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Home My WebLink About2006-06-21 STAFF REPORTS 2H O�ppLMSp �2 V N t a 4 A �04nORniEo %A� c44/FOR City Council Staff Report DATE: June 21, 2006 Consent SUBJECT: Insurance Renewals for the City's Airport Liability, Aero Squadron Aircraft, All-Risk Property, Earthquake/Flood (Primary Level), Crime, Boiler & Machinery, Excess General Liability, Auto Physical Damage (CaLease) Insurance, and Excess Workers' Compensation FROM: David H. Ready, City Manager BY: Assistant City Manager, Administrative Services SUMMARY Annually, the City purchases various lines of insurance coverage to minimize the adverse effects of accidental losses. The City's insurance broker, Davis & Graeber Insurance Services, has provided renewal quotations for fiscal year 2006-07 coverage. Staff is requesting City Council approval of the Insurance Portfolio Renewal effective July 1, 2006. RECOMMENDATION: Adopt Minute Order No. , "APPROVING THE CITY OF PALM SPRINGS' INSURANCE RENEWALS FOR THE CITY'S AIRPORT LIABILITY, AERO SQUADRON AIRCRAFT, ALL-RISK PROPERTY, EARTHQUAKE/FLOOD (PRIMARY LEVEL), CRIME, BOILER & MACHINERY, GENERAL LIABILITY, AUTO PHYSCAL DAMAGE (CALEASE), AND EXCESS WORKERS' COMPENSATION EFFECTIVE JULY 1, 2006. STAFF ANALYSIS: The City is self-insured for major risk programs, such as 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 including, general liability, automotive, property and excess workers' compensation insurance. To assist in the purchase of various lines of insurance, the City has contracted with Davis & Graeber Insurance Services. As the City's Insurance Broker of Record, Davis & Graeber is responsible for administering our insurance portfolio, including soliciting insurance proposals from qualified carriers each year. Item No. n . H . City Council Staff Report June 21, 2005--Page 2 Annual Insurance Renewals The following is a summary of last year's premiums, and staff's recommendation for the July 1 renewals (based on the lowest quoted price and coverage): Coverage Premium 711/05 through 6/30106 Premium 7/1/06 through 6/30/07 Quake/Flood Premium $118,113 $192,250 Primary Level Terrorism Premium See All-Risk Premium Below See All-Risk Premium Below Deductible 5% of Values/$50,000 Minimum 5% of Values/$50,000 Minimum Limits $2,500,000 $2,500,000 All-Risk Property Premium $170,738 $155,589 Terrorism Premium $11,913 $12,000 Loss Control Audit Fee $2,000 $2,000 Deductible $10,000 $10,000 Property Schedule Values $241,000,000 $284,103,346 Airport Liability Premium $50,412 $54,933 Deductible $1,000 $1,000 Limits $50,000,000 $50,000,000 Boiler & Machinery Premium Coverage is included in All-Risk Coverage is included in All-Risk and Quake/Flood Premiums and Quake/Flood Premiums Deductible $10,000 $10,000 Limits Crime Premium $4,198 $3,358 Deductible Employee Theft$10,000 $10,000 All Other$1,000 $1,000 Limits $1,000,000 $1,000,000 Aero Squadron Premium (Cessna 182P) $5,893 $6,501 War Coverage Option $918 $1,159.00 Deductible $500 $500 Limits $5,000,000 $5,000,000 General Liability Premium $202,831 $191,760 Self-Insured Retention $800,000 Employment Practices $800,000 Employment Practices $400,000 All Other $400,000 All Other Limits $10,000,000 $10,000,000 Auto Physical Damage Premium $8,345 $8,762 Deductible $5,000 $5,000 Limits CaLease Schedule $2,086,166 $2,086,166 Excess Workers' Compensation $231,560 $271,779 SIR (self-insured retention): Police & Fire employees $2,000,000 $2,000,000 All other employees $1,000,000 $1,000,000 Limits $25,000,000 each $25,000,000 each accident/disease accident/disease Total Premiums $806,003 $898,932 The: renewals reflect an overall increase of 10% over last year's premiums. This increase is primarily due to the addition of terrorism coverage, which was not offered last year, and an increase in property values. Although the property insurance premium decreased by 10% over last year, the premium for Quake/Flood insurance increased by 38.5%. The: Quake/Flood, All-Risk Property, and Boiler & Machinery quote is offered by Affiliated FM as one policy. The premium amount reflects terrorism coverage for both City Council Staff Report June 21, 2005--Page 3 Annual Insurance Renewals certified and non-certified terrorism, which was not offered last year. Certified terrorism includes international instigated