Agenda 09/27/2022 Item #16E 3 (Approve the purchase of Liability, Automobile, Cyber insurance coverage for FY 2023)09/27/2022
EXECUTIVE SUMMARY
Recommendation to approve the purchase of Liability, Automobile, Cyber, and other
miscellaneous insurance coverage for FY 2023 in the estimated premium of $932,224.
OBJECTIVE: To protect the County against financial loss from casualty related claims and
lawsuits and to comply with contractual and statutory requirements through the implementation
of a cost effective, best value Casualty Insurance program.
CONSIDERATIONS: Pursuant to Florida Statutes Section 768.28, the Risk Management
Division administers the Property Casualty Fund (Fund 516) to finance its Property, Casualty
insurance program. Claims are administered by Johns Eastern Company. Brown & Brown is the
County’s contracted broker of record.
The County purchases excess coverage to protect against catastrophic losses; to cover a cause of
action not limited by a state statutory tort cap (such as Employment Practices Liability); to
comply with contractual requirements such as grants and leases; or if a claims bill is enacted
pursuant to chapter 768.28, Fla. Statutes. The current program expires on September 30, 2022.
For the FY 2023 renewal, a Coverage & Premium Comparison Sheet is attached which
illustrates the pricing for each carrier by line of coverage and the purpose/basis of each coverage.
The significant highlights of the renewal are as follows.
• Total premium for all coverage lines increased 6.57% or $55,894. This increase is due
primarily to an increase in ratable exposures as reported in the application rather than an
increase in the rate.
• The Property Insurance program renews on April 1, 2023 and is not included in this
recommendation. Additionally, Aviation, Flood and Workers’ Compensation Insurance are
not included in this recommendation and will be submitted separately.
All carriers hold a Best’s financial rating of “A, Superior” or higher.
FISCAL IMPACT: The estimated annual premium including Pollution insurance is $981,602;
however, the Pollution insurance policy was pre-paid under a rate guarantee for three years in FY
21; thus, no premium will be due in FY 23. Therefore, the net premium for FY 23 is estimated to
be $932,224 as outlined in the Coverage & Premium Comparison Sheet. Sufficient funds have
been budgeted within Fund 516, Property and Casualty Insurance for this purchase.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated
with this item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, raises no
legal issues and requires majority vote for approval. -JAK
RECOMMENDATION: It is recommended that the Board approves the following:
16.E.3
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09/27/2022
1) The purchase of insurance coverage as outlined in the Executive Summary and the
Coverage and Premium Comparison Sheet effective October 1, 2022.
2) The rejection of Uninsured Motorist Insurance, authorizing the County Manager or
designee to execute the necessary rejection forms.
3) Authorize the County Manager or designee to complete the applications or other
documents necessary to bind coverage and services effective October 1, 2022.
Prepared by: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management Division
ATTACHMENT(S)
1. Casualty Renewal & Market Summary (DOCX)
2. Collier Co Casualty Renewal Premium Comparison 22-23 (PDF)
16.E.3
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09/27/2022
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.E.3
Doc ID: 23204
Item Summary: Recommendation to approve the purchase of Liability, Automobile, Cyber and
other miscellaneous insurance coverage for FY 2023 in the estimated premium of $932,224.
Meeting Date: 09/27/2022
Prepared by:
Title: Operations Coordinator – Risk Management
Name: Greily Gonzalez
08/30/2022 11:30 AM
Submitted by:
Title: Division Director - Risk Management – Risk Management
Name: Jeff Walker
08/30/2022 11:30 AM
Approved By:
Review:
Risk Management Jeff Walker Director Review Completed 08/30/2022 11:42 AM
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 08/30/2022 11:45 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 08/31/2022 9:37 AM
Office of Management and Budget Susan Usher Additional Reviewer Completed 08/31/2022 1:55 PM
County Manager's Office Dan Rodriguez Level 4 County Manager Review Completed 09/19/2022 2:13 PM
Board of County Commissioners Geoffrey Willig Meeting Pending 09/27/2022 9:00 AM
16.E.3
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COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS, ET AL
Casualty Insurance Program Renewal – To be Effective 10/1/2022-23
Executive Summary
Risk Management Associates, Inc., a wholly owned subsidiary of Brown & Brown, was
contracted with the County for the first time effective 1/1/2022 for the purpose of delivering
Property and Casualty Brokerage Services.
