Agenda 03/25/2025 Item #11B (Approve the purchase of Property, Boiler & Machinery, Terrorism, and Watercraft Hull Insurance effective April 1, 2025)3/25/2025
Item # 11.B
ID# 2025-886
Executive Summary
Recommendation to approve the purchase of Property, Boiler & Machinery, Terrorism, and Watercraft Hull
Insurance effective April 1, 2025, for an estimated amount of $8,705,823.
OBJECTIVE: To purchase property and property-related insurance to protect the County’s real and personal property
assets against losses caused by natural and man-made perils and to comply with the Stafford Act.
CONSIDERATIONS: The Board of Commissioners maintains a property insurance program in accordance with
Section 311 (42 U.S.C. 5154) of the Stafford Act which requires that an applicant for FEMA assistance “shall comply
with regulations prescribed by the President to assure that, with respect to any property to be replaced, restored,
repaired, or constructed with such assistance, such types and extent of insurance will be obtained and maintained as may
be reasonably available, adequate, and necessary, to protect against future loss to such property.”
The current property insurance program expires on April 1, 2025, and contains the following provisions:
• Total insured values are $1,407,748,220. The total limit of coverage purchased, also known as a Loss Limit is
$75,000,000.
• The named windstorm deductible is 5% per building and contents with a minimum named storm deductible of
$250,000. For all other perils, the deductible is $100,000 per occurrence.
• Primary flood coverage is purchased through the National Flood Insurance Program (NFIP) on properties in
special flood hazard zones. The property insurance program provides an additional $75,000,000 of flood
coverage over the NFIP coverage of $500,000 per building and $500,000 per content maximum.
• Covered perils are written on an “All Risk of Loss” basis. Loss valuation is on a replacement cost basis.
Due to supply chain and inflationary impacts to materials and labor costs, property asset valuations continue to be of
concern to property underwriters in 2025. To address this concern the following change was implemented:
• A value increase of 2.66% was applied. This increased total insured values to $1,445,187,628 and reflects the
addition of a newly constructed facility.
Although total insured values are $1,445,187,628, it is unlikely that the County will suffer a total loss. Therefore, the
county purchases what is known as a “loss limit” that is commensurate with the probable maximum loss (PML) for a
100-year wind event. A PML study is completed for the underwriters by Risk Management Solutions, Inc. to determine
the appropriate loss limit to purchase. For FY 2025, the PML is $106,557,369 for a 100-year wind event. Staff
recommends that the County purchases a $90,000,000 loss limit.
The commercial property insurance and reinsurance marketplaces stabilized in 2024 due to positive underwriting results
underpinned by previous years’ discipline in capacity deployment, risk pricing, and attachment point selection. In the
first quarter of 2025, primary carriers are anticipated to be selective while trying to meet growth objectives. Moderate to
noticeable competition will continue for accounts with favorable loss histories, good loss mitigation programs, and low
exposure to catastrophic risks, such as wind, hail, named storms or wildfires. The projected decrease for the 2025
renewal is 6.47%.
To market the program, the County’s broker, Brown & Brown, approached forty-three (43) carriers for proposals. In the
current marketplace, it is greatly advantageous to negotiate premiums and coverage terms up to the expiration date.
Therefore, at the time of this submission, terms and conditions of the property renewal have not been finalized.
Coverage will be negotiated up to the April 1, 2025, renewal date. The 2025/2026 property and total premiums are
provided as not-to-exceed (NTE) premium costs.
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3/25/2025
Item # 11.B
ID# 2025-886
The projected renewal comparison for FY 2025 is illustrated below:
• Total Insured Values increased by 2.66%.
• The property insurance rate per $100 decreased by 9%.
• The property limit increased by 20% for a total loss limit of $90,000,000.
• The overall program cost decreased 6.47% or $601,892.
In terms of financial stability, each of the carriers possesses a minimum Best’s rating of A- or higher.
This item is consistent with the Collier County strategic plan objective to prepare for the impacts of natural disasters on
our critical infrastructure and natural resources.