terrorism acts that are certified by the Secretary of the Treasury of the United States that take place within the territory of the United States. Non-Certified Terrorism includes events that occur in the United States when committed by Individuals acting on behalf of foreign people or interests. The: Airport Liability quote provides for optional War & Terrorism coverage for an additional $37,500, This policy is limited to losses at City-owned property and does not cover revenues losses from terrorist attacks occurring elsewhere. As a result, staff is not recommending the War & Terrorism coverage as part of the insurance renewal. FISCAL IMPACT: This is a budgeted expense. Sufficient funds are available in the Risk Management insurance premium accounts (5904) 48640 (General Liability Insurance), 48665 (Aircraft Liability), 48670 (Crime/Fidelity Insurance), 48675 (Airport Liability), and (5905) 48651 (CaLease Insurance) 48655 (Earthquake Insurance), 48690 (Property Insurance) and (5903) 48410 (Workers' Compensation). (T y L. But a David H. Ready, i aer ss�tant Ci ager, Admin Services Attachments: 1. Insurance Proposal from Davis & Graeber 2. Minute Order MINUTE ORDER NO. APPROVING THE CITY OF PALM SPRINGS' INSURANCE RENEWALS FOR THE CITY'S AIRPORT LIABILITY, AERO SQUADRON AIRCRAFT, ALL-RISK PROPERTY, EARTHQUAKE/FLOOD (PRIMARY LEVEL), CRIME, BOILER & MACHINERY, GENERAL LIABILITY, AUTO PHYSICAL DAMAGE (CALEASE), AND EXCESS WORKERS' COMPENSATION EFFECTIVE JULY 1, 2006. I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this Minute Order approving the City of Palm Springs' Airport Liability, Aero Squadron Aircraft, All-Risk Property, Earthquake/Flood (Primary Level), Crime, Boiler & Machinery, General Liability, Auto Physical Damage (CaLease), and Excess Workers' Compensation renewals, effective July 1, 2006, in an amount not to exceed $898,932.00, was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 215t day of June, 2006. James Thompson, City Clerk Insurance Proposal for 0 ,. ij v of Palm Springs June 5, 2006 By Ross B. Jones Vice President Commercial Marketing Davis & Graeber Insurance Services, Inc. 470 E. Highland Avenue P.O. Box 750 Redlands, CA 92373 (909) 793-2373 Property All Risk Named Insured: City of Palm Springs Policy Term: July 1, 2006 to July 1, 2007 Insurance Carrier: Affiliated FM Insurance Company (A+XV) Admitted Coverage: All Risk, as defined and limited herein, on Real Property, Personal Property, Extra Expense, Rental Income, Gross Earnings excluding Ordinary Payroll and including Extensions of Coverage applying at the following locations on schedule with Company. Limit: $241,000.00 This Company's total limit will not exceed the respective Limits of Liability shown elsewhere for coverage involved. However in no event will the limit exceed$241,000.00 as a result of any one loss, disaster or occurrence, regardless of the number of perils, coverages or locations involved. Sub-limit: Earth Movement: $2,500,000 Annual Aggregate Flood: $2,500,000 Annual Aggregate Off Premises Power: $1,000,000 Extra Expense: $2,000,000 Ammonia Contamination (B&M) $250,000 Hazardous Substance (B&M) $250,000 Spoilage (B&M) $250,000 Deductible: The following deductible amounts shall apply to each claim for loss or damage under this Policy in the respective loss categories indicated: 1. Earth Movement: For each occurrence,this company will not be liable for loss or damage to insured property unless the amount of the loss or damage exceeds 5%of the combined value of property at the location where loss or damage occurs, in accordance with the valuation section of this policy and amoral business interruption value as defined in the Business Interruption Endorsement attached to this policy at the time such loss or damage at the location where loss occurs, subject to a minium deductible amount of$50,000 per location. If coverage is provided for more than one location,this deductible percentage or minimn deductible amount will be calculated for and applied separately to each location. 2. $100,000 Flood(per occurrence for all coverages provided in this policy). 3. Off Premises Power Qualifying Period In the event of loss or damage covered by this policy,no coverage is provided unless the period of interruption exceeds 24 hours beginning from the time of loss. If the period of interruption exceeds 24 hours,the loss will be calculated from the original time of loss,subject to the policy deductible. 