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Agenda 09/22/2020 Item #16E 2 (Purchase of Aircraft and Airport Insurance for FY 2020)
16.E.2 09/22/2020 EXECUTIVE SUMMARY Recommendation to approve the purchase of Aircraft and Airport Insurance for FY 2020 from the Member Companies of Global Aerospace in the annual amount of $183,349. OBJECTIVE: To protect the County against financial loss arising from Aircraft and Airport related claims and to comply with Federal Aviation Administration requirements as well as other contractual requirements. CONSIDERATIONS: Collier County operates three airports that include Marco Island Airport, Immokalee Airport and Everglades Airpark. Additionally, the County EMS Division operates a Med Flight helicopter (N911CK) for the purposes of emergency medical transport pursuant to FAA Part 135 Regulations and is in the process of purchasing a new Med Flight helicopter (N911 CB) in FY 2020. The County is required to carry liability insurance on its airports and hangar facilities to comply with various contractual requirements. EMS is required to maintain aviation insurance on its Med Flight helicopters in order to receive landing permission at various hospital facilities. Currently, these policies are underwritten by Global Aerospace and will expire on September 30, 2020. In anticipation of the policy expiration, a renewal proposals were sought through the County's aviation insurance broker, Arthur J. Gallagher Aviation. The worldwide aviation insurance market has tightened significantly over the past 18 months. The number of carriers writing aviation coverage has contracted significantly due to severe losses. Rates are increasing as much as 50% in many sectors of the business. According to the broker, public entity EMS Helicopter insurance is especially difficult to place. The broker approached the two competitive carriers writing EMS Helicopter business, Ace/Chubb and Global Aerospace. Only the incumbent, Global Aerospace quoted. Global Aerospace group agreed to renew the business and to offer the same or similar coverage terms at renewal. Given this limited capacity, the broker recommends that the County remain with the incumbent. The FY 20 renewal is illustrated below: Policy Limits Deductibles FY 20 FY 21 Dollar Percent Premium Premium Change Change Aircraft $30,000,000 None Incl. with Incl. with NA NA Liability Each Hull Hull Occurrence Aircraft Hull $1,592,000 $1,000- Rotors Not $147,282 $173,074 $25,792 17.5% Insured Value in Motion; 2.5% of N911CK Insured Value- $8,000,000 Rotors in Motion Insured Value (Was $50,000 in FY N911C13 20) Airport $2,000,000 None $7,868 $10,275 $2,407 30.5% Liability Each Occurrence Total $155,150 $183,349 $28,199 18.1% The Member Companies of Global Aerospace carries a Best's financial rating of "A, Superior" or greater. The commencement date of coverage is October 1, 2020. FISCAL IMPACT: The estimated annual premium for Aircraft (N911 CK), Aircraft (N911 CB) and Airport Liability Insurance is $183,349. Sufficient funds have been budgeted within Fund 516, Property Casualty Insurance to purchase coverage. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this Packet Pg. 1660 16.E.2 09/22/2020 item. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and legality, and requires majority vote for approval. -JAK RECOMMENDATION: To approve the purchase of Aircraft and Airport Insurance as outlined in the Executive Summary effective October 1, 2020 and authorize the County Manager or designee to complete the applications or other documents necessary to bind coverage through the aviation broker, Arthur J. Gallagher Aviation. Prepared by: Jeffrey A. Walker, CPCU, ARM, Division Director, Risk Management Division ATTACHMENT(S) 1. Market Update (PDF) 2.20-21 Aviation Insurance Policies - Revised Renewal Proposal - Collier County BCC (PDF) Packet Pg. 1661 16. E.2 09/22/2020 COLLIER COUNTY Board of County Commissioners Item Number: 16.E.2 Doe ID: 13279 Item Summary: Recommendation to approve the purchase of Aircraft and Airport Insurance for FY 2020 from the Member Companies of Global Aerospace in the estimated amount of $183,349. Meeting Date: 09/22/2020 Prepared by: Title: — Risk Management Name: Carleton Case 08/18/2020 10:50 AM Submitted by: Title: Division Director - Risk Management — Risk Management Name: Jeff Walker 08/18/2020 10:50 AM Approved By: Review: Risk Management Administrative Services Department Administrative Services Department