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Agenda 09/24/2013 Item #11H 9/24/2013 11 .H. EXECUTIVE SUMMARY Recommendation to approve the purchase of Liability, Automobile, Workers' Compensation, Aircraft, Airport and other insurance coverage for FY 2014 in the annual amount of$1,057,459,a reduction of 5.59% or$62,565. OBJECTIVE: To purchase Liability, Automobile, Workers' Compensation, Aircraft, Airport and other insurance coverage for FY 2014. CONSIDERATIONS: Pursuant to Florida Statutes Section 768.28 and Chapter 440, the Risk Management Department administers two risk management funds (Fund 516 and Fund 518) to finance its Property, Casualty and Workers' Compensation risk financing programs. Generally, the County's deductible (self insured retention) is $200,000 per occurrence with the exception of Workers' Compensation, which has a $500,000 per claim deductible. Claims are administered by Johns Eastern Company. Insurance and Risk Management Services (IRMS) is the County's contracted broker of record for coverage other than aircraft and airports. Nationair is the specialty broker for aircraft and airport coverage. To assure sufficient coverage limits, the County purchases excess coverage to protect against large 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; or in the event that a claims bill is enacted pursuant to 768.28, Fla. Statutes. A complete renewal summary sheet is attached which describes the coverage type, limits purchased, purpose, statutory citation and cost of each coverage. The significant highlights of the FY 2014 renewal are as follows. ❑ Total premiums decreased 5.59%or$62,565 on an annual basis. ❑ Excess Workers' Compensation is up 9.4% due to a hardening of the market. Eight carriers were evaluated. Four carriers submitted quotes. The incumbent, Midwest presented the best pricing and terms including a 2 year rate guarantee at a 14.8% increase. It is the general consensus that the excess Workers' Compensation market will continue to harden through 2015 and therefore, the 2 year rate guarantee is recommended. An explanation of factors contributing to the hardening of the market is attached in the backup material. ❑ In FY 2012,the pollution liability carrier offered a three year rate guarantee at a premium reduction of 32%.The Board approved this offer and annual premiums were reduced from $75,245 to $50,560. FY 14 will complete the third year of the three year rate guarantee period. ❑ Aircraft insurance (EMS Medflight) is down 13.0% due to a reduction in the premium rate and due to a profit sharing premium credit related to safe aircraft operation. ❑ Staff recommends increasing the self insured retention from $200,000 per occurrence to $300,000 per occurrence. Premium savings is projected to be $63,473 per year based upon loss history. Projected net premium savings (after losses) over the ten year period analyzed is $170,210. ❑ Coverage limits for liability are $5,000,000 per occurrence for General Liability (including Medical Malpractice), Automobile Liability and Public Officials Errors & Omissions (including employment practices and sexual harassment). Packet Page-776- 9/24/2013 11.H. ❑ The property insurance program renews on April 1, 2014 and is not included in this recommendation. ❑ Flood insurance is not included in this submittal and will be presented separately. All carriers hold a Best's financial rating of"A, Superior"or higher. FISCAL IMPACT: Total premiums are $1,057,459 which reflects a reduction in cost of 5.59% or $62,565. Sufficient funds have been budgeted within Fund 516, Property and Casualty Insurance and Fund 518, Workers' Compensation Insurance to purchase coverage as outlined in the Executive Summary and Renewal Summary sheet. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this item. LEGAL CONSIDERATIONS: This item has been approved by the County Attorney's Office as to form and legality and requires majority vote for approval.—CMG RECOMMENDATION: It is recommended that the Board approves the following: 1) The purchase of coverage as outlined in the Executive Summary and the Casualty Renewal Summary Sheet effective October 1, 2013. 2) The rejection of Uninsured Motorist Insurance with the exception of scheduled take home vehicles, authorizing the County Manager or designee to execute the necessary rejection forms. 3) Authorizing the County Manager or designee to complete the applications or other documents necessary to bind coverage and services effective October 1, 2013. PREPARED BY: Jeffrey A. Walker, CPCU, ARM,Director,Risk Management Department Packet Page-777- 9/24/2013 11 .H. COLLIER COUNTY Board of County Commissioners Item Number: 11.11.H. Item Summary: Recommendation to approve the purchase of Liability, Automobile, Workers' Compensation, Aircraft, Airport and other insurance coverage for FY 2014 in the annual amount of$1,057,459, a reduction of 5.59%or$62,565. (Jeff Walker, Administrative Services Risk Management Director) Meeting Date: 9/24/2013 Prepared By Name: WalkerJeff Title:Director-Risk Management,Risk Management 8/29/2013 4:33:40 PM Submitted by Title:Director-Risk Management,Risk Management Name: WalkerJeff 8/29/2013 4:33:42 PM Approved By Name: pochopinpat Title:Administrative Assistant,Facilities Management Date: 9/4/2013 3:02:46 PM Name: GreeneColleen Title:Assistant County Attorney,County Attorney Date: 9/4/2013 3:58:39 PM Name: PriceLen Title:Administrator, Administrative Services Date: 9/13/2013 10:17:26 AM Name: GreeneColleen Title:Assistant County Attorney,County Attorney Date: 9/13/2013 11:53:28 AM Packet Page-778- 9/24/2013 11 .H. Name: KlatzkowJeff Title: County Attorney Date: 9/13/2013 1:46:01 PM Name: PryorCheryl Title:Management/Budget Analyst, Senior,Office of Manag Date: 9/15/2013 1:09:26 PM Name: OchsLeo Title: County Manager Date: 9/17/2013 2:23:04 PM Packet Page-779- 9/24/2013 11.H. a) a) L N D > N N - � H 2 C 2 a M a) o o LL o U —7 m m a a.) m 0 r E"- 7 2 3 H 0 0>)� o . o V j N aO N 3 U O o E N U y d W st N U N O o y D 7 O o E o W a O U 7 L o a 0 J @ a 7 m Y m CO 0 O O a) c lL 'O- m 01 (A o E U m aC m m � 0 `N � '� c0 a a> E N a 9: W C a ' N N E co N a W C C co a) @ E N L @ a' E U aL 0 p E N O L C ca C 9 a > O V 0 g Y O d a 0 � (n C ` O m a ra O 7 m� ° ° a @ m• o o N - 2.g oW o a2 E a E .m m� u m a)..g.,a. r,,,d m d c L o mN.c) a 2o o a o a - a c N a 0 2, 7 CL . '0 N iN U m 6 O > s i m— m? m m N rnocE E 2' 7E c c N E a c c a 4 m° w 3 m5 am_ mo.c c ` m a ,-• ,_u) 0E mom N a E c C'O a m a)y! 7 Y O 2 O.o -2 m Si_) U o' > m c N a O r 0° ° � • N o-o E `5 5 O ° C- o'° i 000 ' c o a c , d ,_- ? 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