4. $5,000 Electronic data Processing,no coverage is provided unless the period of interruption exceeds 48 horns. 5. $10,000 All Other Losses Special Conditions: The following forms will be attached at policy issuance: 1.Excludes Crime,Boiler&Machinery and all third party liability coverages. 2.EQSL is included to policy limits,with a 1%deductible of value of property per location 3. Sewer Back-up included. Debris removal$5,000,000 or 25%of loss 4. EDP Equipment included under Personal Property(includes electrical/mechanical breakdown) 5.Newly acquired property(120 days) Affiliated FM is available to assist the insured in completing recommendations for risk improvement developed as a result of inspections on this account.For more details and assistance,the insured can contact Account Engineer Farrell Fatemi at 818-227-2289. Annual Premium: $3479839.00 *Certified Terrorism premium: $8,000.00 Inspection Fee: $2,000.00 *Non-Certified Terrorism: $4,000.00 Total Annual Premium: $361,839.00 Including Certified & Non Certified Terrorism $349,839.00 Without terrorism included Breakdown of Premium: Property Premium: $1559589.00 DIC & Flood $2,500,000 Primary $192,250.00 Rate 2006: $76,900.00 per mil Rate 2005: $47,245.20 per mil *Certified Terrorism: International instigated terrorism acts that are certified by the Secretary of the Treasury of the United States that take place within the territory of the United States. *Non Certified Terrorism:Events that occur in the United States when committed by individuals acting on behalf of foreign people or interests. Marketing Summary: Carriers: 1. Axis-pending 2. Traders & Pacific - can only look at 10 mil primary at this time 3. Essex- pending 4. Allianz-not interested in competing with Affiliated 5. United States Fire - pending 6. Travelers - declined due to current pricing and quake 7. Arch - pending 8. Landmark- not competitive 9. Westchester -pending 10. Chubb - pending 11. AIG - pending 12. Affiliated FM Pending markets may quote by expiration date. Airport Liability Named Insured: City of Palm Springs Palm Springs International Airport and all other airport premises necessary and/or incidental to the operations of the Named Insured. Policy Term: July 1, 2006 to July 1, 2007 Insurance Carrier: Ace USA/WEST Westchester Fire (A+IX) Admitted Coverage: Special Airport Liability Deductible: $1,000.00 Each Loss Limits: Bodily Injury &Property Damage $50,000,000 CSL each aircraftloccurrence and in the aggregate with respect to: Products/Completed Operations $50,000,000 aggregate Personal/Advertising Injury $50,000,000 aggregate Airport Premises $50,000,000 Ground Hangarkeepers $50,000,000 Any one occurrence/aircraft Premises Medical $5,000/person/$25,000 Per occurrence Independent Contractors $50,000,000 Incidental Control Tower Liability $50,000,000 Airshow Liability $1,000,000 primary excess of contractor $5,000,000 aggregate Mobile Equipment on airport premises $50,000,000 Excess auto liability off airport premises $1,000,000/$50,000,OOOFire Legal Liability $100,000 each occurrence Contractual Liability $50,000,000 Non Owned Aircraft Liability $50,000,000 Medical Malpractice Liability $50,000,000 aggregate War and Associated Perils Excluded Notice of Cancellation—90 days/10 for non payment Contingent Liquor Liability $50,000,000 Additional Insureds as requiredIncluded Excess Employers Liability $1,000,000 any one accident/$50,000,000 occurrence Date Exclusion & Limited Writeback Included Passenger Misdirection Included Goods, Merchandise & Baggage other than as bailee for hire- Included Premium: $52,412. Taxes & Fees $ 2,521. Total $549933. War & Terrorism Coverage: $37,500 Crime Bond Named Insured: City of Palm Springs Policy Term: July 1,2006 to July 1, 2007 Insurance Carrier: Hartford Fire Insurance Company (A+ IX) Admitted Coverage Form: Crime Shield Limits: Public Employee Dishonesty per Employee: Limit Coverage Deductible $1,000,000 Employee Theft $10,000 $100,000 Forgery $1,000 $300,000 Theft, Disappearance & Destruction - In & Out$1,000 $50,000 Counterfeit Currency & Money Orders (No ded) Premium: $ 3,358.00 Annual Payment (3 - year fixed rate 2004 to 2007 ) Aircraft Liability Named Insured: City of