Office of Management and Budget County Attorney's Office Office of Management and Budget County Manager's Office Board of County Commissioners Jeff Walker Additional Reviewer Paula Brethauer Level 1 Department Reviewer Len Price Level 2 Department Head Review Debra Windsor Level 3 OMB Gatekeeper Review Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Laura Wells Additional Reviewer Sean Callahan Level 4 County Manager Review MaryJo Brock Meeting Pending Completed 08/18/2020 10:58 AM Completed 08/24/2020 10:14 AM Completed 09/08/2020 4:17 PM Completed 09/09/2020 8:28 AM Completed 09/09/2020 12:49 PM Completed 09/09/2020 3:31 PM Completed 09/14/2020 2:38 PM 09/22/2020 9:00 AM Packet Pg. 1662 0 (OZOZ `� aago;op an1138119 eoueinsul podany pue;leaoany jo aseyoind : 6LUO a;epdn;amaew :;uawLioe4w O CN N C� N co CU Q Z) CU co L U C= co L C_ C_ 0 4-0 ca E U U m cn + J O J O J J J J J U J 1 1 UU O 0) U O U� O= L C/) } i 0 0 O Cn � C/) U) co a) -0 CD co co LC� O 0 = N Co fL} C ' ' I � Q _ +� (n to In (n 0 (n O O J O J 0 CO CD J J J Cll ( O CM 4-0 U J Cll C6 CM 0) C6 cm O (a Cll N j (n 0) Cll O Cll > QQ > Q LJJ vOi Q Q Q Q O C) 0 0 I O (n E 0 0 0 0 X 0)J C� M O O CLCD O Ln OLn O U C_ M Ln = U N ti= M j, co � I _ I ti O J • (n (n (n cn (n (n (n (n N M M M O O U M M O O = = N N �_ N N m 0� Cn D Q E al Ca N W QD tD CO As W As0 l7� (OZOZ `� aago;op an1138118 eoueinsul }aodaid pue;jeaoany jo aseyoind : 6LZ£0 a;epdn;amaew :;uauayoeuv O O i N W co 70 Q Z) co U C co U) C C 0 ca U C co L L N 0 > >' t� Q0 �� —_ a) c I L i 0 (a � 0 •(� co CD co 0 a) 0 a) cn Q C M +� a) cn— a) C U N C)11 ONLO N CD U �'� U) N (� U 0.— r—> +, (n U L a) co E o L pLEi X _ I a) a) fn_ co �� L +. o � _ 0 � c0 co Co 0) O a) a) O 0a)J 0 co Co � a) U � LnO 0 0- 0-0 O uj O_ (a co to � � OC >O a) p O c) cu OC- _LO v v 0 > O p) cn v I C -0p 2 p a) cn OU Q`��,� L cn�� o� �co E � 0 U w (� N Z_ U) a) U)a) -� O E CLo Co O� V ca i J a) a) cn +-� - C .0 N Co Q a) J E 0 — a) a) (� 0-cn �a))U� LL O 0 � J E 0) L • V N QI C_n (a Q O— C a) E C U O> T a) >'N co 0co L m(n N — &I (� .L Q co cn O C N > }; to in (U a) cu 0 i--' a) (� W o m O L �---, a)co Co(B o O 0 -•O L U C5 E �--� Q O co (U m Z Co E L _ O C C �U O— 0— U U a) L O 3 O CVU) +� -CN� a) 1 N C �"� Q• C A- 0) " 0 O Co U C Q 0 N a) in + �— 0� a) O E .— .0 U O� Q L c6 N C +� 0 - L • � cn L- in - 5� ` C)_Q) L) C • � (o a) �°U)}'� a) 0 LOB ONE L L O 0 N E O � `1 N (� �'L }' O O co C M u) C fn 0 — � cn :3 a) •f C E � .� U a) cB cn �= cn N Q C C > N O a� ��n<q-mU) C C> O cU N (Q � 2�—�U�E� i 0 E al 0 (OZOZ `� aago;oo an1138119 eoueinsul podany pue;leaoany jo aseyoind : 6LUO a;epdn;amaew :;uawLioe4w N L U) O co Q D W U Q i E O U C� C� ■ co 15 1b I Proposal of Insurance Collier County Board of County Commissioners 3311 East Tamiami Trail, Bldg D Naples, FL 34112 Presented: August 17, 2020 Effective: October 1, 2020 to October 1, 2021 Scott Bolger, CPCU, ARM Area Executive Vice PresidentArthur J. Gallagher Risk Management Services, Inc. 2580 Foxfield Road Suite 203 Saint Charles, IL 60174 4GU--) Gallagher Insurance I Risk Management I Consulting +c a Packet Pg. 1666 Collier County Board of County Commissioners 16.E.2.b Table of Contents Tableof Contents..................................................................................................................................................................... 2 ServiceTeam............................................................................................................................................................................ 3 NamedInsureds....................................................................................................................................................................... 4 CoverageHighlights.....................................................................................................................................................................5 PremiumSummary ................................................................................................................................................................... 6 Carrier Ratings and Admitted Status....................................................................................................................................17 ClaimsReporting By Policy...................................................................................................................................................18 Coverages for Consideration................................................................................................................................................ 