2024/2025 2025/2026 Difference
LINE OF COVERAGE ANNUAL PREMIUM ESTIMATED
ANNUAL
PREMIUM
$ %
Property: $9,206,054 $8,602,434 ($603,620) -6.56%
Boiler & Machinery: $59,518 $61,097 $1,580 2.65%
Terrorism: $32,117 $32,968 $851 2.65%
Watercraft Hull: $10,027 $9,324 ($703) -7.01%
TOTAL PREMIUM* $9,307,715 $8,705,823 ($601,892) -
6.47%
FISCAL IMPACT: Based upon the current Schedule of Values, the estimated annual premium for all programs is
$8,705,823. The broker and staff will continue to pursue options to lower the cost of the program prior to the April 1,
2025, effective date. Funds are budgeted and available in Fund 5016 (Property and Casualty Insurance Fund) 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
RECOMMENDATIONS: To approve the purchase of Property, Boiler & Machinery, Terrorism and Watercraft Hull
insurance as outlined in the Executive Summary and authorize the County Manager or designee to complete any
applications or other documents necessary to bind coverage and services for a one-year period effective April 1, 2025.
PREPARED BY: Prepared by: Michael K. Quigley, RMPE, Division Director, Risk Management
Page 746 of 5415
3/25/2025
Item # 11.B
ID# 2025-886
ATTACHMENTS:
1. Collier Co Prop Prem Comp 25-26
2. Collier 4-1 BOCC Agenda Backup Prop Insurance 3-6-25 - Final
Page 747 of 5415
Insured: Collier County Board of County Commissioners, et al*
Effective Date:4/1/2025
Version Date: 3/7/2025
Insurance Coverage & Premium Comparison
4/1/2024-2025 4/1/2025-2026 Changes in Exposures
LINE OF COVERAGE LIMIT DEDUCTIBLE/SIR ANNUAL
PREMIUM LIMIT DEDUCTIBLE/SIR ANNUAL
PREMIUM 2024/2025 2025/2026
Master Property:Various Carriers - Lloyds of London is the Lead Carrier Various Carriers - Lloyds of London is the Lead Carrier TIV
Layered Property Program $1,407,748,220 $1,445,187,628
TIV:$1,407,748,220 $1,445,187,628 Exposure Difference $37,439,408
All Other Perils Limit $75,000,000 $100,000 $9,203,416.00 $90,000,000 $100,000 $8,600,000.00 2.66%
Sublimits:
Flood - Annual Aggregate $75,000,000
Excess NFIP - Flood in 100 Year Hazard;
$100,000 - Other Flood, Per Occurrence $90,000,000
Excess NFIP - Flood in 100 Year Hazard;
$100,000 - Other Flood, Per Occurrence
Earth Movement - Annual Aggregate $75,000,000 $100,000 $90,000,000 $100,000 Building Values Trended by 2%Named Windstorm $75,000,000 5% Named Storm Per Unit, $250,000 Min $90,000,000 5% Named Storm Per Unit, $250,000 Min
Extra Expense $25,000,000 $25,000,000
Business Income $2,500,000 $2,500,000
Errors & Omissions $10,000,000 $10,000,000
Demolition & Increased Cost of Construction $50,000,000 $50,000,000
Vehicle Physical Damage $7,500,000 $7,500,000
Contingent Busines Income Not Covered Not Covered 24/25 Rate $0.6540
Debris Removal for Scheduled Locations $10,000,000 $10,000,000 25/26 Rate $0.5951
Contractors Equipment $5,000,000 $5,000,000
Leased or Rented Contractor's Equipment $1,000,000 $1,000,000 Rate Difference $(0.0589)
Roadways, pavements and driveways $1,000,000 $1,000,000 -9.00%
5% Insurable Margin Clause Annually No premium adjustment unless 5% difference Annually No premium adjustment unless 5% difference
Fees $2,638.00 Fees $2,434.00 Premium Difference $(603,620.00)
$9,206,054.00 $8,602,434.00 -6.56%
Terrorism & Sabotage:TIV
Lloyds of London (Hiscox)$1,407,748,220 $1,445,187,628
Terrorism Property Per Occurrence/Aggregate $75,000,000 $10,000 $32,017.00 $75,000,000 $10,000 $32,868.00 Exposure Difference $37,439,408
Business Interruption $25,000,000 $10,000 $25,000,000 $10,000 2.66%
Debris Removal Expense $25,000,000 $10,000 $25,000,000 $10,000
Demolition & Increased Cost of Construction $50,000,000 $10,000 $50,000,000 $10,000 24/25 Rate $0.0023
Errors & Omissions $10,000,000 $10,000 $10,000,000 $10,000 25/26 Rate $0.0023
Newly Acquired Locations (90 Days)$50,000,000 $10,000 $50,000,000 $10,000
Policy Fee $100.00 Policy Fee $100.00 Premium Difference $851.00
Sub-Total $32,117.00 Sub-Total $32,968.00 2.65%
Boiler & Machinery:TIV
Hartford Steam Boiler (Munich Re)Pending Written Quote $1,407,748,220
Equipment Breakdown $75,000,000 $25,000 Except:
$40/KW $50,000 Min for ICE/Gen Units
$58,928.00 $75,000,000 $25,000 Except:
$40/KW $50,000 Min for ICE/Gen Units
$61,096.92 Exposure Difference $(1,407,748,220)
Property Damage Included Included -100.00%
Business Income $3,700,000 24 Hours $3,700,000 24 Hours
Newly Acquired Locations (90 Days)$1,000,000 $1,000,000 24/25 Rate $0.00423
Service Interruption $5,000,000 $5,000,000 25/26 Rate #DIV/0!
