Agenda 09/25/2012 Item #11G 9/25/2012 Item 11 .G.
EXECUTIVE SUMMARY
Recommendation to approve the purchase of Liability, Automobile, Workers'
Compensation, Flood, Aircraft,.Airport and other insurance coverage and services for
FY 2013 in the annual amount of$1,325,228, a reduction of$37,923.
OBJECTIVE: To gain approval from the Board to purchase Liability, Automobile, Workers'
Compensation, Flood, Aircraft, Airport and other insurance coverage and services for FY 2013 in the
amount of$1,325,228.
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
manage its Property, Casualty and Workers' Compensation risk financing programs.
Generally, the County's deductible (self insured retention) is the first $100,000 per claimant/$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.
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 cap (such as employment practices
liability); to provide higher limits required by contract; or to cover a claims bill pursuant to 768.28, Fla.
Statutes.
A complete renewal summary sheet is attached which describes the purpose and cost of each
coverage. To administer the program the County purchases claims administration services and
brokerage services.
The significant highlights of the FY 2013 renewal are as follows.
❑ Total premiums and fixed costs decreased 2.78% or $37,923 on an annual basis. Costs are
down or flat across almost all lines. Savings is due primarily to a reduction in the cost of the
primary and excess liability insurance program.
❑ Excess Workers' Compensation is up 9.5% due to a hardening of the market.
❑ In FY 2012, the pollution carrier offered a three year rate guarantee at a reduction of 32%.The
Board approved this offer and annual premiums were reduced from $75,245 to $50,560. The
entire three year premium was paid in FY 12. The County is entering the second year of the
three year rate guarantee.
❑ Staff recommends increasing the self insured retention to a flat $200,000 per occurrence from
$100,000 per person/$200,000 per occurrence. Staff completed a study which compared
premium savings to reinsurance recoveries over a ten year period. Premium savings for this
option are $124,438 per year while the County would forego $31,087 per year (average) in
reinsurance recoveries. Therefore, premium savings would exceed the loss of expected
reinsurance recoveries over time. Thus, the change is recommended.
❑ Coverage limits for liability are increased to $5,000,000 per occurrence across the General
Liability (including Medical Malpractice) and Automobile Liability lines of coverage. The current
limits are $2,000,000 per occurrence for General Liability and $1,000,000 per occurrence for
Automobile Liability. Staff is recommending this increase in response to the recent Lee
Memorial Hospital/Aaron Edwards claims bill case. The cost to increase the limit is $67,102 per
year. Public Officials Liability limits will remain at$5,000,000 per occurrence.
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9/25/2012 Item 11.G.
to Third Party Adjusting services are not included. The program is currently out to bid and will be
brought back to the Board for award at a later date.
❑ Flood insurance is included in this request for approval at the current scope and cost. Changes
to the Flood Insurance program will be brought back to the Board for approval at a later date
once the scope and cost of coverage is finalized relative to the updated Flood Insurance Rate
Maps.
❑ The property insurance program renews on April 1, 2013 and is not included in this
recommendation.
All carriers hold a Best's rating of"A, Superior" or higher.
FISCAL IMPACT: Total premiums and fixed costs are $1,325,228 which reflects a reduction in cost of
$37,923 or 2.78%. No pollution premiums would be due in FY 13 or FY 14. Funds have been
budgeted within Fund 516, Property and Casualty Insurance and Fund 518, Workers' Compensation
Insurance for the purchase of 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 reviewed by the County Attorney's Office, requires
majority vote, and is legally sufficient for Board action. —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, 2012.
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) Authorize the County Manager or designee to complete the applications or other documents
necessary to bind coverage and services effective October 1, 2012.
PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management Department
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9/25/2012 Item 11 .G.
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.G.
Item Summary: Recommendation to approve the purchase of Liability, Automobile,
Workers' Compensation, Flood, Aircraft, Airport and other insurance coverage and services for
FY 2013 in the annual amount of$1,325,228, a reduction of$37,923. (Jeff Walker, Risk
Management Director)
Meeting Date: 9/25/2012
Prepared By
Name: WalkerJeff
Title: Director-Risk Management,Risk Management
8/31/2012 2:03:00 PM
Submitted by
Title: Director-Risk Management,Risk Management
Name: WalkerJeff
8/31/2012 2:03:02 PM
Approved By
Name: pochopinpat
Title: Administrative Assistant,Facilities Management
Date: 9/7/2012 2:37:48 PM
Name: PriceLen
Title: Administrator, Administrative Services
Date: 9/13/2012 10:27:44 AM
Name: GreeneColleen
Title: Assistant County Attorney,County Attorney
Date: 9/13/2012 12:15:57 PM
Name: KlatzkowJeff
Title: County Attorney
Date: 9/14/2012 10:08:35 AM
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9/25/2012 Item 11.G.