20 Compensation Disclosure Schedule.................................................................................................................................... 21 Client Authorization to Bind Coverage................................................................................................................................. 22 i ©2020 Arthur J. Gallagher & Co. All rights reserved. Packet Pg. 1667 Collier County Board of County Commissioners Service Team Scott Bolger, CPCU, ARM has primary service responsibility for your company. We operate using a team approach. Your Service Team consists of: Scott Bolger, CPCU, ARM 847-586-0802(p) Scott_Bolger@ajg.com Area Executive Vice President 866-212-1654(f) 847-902-8108(c) Diane Jelinek, CAIP 630-549-3602(p) Diane_Jelinek@ajg.com Client Service Director 866-212-1654(f) Jennifer Cummins 630-549-3629(p) Jennifer_Cummins@ajg.com Client Service Manager 866-212-1654(f) Tom Surgalski 630-549-3611(p) Tom_Surgalski@ajg.com Claims Advisor 866-212-1654(f) 724-816-7743(c) Arthur J. Gallagher Risk Management Services, Inc. Phone Number: (630) 584-7552 U U m c 0 U L 2 0 U 0 0- 0 L NN� I.b .2 0 (L 0 L) c R L 0 c c 0 a r N O N C d EE t t� R a+ Q ©2020 Arthur J. Gallagher & Co. All rights reserved. Packet Pg. 1668 Collier County Board of County Commissioners Named Insureds Collier County Board of County Commissioners your boards, commissions, or agencies and their elective officers or members thereof Aircraft Hull and Liability Aviation General Liability Note: Any entity not named in this proposal, may not be an insured entity. This may include affiliates, subsidiaries, LLC's, partnerships and joint ventures. ©2020 Arthur J. Gallagher & Co. All rights reserved. Collier County Board of County Commissioners 16.E.2.b U U Coverage Highlights O U L O U O O M O L- a. U) a) U O a a� c ca L C d E t t� R a+ Q 5 ©2020 Arthur J. Gallagher & Co. All rights reserved. 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O U N E 7 L y E W C H Y 0 3 �' Q LCLo O H Lu LL m 7 L a 0 N O N 9 6LZ£0 339 Ajuno3 joillo3 - lesodoad IMOUGH pasinOIJ - s813110d Ooueinsul u 0 N r0+ E O w a m 3 a w !0 fOq w a O � a m c � m 3 C 0 V R O N O - d 00 n N fJ4 CO to � 40 O coo Z y ti 4 R t c> 3 a N .Q O. !C y !C y N N U- a c y K m H E d cn 3 .� L L L L a a y 0 r d C O �aQ + Collier County Board of County Commissioners Carrier Ratings and Admitted Status Member Companies of Global Aerospace American Alternative Insurance Corporation (59.24%) American Commerce Insurance Company (10%) National Indemnity Company (18.39%) Tokio Marine America Insurance Company (12.37%) A+ XV Admitted A XI Admitted A++ XV Admitted A++ XV Admitted *Gallagher companies use A.M. Best rated insurers and the rating listed above was verified on the date the :. proposal document was created. U U m Best's Credit RatingsTm reproduced herein appear under license from A.M. Best and do not constitute, either expressly or impliedly, an endorsement of Gallagher's service or its recommendations. A.M. Best is not responsible for transcription errors made in presenting Best's Credit RatingSTM Best's Credit RatingsTm are proprietary and may v not be reproduced or distributed without the express written permission of A.M. Best. A Best's Financial Strength Rating is an independent opinion of an insurer's financial strength and ability to meet its �j ongoing insurance policy and contract obligations. It is not a warranty of a company's financial strength and ability ' to meet its obligations to policyholders. Best's Credit RatingsTm are under continuous review and subject to N change and/or affirmation. For the latest Best's Credit RatingsTm and Guide to Best's Credit Ratings, visit the A.M. oa Best website at http://www.ambest.com/ratings. a - **If coverage placed with a non -admitted carrier, it is doing business in the state as a surplus lines or non -admitted carrier, and is neither subject to the same regulations as an admitted carrier nor do they participate in any state insurance guarantee fund. (D Gallagher companies make no representations and warranties concerning the solvency of any carrier, nor does it N make any representation or warranty concerning the rating of the carrier which may change. 