FIGA Assessment $589.28 FIGA Assessment Included?Premium Difference $1,579.64
Sub-Total $59,517.28 Sub-Total $61,096.92 2.65%
Watercraft Hull:Coverage Applies Per Schedule Coverage Applies Per Schedule TIV
Great American Insurance Company Great American Insurance Company Great American Insurance Company $463,310 $463,313
Per Vessel $463,310 $500 or $1,000 (per schedule) / $10,000 Wind $10,027.00 $463,309 $500 or $1,000 (per schedule) / $10,000 Wind $9,324.00 Exposure Difference $3
Navigatable Waters Intercoastal Waters of Collier & Lee Counties not to exceed 100 miles offshore Intercoastal Waters of Collier & Lee Counties not to exceed 100 miles offshore 0.00%
24/25 Rate $2.1642
25/26 Rate $2.0125
Premium Difference $(703.00)
Sub-Total $10,027.00 Sub-Total $9,324.00 -7.01%
TOTAL PREMIUM 23-24 $9,307,715.28 TOTAL PREMIUM 24-25 $8,705,822.92 $(601,892.36)-6.47%
This proposal is intended to give a brief overview. Higher limits may be available. Please refer to coverage forms for complete details regarding definition of terms, exclusions and limitations.Page 1of 1
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COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS, ET AL
Property Insurance Program Renewal – To be Effective 4/1/2025-26
Executive Summary
The County’s four (4) property related programs will renew effective April 1, 2025-26:
•Master Layered Property Program
•Terrorism and Sabotage
•Boiler & Machinery
•Watercraft Hull
The 1st Quarter 2025 insurance market has stabilized, including a loosening of the 2023-4 hard
reinsurance market following Hurricane IAN. Below is an overview of our process, strategy and
financial results to achieve favorable results for these insurance renewals for Collier County.
Financial Results
In the current marketplace it is greatly advantageous to negotiate premiums and coverage terms
up to the expiration date. Therefore, at the time of submitting this backup information for the
Board of Commissioners Agenda, terms and conditions of the Property renewal have not been
finalized. Quotes have been received for the other three lines of insurance. The below
2025/2026 Property and Total Premiums are provided as Not To Exceed (NTE) Premium costs.
2024/2025 2025/2026 Difference
LINE OF COVERAGE BOUND ANNUAL
PREMIUM
ESTIMATED ANNUAL
PREMIUM $%
Property $90M Limit $9,206,054 $8,602,434 ($603,620)-6.56%
Boiler & Machinery $59,518 $61,097 $1,580 2.65%
Terrorism $32,117 $32,968 $851 2.65%
Watercraft Hull $10,027 $9,324 ($703)-7.01%
TOTAL NTE PREMIUM $9,307,715 $8,705,823 ($601,892)-6.47%
**Watercraft premium to change due to new addition
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We are pleased to deliver an overall RATE DECREASE of 9% ($603,620 PREMIUM SAVINGS) while
increasing the property limits by 20% from $75,000,000 limit to $90,000,000. The Watercraft Hull
saw a RATE DECREASE of 7%, while the Boiler & Machinery and Terrorism policies are presented
with a flat rate.
