this to mitigate the impact to premium. Brit Global Specialty provided quotations with$2 million and$10 million in limits along with"clash cover" which essentially limits the SIR if a claim involves multiple lines of coverage,such as general liability and auto liability. The Municipal Insurance Cooperative provided an option that includes coverage for Inverse Condemnation, Breach of Contract,Injunctive Relief, Asbestos Defense &Indemnification, Front and Back Wages for employment related claims and Employee Benefits E&O. Coverage provided by a Memorandum of Coverage and is reinsured by Great American on a "follow form" basis. This is very different than a traditional insurance policy as the JPA, not the insurance company, decides coverage and the reinsurer must follow the form and fortunes of the decision. While the coverage is incredibly broad,this may not be the most competitive premium option. Also, while not provided, we can secure options to increase the City's limits to $20M or $30M which are estimated in the $40K - $60K range. We can secure higher limits if desired and given the increasing verdicts against public agencies, please let us know if you'd like us to do so. • DIC: We were successful in negotiating a 5.21% decrease for the "All Locations Except Waste Water Treatment Plant" $5M XS $5M coverage and an 11.79% decrease for the Waste Water Treatment Plant$25M coverage. The total DIC premium savings is $41,281, resulting in a 9.2% decrease. The All Locations Except W WIP policy excludes flood at locations in 100 year flood zones,Flood Zones A,V and Shaded X. The WWIP policy excludes flood at locations in 100 year flood plain,Z500, Shaded X and B flood zone. • Airport/Aire raft Hull: The two primary carnets writing this coverage are ACE and AIG and the City has been insured through ACE since 2000. During the past year,the Palm Springs Airport enplaned passengers increased nearly 6%, total operations increased and there is an outstanding claim open. The Airport Liability renewal premium offered by ACE is a 2.49% increase though they Li"reNa 0451271 2 Keenan ..................................... 10 provided a 14.88% decrease in the Aircraft/Hull premium with no changes in terms and conditions. AIG has offered a very competitive quotation using the same limits though the Airport Liability premium is a 3.85% decrease with a $0 deductible and the Aircraft/Hull option is nearly 37% less than the expiring premium If you remain with ACE,the total premium difference for both coverages results in a slight increase of$388 from expiring and a move to AIG would result in a savings of$1,778 from expiring and$2,166 compared to ACE's renewal premium • Crime: Zurich provided flat renewal terms which were positive in spite of the highlypublicized crime losses (i.e. embezzlement) that have been occurring within public entities. • Media Perils Liability: There are very few markets writing this coverage, though we marketed this to two markets and only received a quotation from the incumbent carriers at a flat renewal. • Village Fest: The incumbent carver,Nautilus,provided a 5% ($563) renewal increase primarily due to the rates for all classes within Nautilus increasing. We tried to secure alternative quotations through specialty brokers and markets such as Houston Casualty, One Beacon, Riverport Insurance, and FL Dean,though all stated it was not possible for them to offer a completive quote. • Excess Workers Compensation There are very few markets now writing this coverage in California, particular for full service cities with police and fire departments. The City's estimated payroll increased nearly 9% from last year and the City currently has a$1 million per claim SIR and a $50 million Employer Liability limit. We received a flat renewal from the incumbent, Safety National, an option from Arch through the Municipal Insurance Cooperative as well as a$250K XS $750K "buffer layer" option from Brit Global Specialty to decrease your SIR to $750,000. The buffer layer can be procured with the Brit Excess Liability option for$42,280 or on a standalone basis for$52,600. The Municipal Insurance Cooperative option is for$100 million in limits and provides full reimbursement for 4850 benefits,though the premium is significantly higher than Safety National. • Municipal Insurance Cooperative (Excess Liability and Excess Worker's Compensation): We secured a