Despite a challenging insurance marketplace, we are pleased to present a favorable renewal as
outlined herein. Exhibits illustrating market conditions are provided.
Process Overview
• Casualty insurance markets approached – see responses below.
• Favorable market relationships and risk confidence revealed favorable renewal terms from
all incumbent markets
• Relatively flat rates with minimal increases due to exposure changes.
Marketing Summary
2022-2023
Excess Casualty Package
Princeton Excess & Surplus Lines Ins. Co.* Flat renewal rates offered, with premium increase based
solely on exposures changes.
Cyber
Indian Harbor Ins. Co./ AXA XL* Quoted with acceptable renewal terms and competitive
pricing given the current marketplace.
Starr Indemnity Declined – Cyber Security controls do not meet their
requirements for MFA and encryption
HCC Declined – Does not meet underwriting criteria due to the
revenues.
Travelers Declined- Falls outside of their appetite
AIG Pending Response – Minimum retention $1,000,000
16.E.3.a
Packet Pg. 1579 Attachment: Casualty Renewal & Market Summary (23204 : Approval of Liability, Automobile, Cyber, & Other Insurance for FY 2023)
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Excess Crime
Allmerica Financial Benefits Ins. Co. /
Hanover* Quoted – Incumbent
Travelers Declined – Can only provide excess 2 times primary
CNA Declined – outside underwriting guidelines
CHUBB Declined – not competitive
Terrorism & Sabotage / Active Shooter
Lloyds of London / Hiscox* Quoted - Incumbent
Indian Harbor Insurance Company / XL Quoted – Terms/limits not competitive with incumbent
Maritime Employers Liability/Excess
Atlantic Specialty Insurance Company* Quoted - Incumbent
Excess Maritime Employers Liability* Non-renewed- extensive research determined policy was
no longer applicable to the County’s exposure.
AD&D First Responders Statutory
Hartford Life & Accident Ins. Co.* Quoted – Incumbent
CHUBB Quoted – Premium higher than incumbent
AIG Quoted – Premium higher than incumbent
*Denotes Incumbent
16.E.3.a
Packet Pg. 1580 Attachment: Casualty Renewal & Market Summary (23204 : Approval of Liability, Automobile, Cyber, & Other Insurance for FY 2023)
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Insurance Market Conditions
Casualty | Q3 2022
LIABILITY MARKET STABILIZATION
The liability market is stabilizing. Rates for general
liability, including product liability, are still increasing
but at a slower pace than in past quarters. Insurers
are working to pre-negotiate early renewal terms on
their profitable customers and actively seek new
business opportunities. Loss severity continues to be
a concern across all industry classes, with insurers
focusing on risk selection and more strict
underwriting. Insurers are considering how to manage
existing exposures. Polyfluoroalkyl substances (PFAS),
also known as “forever chemicals,” are a current topic
of conversation.
Employment Practice Liability insurers remain cautious, especially with higher settlements for claims
from highly compensated employees. Large settlements are becoming more common, and underwriters
are adjusting accordingly, with many underwriters placing high-earner retentions for employees making
over a specified dollar amount for larger and middle-market organizations. In California, separate
retentions are commonly added due to claim outcomes in the state.
CHALLENGES IN COMMERCIAL AUTO
The commercial auto market continues to see an increase in frequency and severity of claims, with
insurers reporting combined average loss ratios of 110%. The same reasons continue to drive loss ratios:
distracted driving, rising medical costs and increased vehicle replacement costs. A new addition to the
list is supply chain issues, which contribute to added costs as companies wait for component parts. Risks
with few to no losses should typically expect rate increases ranging from 5-15%. It is becoming more
difficult to locate insurers for stand-alone, hired and non-owned auto coverage, as general liability
insurers are unwilling to offer coverage. Customers should have proper procedures in place, including
background checks, insurance verification protocols and a driver’s handbook.