Name: FinnEd
Title: Senior Budget Analyst,OMB
Date: 9/17/2012 10:56:48 AM
Name: OchsLeo
Title: County Manager
Date: 9/17/2012 1:22:02 PM
Amok
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9/25/2012 Item 11 .G.
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^ Packet Page-1617-
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FY 2013 SIR Analysis 9/25/2012 Item 11 .G.
Since 1996 A B C=A-B
Policy Year #Claims Total Loss Total Recovery Total Recovery Lost Premium Increase
Incurred Excess 100,00/200,000 SIR 200,000 SIR Recovery Saving SIR?
100,000 $200,000 SIR
1996 2 $ 330,944.77 $ 132,644.00 $ -
1997 1 $ 150,531.81 $ 50,531.81 $ -
1998 0 $ - $ - $ -
1999 0 $ - $ - $ -
2001 0 $ - $ - $ -
2002 0 $ - $ - $ -
2003 1 $ 144,254.00 $ 44,254.00 $ -
2004 2 $ 637,281.00 $ 276,839.00 $ 76,839.00
2005 2 $ 269,547.00 $ 69,547.00 $ -
2006 0 $ - $ - $ -
2007 1 $ 296,461.00 $ 196,466.00 $ 96,466.00
2008 2 $ 495,737.00 $ 368,652.00 $ 168,652.00
2009 0 $ - $ - $ -
2010 0 $ - $ - $ -
2011 0 $ - $ - $ -
AVG 0.73333 $ 154,983.77 $ 75,928.92 $ 22,797.13 $ 53,131.79 $124,438.00 YES
**If Premium Savings is greater than Lost Recovery-Positive Result
Since 2001
2001 0 $ - $ - $ -
2002 0 $ - $ - $ -
2003 1 $ 144,254.00 $ 44,254.00 $ -
2004 2 $ 637,281.00 $ 276,839.00 $ 76,839.00
2005 2 $ 269,547.00 $ 69,547.00 $ -
2006 0 $ - $ - $ -
2007 1 $ 296,461.00 $ 196,466.00 $ 96,466.00
2008 2 $ 495,737.00 $ 368,652.00 $ 168,652.00
2009 0 $ - $ - $ -
2010 0 $ - $ - $ -
2011 0 $ - $ - $ -
AVG 0.72727 $ 167,570.91 $ 86,887.09 $ 31,087.00 $ 55,800.09 $124,438.00 YES
**If Premium Savings is greater than Lost Recovery-Positive Result
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9/25/2012 Item 11 .G.
l'4' kii *
We have approached several markets on your behalf and the results of our efforts are outlined below.
Policy Type: All Lines Aggregate
Princeton Excess and Surplus Insurance Company
➢ Proposed.
Preferred Governmental Insurance Trust(PGIT)
> Declined to quote—could not provide comparable coverage terms (per email dated 8/21/12)
Florida League of Cities
> Declined to quote—Collier County is too large for their program(per telephone conversation with
David Ladwig)
Underwriters at Lloyds
> Did not respond in time.
FACT
> Declined to quote—Collier County is too large for their program—note, the Florida League of
Cities is now administering the FACT program and applying their same underwriting guidelines.
APEX Insurance
> Did not respond in time.
Victor 0. Schinnerer
> Did not respond in time.
Policy Type: Excess Workers' Compensation
Midwest Employers Insurance Company
> Proposed.
Arch Specialty
> Declined to quote—could not offer competitive pricing or terms.
Safety National
➢ Declined to quote—could not offer competitive pricing or terms.
New York Marine and General Insurance
> Declined to quote—could not offer competitive pricing or terms.
Policy Type: Equipment Breakdown
Hartford Steam Boiler Inspection & Insurance Company
➢ Proposed.
11/1/2011 P a j c 124
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9/25/2012 Item 11 .G.
Zurich Insurance
➢ Offered terms but were not competitive.
Continental Insurance
➢ Offered terms but were not competitive.
Policy Type: Excess Crime
Hartford Insurance Company
➢ Proposed.
Hanover Insurance Company
➢ Declined to quote—could not offer competitive pricing.
11/1/2011 P a g C 125
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9/25/2012 Item 11 .G.
Casualty Insurance Premiums 2007-2013
(Adjusting and Brokerage Fees Removed for Comparison)
$2,200,000
$2,100,000
9
$2,000,000
$1,900,000 ..........__. ..
1 ipm..F
U $1,700,000 ; ._ --__— ------ __—_....___ _._.__ __.__�—.___ AMP
$1,600,000 u
$1,500,000
$1,400,000
$1,300,000 III
$1,200,000
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Fiscal Year
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