quotation through the Municipal Insurance Cooperative as detailed in the Excess Liability and Excess Worker's Compensation sections above. This joint purchase group is managed by Keenan and Keenan is compensated through our contractual agreement through MIC. Keenan currently eams a$60,000 fee from the City as all policies are "net of commission",though with NEC,we are paid via a formula which would result in Keenan's compensation increasing to an estimated $91,587. The coverage afforded and how it's provided is broader than any document I've ever seen,though unless the City finds value in the unique coverages and lower Liability SIR,I don't recommend the City pursue this quotation for the upcoming year due to the rather significant premium difference. LimeNa 0451271 3 Keenan 11 • Cvber Liability / Data Breach: Cyber and data breach is one of the greatest risks facing public agencies today. We approached five different carriers to secure indications. One declined and to date we've received two indications,not actual quotations, as they require further information prior to a final quotation being offered. These indications are for $1M & $2M limits with premiums ranging from $12,785 to nearly $25,000. We are working to formalize quotations though for now, we recommend the City approve securing this coverage at a not-to-exceed amount of$25,000. During this past year the City's Property loss experience improved, though still represents a bit of a challenge along with the California Worker's Compensation market and emerging Liability challenges. In spite of these issues we are very pleased with this year's results. The City can essentially maintain the current levels of coverage with an overall premium decrease or enhance coverage and significantly decrease your Liability and Worker's Compensation SIRS. The City's program is very competitively priced and we look forward to discussing the different options included within our proposal in more detail. On behalf of Keenan &Associates, it is truly a privilege and honor to serve the City and we appreciate all of your support and confidence in our services. Sincerely, John Stephens Vanessa Pena Senior Vice President Sr. Account Manager P&C Public Agency Practice Leader Team Leader 7hzs pzurarxa doanrrrn is f amhed to you as a rrum 9rvfam=m far ytzrr tarn man It&6 swrrnznze the listed proposed pc1z9(i;) and is not irwA-d to ryle¢all the terra and mT&d ar or eedusiors cf such pupa edpoluy(iff) Mortnzer, dx a#bnw=armwx d in this dazrrrern robYs pryaased average as of dx effe ie diufs) of dx proposed pd y(z6)arzd db5 not ir64 suls"m o'az W This dowrxra is rar an irawarxe Pa'uY aryl ckes vat anm�' alter or eete�rl tlx average affazkd Iry tlx listed prrrpasel pdky(ie.J. The irawanx afforrhl by de listed proptaed pdky(ieJ is suljet to all dx tens, aazditiwa and ex&Giora cf sudr l0119(les). LizaaeNa 0451271 4 Keenan . 12 Cm of Palm Springs Property,Liability and Excess Workers'Compensation May 21),2015 Renewal Proposal for the 2015-2016 Program Year Option 2 Cyber Liability July 1,2015-July 1,2016 Aggregate$1,000,000 • $250k limit for Side A excess D&O with$OK SIR • $lm Limit for Network Security Liability • $12M Limit for Privacy Liability Coverage • $500,000 Limit for Privacy Breach Expense Aggregate o $250k Forensics Sublimit o $500k Credit Freeze and Thaw coverage o $500k Identity Monitoring, call center and ID restoration • $1M Limit for Regulatory Proceeding Coverage • $1M Limit for Internet Media Liability • $1M Limit for Network Extortion Threat • $1M Limit for Digital Asset Loss • $1M Limit for Business Interruption / 12 Hour waiting period • $10,000 Limit for Reward Payments Coverage $15,000 SIR $18,665.00 Annual Premium $ 597.28 Surplus Lines Taxes of 3.2/o $19,262.28 Cost $19,262.28 Cost $ 2,799.75 Less 15%commission(18,665 x.15) $16,462.53 Total Cost • Service Suite Endorsement • Access to e-Risk Hub Notice Terms & • OFAC Compliance Notice Conditions • Professional Services Exclusion Amended • Ironshore Highly Protected Information(HPI)with Notification on a Per Person& Sub-limited Basis Endorsement • Completion of Ironshore Enterprise application. • Please note that the city doesn't have a posted privacy policy on their website. Confirmation of the posting of a privacy policy within 30 days upon binding is required. 28 Keenan L'crn.re No. 0431271 Innovative Solulion.r. Endif ir7d Pvznaplee. 13