LOWER INCREASES IN EXCESS MARKET
Like the primary liability market, the excess market appears to be stabilizing. Rates continue to increase,
but not to a historic degree. Minimum layer and policy premiums still apply and have increased over the
past years. Loss severity continues to increase. This is impacted by global and social inflation, energy,
food, housing, transportation and labor shortages, increased litigation, broader contractual
requirements, increased jury verdicts and increased settlements.
16.E.3.a
Packet Pg. 1581 Attachment: Casualty Renewal & Market Summary (23204 : Approval of Liability, Automobile, Cyber, & Other Insurance for FY 2023)
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The lead umbrella capitalizes on increases in the primary layers and generally averages a 10-15% rate
increase, compared to the 40-100%+ increases in past quarters. The excess layers attempt to follow the
lead rate, but this can often be negotiated to a lower comparable rate further up the tower.
Cyber Risk | Q3 2022
At the end of 2021, renewal premiums consistently exceeded 100% increases. Halfway through 2022,
renewals still face heavy increases of around 65%. However, these increases are notably lower than in
2021, indicating a stabilization of rates may happen in the foreseeable future.
Large buyers purchasing towers of coverage are still likely to
see higher-than-average increases, especially those who
previously experienced favorable excess pricing. Additionally,
insureds who fared well last year may now be subject to
challenging renewals as excess underwriters continue to
evaluate minimum rate requirements.
EMERGING SUB-LIMITS
Buyers lacking certain controls may face significant reductions
in ransomware coverage via sub-limits, coinsurance, higher
retentions or exclusions. However, this is still an improvement
from last year, as many applicants were flatly declined in the
past for ransomware coverage, and a small but growing
number of insurers are providing a pathway to reach full limits
mid-term. Sub-limits on ransomware commonly range
between $100k and $250k, which becomes a more significant
decrease in coverage for those who purchase multiple layers,
as most excess providers will not offer excess coverage over
ransomware sub-limits.
INCREASED UNDERWRITING SCRUTINY
Underwriters’ strategies continue to evolve, with many insurers creating new or additional applications
with more detailed questions regarding security controls. For example, insurers that previously asked if
a company had implemented multi-factor authentication (MFA) are now requesting additional details
such as what type of MFA and which MFA provider. Similarly, applications previously asked if an
endpoint detection and response tool was deployed; now, they are questioning what provider or if the
tool is on 100% of endpoints. The overall focus on underwriting standards is significant.
16.E.3.a
Packet Pg. 1582 Attachment: Casualty Renewal & Market Summary (23204 : Approval of Liability, Automobile, Cyber, & Other Insurance for FY 2023)
Covered Party:
Effective Date:
Version Date:
