HomeMy WebLinkAbout17 - Excess General Liability Insurance RenewalsCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 17
February 24, 2009
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Human Resources, Lauren Farley, Risk Manager, (949) 644 -3302
Ifarley @city. newport- beach.ca. us
SUBJECT: Excess General Liability Insurance Renewals
Issue:
Does the Council approve the cost of $577,189 for expiring excess general liability
insurance coverage?
Recommendation:
Approve the renewal of the excess general liability insurance coverage for a one -year
policy for $577,189 in premium.
Background:
The broker of record, Brown & Brown, was selected through a competitive bid process
in 2003, and they are in a three -year extension of their Council approved broker of
record agreement. Mark Zahoryin is our account representative with our broker and has
been associated with our insurance program during this time.
The renewal process begins approximately ninety (90) days prior to the expiration of the
insurance coverage and continues right up to the expiration of the existing coverage
(March 1St). The conclusion of the process depends on the availability of coverage in the
markets and the need for underwriters to clarify and obtain information on our
application. A ten -year history for excess general liability coverage is exhibited in the
chart below. The aftermath of the terrorist attack on the World Trade center on 9/11101
were realized in the insurance market in 2003 and resulted in a spike in premiums. The
market has continued to stabilize since that time and premiums have declined.
The City chose to maintain its March 1St renewal date allowing us the opportunity to
review the market trends of both the traditional July 1St and January 1" renewal dates of
most public agencies, providing us with a market edge in our insurance renewals.
General Liability Excess Insurance Renewals
Council Agenda — February 24, 2009
Page 2 of 4
General Liability Excess Insurance Limits and Premium History
Policy Period
Self Insured Retention
Annual Premium
(SIR) /Coverage Limits
FY 00/01
$500,0001$25 million
$ 268,000
FY 01102
$500,000/$25 million
$ 331,000
FY 02103 (6 mos. Only)
$500,0001$21 million
$ 475,997
1/1/03 to 3/1/04 (14 mos.)
$500,000/$21 million
$ 829,940
(Premium Annualized for
12 mos. is $711,377)
3/1/04 to 3/1/05
$500,000/$26 million
($1 million SIR for EPLI)
$ 799,166
3/1/05 to 3/1/06
$500,0001$26 million
($1 million SIR for EPLI)
$ 803,728
3/1/06 to 311107
$500,000/$26 million
$ 800,115
3/1/07 to 3/1/08
$500,0001$26 million
$ 675,781
311/08 to 311/09
$500,000/$50 million
$598,190
311/09 to 311110
$500,000/$50 million
$577,189
General Liability Excess Insurance Renewals
Council Agenda — February 24, 2009
Page 3 of 4
Renewal Quotation:
The quote below provides the following categories of protection: Bodily Injury, Property
Damage Liability (including Automobile liability), Errors & Omissions Liability,
Employment Practices Liability and Employee Benefit Liability.
Carrier
SIR
Coverage Limits
Premium
Travelers
$500,000
$10,000,000
$330,744
Arch Specialty
- --
$15mm x/o $10mm
$142,657
Allied World
- --
$25mm x/o $25mm
$103,788
The insurance companies chosen meet or exceed the City's minimum standards for
financial strength and solvency.
Funding Availability:
Funds which cover the recommended expenditure are in the Internal Services Budget —
Insurance Reserve Fund 6020 -8720 — General Liability Excess. The renewal premium
of $577,189 is lower than the expiring premium of $598,190 and is 89% of the budgeted
amount of $650,000 in the FY 08/09 budget.
Prepared by:
Sheri Anderson, Sr. HR Analyst
Submitted by:
jaxtbe6 --- ? X
Terri L. Cassidy, HR Director
Lauren
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