Due to favorable and competitive market conditions, the County has the option to purchase
additional limits to increase the overall property coverage . The total ‘Not to Exceed’ value in the
chart above uses the $90M Limit for budgeting purposes. Additional savings may be realized by
purchasing the lower limits.
Coverage Updates and Options
➢Changes in coverage terms and conditions include but are not limited to:
o Request for maximum concurrency of coverage terms of participating insurers
o Lift Station sublimits amended to broaden property damage coverage by
removing Extra Expense limitation within sublimit.
▪Policy Extra Expense limit ($25M) will apply to all damaged assets,
including lift stations (not included in below sublimits):
▪2025-26 Sublimit Verbiage: “Master Lift Stations Property Damage as per
Schedule:
•USD 114,384,000”
▪2025-26 Sublimit Verbiage: “Unscheduled Standard Lift Stations, Pump
Stations, and Well Sites Property Damage:
•USD 20,000,000”
Insured Asset Valuation Strategy
Property Asset Valuations continue to be of concern to Property underwriters in 2025 due to
supply chain and inflationary impacts to materials and labor costs.
Therefore, we have worked with County Risk Management to provide thoughtful valuation
trends to the Property Schedule the past 3 years. Strategies to update to current Replacement
Values the past 3 years:
2023 (overall increase in insured values 11.14%):
•TIV Bound - $1,198,418,210
•Increase overall values by 11.2% for standard construction type structures to
meet minimum cost per SF
•Percentage Trend increase of 10% for WWTP/WTP locations
2024 (overall increase in insured values 17.47%):
•TIV Bound - $1,407,748,220
•Building Valuation Trend of 8%
•Revaluation of Lift Stations (significant Ian claims)
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2025 (overall increase in insured values 2.66%):
•TIV Quoted - $1,445,187,628
•Due to ease of inflationary pressures, trend of 2% for all Building structures
•Add new Pelican Bay Maintenance Facility
In addition, updates to the County’s property/asset schedule, such as deleting demolished or sold
properties, adding newly constructed buildings and CIP updates, are collected throughout the
year. It is important to note a significant coverage extension provides for the addition of assets
of up to 5% of the Total Values with no additional premium during the policy period.
Hurricane Claims History
➢Hurricane Milton
o Claim closed, no payment (damages below deductible)
➢Hurricane Helene
o Claim closed, no payment (damages below deductible)
➢Hurricane IAN
o Estimated $23.5M insurance loss as of 2/12/2025
o Over $18M in losses resulting from Lift Stations
➢Hurricane IRMA
o $20m loss paid by insurance
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AIR & RMS Model Results
Named Storm/Hurricane/Storm Surge/Flood Predictions
•2023 RMS 100 YR PML = $79M
•2024 v21 RMS 100 YR PML = $99M
•2025 v21 RMS 100 YR PML = $104M
•2025 v23 RMS 100 YR PML = $128M
•2025 TSv10 AIR 100 YR PML = $175M
2025 RMS v21 Results
Return Period
(Years)
Collier (USD)
Gross Loss AEP
Collier (USD)
Ground Up Loss AEP
10,000 601,310,870.43 648,955,182.82
5,000 494,506,106.94 538,900,203.96
1,000 292,144,451.30 328,150,823.81
500 228,947,940.59 261,843,182.76
250 173,422,118.71 203,065,897.19
200 156,615,697.56 185,100,006.13
100 106,557,368.63 130,621,001.07
50 61,922,789.96 81,276,405.80
25 26,698,956.03 39,297,982.51
10 1,707,382.48 5,381,723.79
5 12,321.56 96,737.90
2 0 0
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Risk Exposure Analysis
Number of Insured Units by location
Exposed Values by location
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Property Marketing Summary
We approach the international marketplace to negotiate the best quotes for coverage and premium.