LIMIT DEDUCTIBLE/SIR ANNUAL
PREMIUM
LIMIT DEDUCTIBLE/SIR ANNUAL
PREMIUM
2021/2022 2022/2023
$2,447,796,500 $2,615,016,300
$ 1,000,000 $ 50,000 $ 576,264 $ 1,000,000 $ 50,000 $ 616,334 $ 167,219,800
$1,000,000 / $1,000,000 $ 50,000 $1,000,000 / $1,000,000 $ 50,000 6.83%
$1,000,000 / $1,000,000 $ 50,000 $1,000,000 / $1,000,000 $ 50,000
$5,000,000 / $10,000,000 $ 300,000 $5,000,000 / $10,000,000 $ 300,000
$1,000 / $50,000 $1,000 / $50,000
$2,000,000 / $2,000,000 $ 300,000 $2,000,000 / $2,000,000 $ 300,000 $38,032,295 $41,324,308
$ 5,000,000 $ 300,000 $ 5,000,000 $ 300,000 $ 3,292,013
$1,000 / $25,000 $1,000 / $25,000 8.66%
$5,000,000 / $10,000,000 $ 300,000 $5,000,000 / $10,000,000 $ 300,000
$5,000,000 / $5,000,000 $ 300,000 $5,000,000 / $5,000,000 $ 300,000
$ 300,000 $ -$ 300,000 $ -
$ 200,000 $ 300,000 $ 200,000 $ 300,000
$ 1,000,000 $ 100,000 $ 1,000,000 $ 100,000
$ 1,000,000 $ 100,000 $ 1,000,000 $ 100,000
$ 1,000,000 $ 100,000 $ 1,000,000 $ 100,000
$ 1,000,000 $ 100,000 $ 1,000,000 $ 100,000
$ 1,000,000 $ 100,000 $ 1,000,000 $ 100,000
$ 40,070
Sub-Total $ 576,264 Sub-Total $ 616,334 6.95%
$2,447,796,500 $2,615,016,300
$ 167,720 $ 176,000 $ 167,219,800
6.83%
$ 8,280
Sub-Total $ 167,720 Sub-Total $ 176,000 4.94%
$ 4,000,000 $ 1,000,000 $ 8,586 $ 4,000,000 $ 1,000,000 $ 8,798
$ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000
$ 4,000,000 $ 1,000,000 $ 4,000,000 $ 1,000,000
$ 4,000,000 $ 1,000,000 $ 4,000,000 $ 1,000,000
FIGA Assessment $ 77 $ 289
Sub-Total $ 8,586 Sub-Total $ 8,875 3.37%
$1,048,557,727 $1,078,828,629
$ 10,000,000 $ 63,745 $ 23,000,000 $ 69,435 $ 30,270,902
$10,000,000 / $20,000,000 $ 100,000 $10,000,000 / $20,000,000 $ 100,000 2.89%
$3,000,000 / $3,000,000 $ 100,000 $3,000,000 / $3,000,000 $ 100,000
$ 250,000 $ 100,000 $ 250,000 $ 100,000
$ 250,000 $ 100,000 $ 250,000 $ 100,000
$ 250,000 $ 100,000 $ 250,000 $ 100,000
$ 250,000 $ 100,000 $ 250,000 $ 100,000
$ 3,000,000 $ 100,000 $ 3,000,000 $ 100,000
$ 5,690
Sub-Total $ 63,745 Sub-Total $ 69,435 8.93%
Purpose
Provides coverage for liability from a data
breach; defense costs; ransomware and
mitigation/compliance costs associated
with a breach response.
Excess crime layer providing coverage for
employee dishonesty, faithful performance
by public officials and computer and funds
transfer fraud.
Terrorism is excluded from most policies.
This program covers liability arising out of
acts of foreign and domestic terrorism
otherwise excluded. Active Shooter-First
Party Coverage for Direct Physical
Damage. Third Party Coverage for Bodily
Injury and Property Damage resulting from
Malicious Attack.
Primary coverage layer providing coverage
for bodily injury, property damage,
professional acts, employment practices,
limited inverse condemnation/eminent
domain, employee dishonesty/fidelity,
automobile liability, and automobile
physical damage pursuant to FS 768.28,
Federal Statutes.
Collier County BOCC
10/1/2022
8/29/2022
Coverage & Premium Comparison
2021/2022 2022/2023 Ratable Exposures/Change
LINE OF COVERAGE
Excess Casualty Package:Revenues
Princeton Excess & Surplus Lines Ins. Co.