Palm Springs Policy Term: July 1, 2006 to July 1, 2007 Insurance Carrier: Ace USA/WEST Westchester Fire (A+IX) Admitted Coverages: 1974 Cessna 182P N47PS Hull $75,000 Deductible: In Motion $500 Not In Motion $100 Limit of Liability: $5,000,000 Combined Single Limit Territory: USA, Canada, Mexico, Excludes Alaska Use: Business & Pleasure Pilots: Any properly certified pilot approved by the Named Insured's Chief Pilot Personal Injury: $5,000,0001 aggregate Automatic Attachment of Newly Acquired Aircraft, Temporary Use of Substitute Aircraft Spare Parts $10,000 Deductible: $250 each claim Non-Owned Aircraft Liability $5,000,000 Damage to Non-Owned Hangars and Contents $15,000 Aviation Products Liability for sale of aircraft, aircraft parts, maintenance, fuel, oil, equipment& services Independent Contractors Liability $5,000,000 Contractual Liability $5,000,000 Runway Foaming $5,000 Search & Rescue $5,000 Physical Damage to Non-Owned Aircraft $50,000 Deductible $1,000 Medical Payments $1,000/$4,000 Personal Effects/Baggage $1,000 each person Notice of Cancellation 60 days Non-Payment 10 days Date Exclusion & Writeback Annual Premium: $6,114.00 without War or Terrorism coverage War & Terr. Coverage: $1,159.00 Taxes & Fees $ 386.50 $7,660.00 Total Annual with War& Terr. Coverage Public Entity Excess Liability Named Insured: City of Palm Springs Policy Term: July 1, 2006 to July 1, 2007 Insurance Carrier: Everest Indemnity (A+XV) Admitted Coverages: Special Excess Liability for Public Entities Limits: $10,000,000 Products & Completed Operations Hazard Aggregate $10,000,000 Errors & Omissions Liability Aggregate, other than Personal Injury Offense Wrongful Acts $10,000,000 Employee Benefit]Liability Aggregate $10,000,000 Any One Occurrence or Wrongful Act in Excess of Retained Limit Deductibles/ $400,000 SIR each Occurrence All other coverages. Retained ]Limits: $800,000 SIR each Employment Practices Liability. Conditions: Act of Terrorism Retained Amount Endorsement including coverage for terrorism. Time Element Pollution Endorsement Premium Adjustment Endorsement 90 Days Notice of Cancellation, except for Non-Payment of Premium. Subject to: Claims audit to be performed during the year. Limits of Insurance Amendatory Endorsement Policy Territory Limitation Endorsement Retained Amount Endorsement Uninsured/Underinsured Motorist Exclusion Blanket Additional Insured Premium: $191,760.00 (Rate: Adjusted at a rate of $4,1110 per capita based on a estimated population of 45,731.) 25% Minium Earned Premium in event of Cancellation Alternate Quote: Insurance Company of the State of Pennsylvania (A++XV) Admitted Estimated Annual Premium: $191,760 ($188,000 plus $3,760 Terriorism) INSURANCE QUOTATION CALIFORNIA AUTOMOBILE PHYSICAL DAMAGE PROGRAM Account Name: City of Palm Springs Mailing Address: 3200 E. Tahquitz Canyon Way, Palm Springs, CA 92262 Policy Term: 7/l/06 to 7/1/07 Coverage/Limits/Deductible: Coverage: Automobile/Mobile Equipment Physical Damage Including Comprehensive and Collision Limit(s): Values Reported—6 vehicles $2,086,166 (Per Schedule on File) Deductible: $5,000 $10,000 Annual Premium: $8,762 $8,345 Commission to Aon: 16.5% ]Instructions to Company: _Bind Coverage ($5,000 or$10,000 option) With Date: Authorized Representative: Excess Workers Compensation Named Insured: City of Palm Springs Policy Term: July 1, 2006 to July 1, 2007 Insurance Carrier: National Union Fire Insurance Co (A++XV) Admitted Coverages: Specific Excess Workers Compensation Limits: $25,000,000 Limit Each Accident& Disease $1,000,000 Employers Liability Each Accident $2,000,000 Retention Each Accident& Disease, Emp Liab. - Police & Fire $1,000,000 Retention Each Accident& Disease, Emp. Liab. All Others Conditions: Covered States: California Coverage is subject to any state required endorsements, plus 54361; AIGCS Claims Audit with large losses in excess of$112,500 Premium: $271,779.00 (Rate: Adjusted at a rate of$.9699 per$100 of payroll on estimated payroll of$27,471,984.) CIGA Fee: $5,329.00 included Estimated Annual Premium: $271,779.00 Terrorism: Included in premium Alternate Quote: SIR $2,0009000 All Employees Premium: $252,809.00 (Rate: Adjusted at a rate of$.9022 per$100 of payroll on estimated payroll of$27,471,984.) CIGA Fee: $4,957.00 Included Estimated Annual Premium: $2529809.00