Insurance companies approached to provide quotes include:
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2025-2026 DRAFT Property Participation Structure
2024-2025 Property Participation Structure
**NOT TO SCALE
$90M
$75M
$50M
$25M
$15,000,000 part of $15,000,000 Excess of $75,000,000
Carrier Participation TBD
6.6666667%
or
$5,000,000
part of
$75,000,000
PRIMARY
StarStone
2.5% or
$1,875,000
part of
$75,000,000
PRIMARY
Beazley
6% or
$4,500,000
part of
$75,000,000
PRIMARY
RSUI/
Landmark
10% or
$5,000,000
part of
$50,000,000
Primary
Lexington
12.95% or $3,237,000 p/o $25M
Excess $25M
Ll oyds (Ark, KI & LECTIO )
10% or $2,500,000 part
of $25,000,000 Primary
Westchester
10% or $2,500,000 part
of $25,000,000 Primary
Everest
10% or
$2,500,000
part of
$25M
Excess
$50M
Sompo/
Endurance
12.95% or $3,237,500 part of $25M
Excess $50M
Lloyds (HCC, Equinox, LECTIO)7.05% or
$3,525,000
p/o $50M
Excess
$25M
Lloyds (HCC
& LECTIO )
12% or
$9,000,000
part of
$75,000,000
PRIMARY
Ll oyds
(AxaXL,
AFB)
35.2% or $26,400,000 part of
$75,000,000 PRIMARY
Lloyds
(BRIT lead)
7.6333333%
or
$5,725,000
part of
$75,000,000
PRIMARY
Lloyds
(WBC)
$75M
$50M
$25M
5% or
$3,750,000
part of
$75,000,000
PRIMARY
Lloyds
(Argo)
10% or
$2,500,000
part of
$25M
Excess
$50M
Sompo/
Endurance
10% or
$2,500,000
part of
$25M
Excess
$50M
Kinsale
5.25% or
$3,937,500
part of
$75,000,000
PRIMARY
Lloyds (GIC)
10% or $2,500,000 part
of $25,000,000 Primary
Berkshire/ National Fire
6.67% or
$5,000,000
part of
$75,000,000
PRIMARY
StarStone
12.5% or $3,125,000 p/o $25M Excess
$25M
Lloyds (Axis, Ark & LECTIO )
10% or $2,500,000 part
of $25,000,000 Primary
Westchester
3.333% or
$2,500,000
part of
$75,000,000
PRIMARY
Westfield
6% or
$4,500,000
part of
$75,000,000
PRIMARY
RSUI/
Landmark
10% or
$5,000,000
part of
$50,000,000
Primary
Lexington
43.75% or $21.875,000 part of
$50,000,000 PRIMARY
Lloyds (WBC, CIN, BRIT, LANC, Ki, AXA, TAL,
Westfield, AFB, & LECTIO)
46.25% or $11,562,500 part of $25M Excess $50M
Lloyds (NOA, HCC, MMX, AUW, LECTIO)
7.5% or
$1,875,000
part of
$25M
Excess
$50M
Swiss
7.5% or
$1.875M
p/o $25M
Excess
$25M
Markel/
Evanston
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Property Insurance Market Trends
The commercial property insurance and reinsurance marketplaces stabilized
in 2024 due to positive underwriting results underpinned by previous years’
discipline in capacity deployment, risk pricing and attachment point selection.
In the first quarter of 2025, primary carriers are anticipated to be selective
while trying to meet growth objectives. Moderate to noticeable competition
will continue for accounts with favorable loss histories, good loss mitigation
programs and low exposure to catastrophic risks, such as wind, hail, named
storms or wildfire. For catastrophe-exposed accounts, carriers will show
interest if premium levels are deemed attractive and adequate.
Property insurance rates are expected to continue the trend of 2024 and
soften further in 2025.
Actual rate changes can vary widely from account to account, depending on
occupancy class and level of catastrophe exposure. Single carrier placements
will likely experience different results from shared and layered insurance
arrangements, with more volatility expected in the working layers. More
benign portfolios should expect rate changes of -5% to +5%, while riskier
portfolios could anticipate -10% to +10%. Increased capacity entering the
market will lead to more carrier flexibility regarding coverage terms.
The inflationary pressures on insurable values have eased, with
moderate single-digit year-over increases deemed sufficient for all
but the most undervalued portfolios.
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Property Insurance Market Trends
Reinsurance treaty renewals for this year are expected to be stable,
mainly due to profitable results and a strong reinsurance capital position
in the marketplace. Reinsurers will remain committed to transferring
catastrophic risk to primary insurers, which has been successful in recent
years.
Underwriting for individual accounts will focus on catastrophic risk
exposures, insurance to value adequacy and property risk control
measures. Marketing a given insurance into the global marketplace will
be critical to achieving adequate terms for complex carriers.
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