Auto Physical Damage Exposure
DifferenceFlood, Annual Aggregate
Earthquake, Annual Aggregate
General Liability
Medical Payments Fleet
Designated Unmanned Aircraft
Automobile Liability Exposure
DifferenceMedical Payments
Pubilc Officials / Employment Practices Liability
Physical or Sexual Abuse
Ethics Violations
Inverse Condemnation/Eminent Domain Inverse Condemnation Endorsement
provided as accomodationCrime
Employee Dishonesty
Loss Inside the Premises
Loss Outside the Premises
Money Orders & Counterfeit Paper Currency
Forgery or Alteration
Premium
Difference
Cyber Liability:Coverage Details Exempt from Public Record per
HB7057
Coverage Details Exempt from Public Record per
HB7057
Revenues
Indian Harbor Insurance Company / AXA XL
Exposure
Difference
* 2022-3 Premium is Net of Commission Premium
Difference
Excess Crime:
Allmerica Financial Benefits Ins. Co. / Hanover
Employee Dishonesty - Per Loss
Faithful Performance
Computer Fraud
Funds Transfer Fraud
Premium
Difference
Terrorism & Sabotage / Active Shooter:TIV
Underwriters at Lloyds, London / Hiscox
Aggregate Limit of Liability Exposure
DifferenceTerrorism & Sabotage Liability
Active Shooter & Malicious Attack Property & Lliability
Additional Security Measures Sublimit Received Option from XL but per
Occ limit $1MCounseling Sublimit
Public Relations Sublimit
Miscellaneous Crisis Management Expense Sublimit
Medical Payments and Funeral Expenses Sublimit
Premium
Difference
16.E.3.b
Packet Pg. 1583 Attachment: Collier Co Casualty Renewal Premium Comparison 22-23 (23204 : Approval of Liability,
Covered Party:
Effective Date:
Version Date:
LIMIT DEDUCTIBLE/SIR ANNUAL
PREMIUM
LIMIT DEDUCTIBLE/SIR ANNUAL
PREMIUM
2021/2022 2022/2023
$150,026 $116,000
$ 1,000,000 $ 10,000 $ 16,587 $ 1,000,000 $ 10,000 $ 17,500 ($ 34,026)
Included -22.68%
$ 913
Sub-Total $ 16,587 Sub-Total $ 17,500 5.50%
1,670 1,526
$ 225,000 $ -$ 18,428 $ 225,000 $ -$ 19,080 ($ 144)
$ 75,000 $ -$ 75,000 $ --8.62%
$ 75,000 $ -$ 75,000 $ -
$ 652
Sub-Total $ 18,428 Sub-Total $ 19,080 3.54%
$ 3,100,000 $ -$ 3,100,000 $ -
$ 3,300,300 $ -$ 3,300,300 $ -
Sub-Total $ 25,000 Sub-Total $ 25,000
$ 876,330 $ 932,224
$ Difference $ 55,894
% Difference 6.57%
Coverage relating to boat operations in
Coastal Zone Mangement, Parks & Reck,
Transportation Mangement Serv./ Road
Maintenance, and Pollution Control.
Purpose
Provides coverage for the liability arising
out of the operation of watercraft; injury to
crew; and injury to divers pursuant to the
Jones Act 33 U.S.C. Sec. 901.
Death benefits provided to law enforcement
officers and extended to paramedic staff
pursuant to FS 112.19.
Collier County BOCC
10/1/2022
8/29/2022
AD&D First Responders Statutory:2-Year Term - Annual Installments 2-Year Term - Annual Installments # of Employees (2020:2022)
Coverage & Premium Comparison
2021/2022 2022/2023 Ratable Exposures/Change
LINE OF COVERAGE
Maritime Employers Liability:Payroll
Atlantic Specialty Insurance Company (Non-Owned Vessels per underwriter)
Martime Employers Liability Exposure
DifferenceTerrorism
Premium
Difference
TOTAL PREMIUM
Hartford Life & Accident Insurance Co.10/1/2020 - 10/1/2022 10/1/2022 - 10/1/2024
Unlawful & Intentional Death Exposure
DifferenceIn the Line of Duty
Fresh Pursuit 2 Alt Quotes Rcvd but higher prem
Premium
Difference
Contigent Law Enforcement Professional
Florida Sheriff's Self- Insurance Fund
16.E.3.b
Packet Pg. 1584 Attachment: Collier Co Casualty Renewal Premium Comparison 22-23 (23204 : Approval of Liability,