17 a� .2 0 (L a) L) c R c c 0 a r N O N C E t V Q ■ ©2020 Arthur J. Gallagher & Co. All rights reserved. Packet Pg. 1682 Collier County Board of County Commissioners 16.E.2.b Claims Reporting By Policy Direct Reporting Immediately report all claims for the following lines of coverage to the insurance carrier. Helicopter Hull and Liability Claims o Kevin Twiss, Global Aerospace Claims Manager o Direct #: 770-634-8701 o E-mail address: ttwiss@global-aero.com Airport Liability Claims o Nancy Karlen, Global Aerospace Senior Claims Representative Manager o Direct #: 404-918-0174 o E-mail address: nkarlen@global-aero.com 18 ©2020 Arthur J. Gallagher & Co. All rights reserved. Packet Pg. 1683 Collier County Board of County Commissioners Proposal Disclosures The following disclosures are hereby made a part of this proposal. Please review these disclosures prior to signing the Client Authorization to Bind or e-mail confirmation. Proposal Disclaimer IMPORTANT: The proposal and/or any executive summaries outline certain terms and conditions of the insurance proposed by the insurers, based on the information provided by your company. The insurance policies themselves must be read to fully understand the terms, coverages exclusions, limitations and/or conditions of the actual policy contract of insurance. Policy forms will be made available upon request. We make no warranties with respect to policy limits or coverage considerations of the carrier. Compensation Disclosure 1. Gallagher Companies are primarily compensated from the usual and customary commissions, fees or, where permitted, a combination of both, for brokerage and servicing of insurance policies, annuity contracts, guarantee contracts and surety bonds (collectively "insurance coverages") handled for a client's account, which may vary based on market conditions and the insurance product placed for the client. 2. In placing, renewing, consulting on or servicing your insurance coverages, Gallagher companies may participate in contingent and supplemental commission arrangements with intermediaries and insurance companies that provide for additional compensation if certain underwriting, profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain insurance coverages placed by Gallagher with the insurance company, not on an individual policy basis. As a result, Gallagher may be considered to have an incentive to place your insurance coverages with a particular insurance company. If you do not wish to have your commercial insurance placement included in consideration for additional compensation, contact your producer or service team for an Opt -out form. 3. Gallagher Companies may receive investment income on fiduciary funds temporarily held by them, or from obtaining or generating premium finance quotes, unless prohibited by law. 4. Gallagher Companies may also access or have an ownership interest in other facilities, including wholesalers, reinsurance intermediaries, captive managers, underwriting managers and others that act as intermediaries for both Gallagher and other brokers in the insurance marketplace some of which may earn and retain customary brokerage commission and fees for their work. If you have specific questions about any compensation received by Gallagher and its affiliates in relation to your insurance placements, please contact your Gallagher representative for more details. In the event you wish to register a formal complaint regarding compensation Gallagher receives from insurers or third -parties, please contact Gallagher via e-mail at Compensation_Complaints@ajg.com or by regular mail at: Chief Compliance Officer Gallagher Global Brokerage Arthur J. Gallagher & Co. 2850 Golf Rd. Rolling Meadows, IL 60008 TRIA/TRIPRA Disclaimer If this proposal contains options to purchase TRIA/TRIPRA coverage, the proposed TRIA/TRIPRA program may not cover all terrorism losses. While the amendments to TRIA eliminated the distinction between foreign and domestic acts of terrorism, a number of lines of coverage excluded under the amendments passed in 2005 remain excluded including commercial automobile, burglary and theft insurance; surety insurance, farm owners multiple perils and professional liability (although directors and officers liability is specifically included). If such excluded coverages are required, we recommend that you consider purchasing a separate terrorism policy. Please note that a separate terrorism policy for these excluded coverages may be necessary to satisfy loan covenants or other contractual obligations. TRIPRA includes a $100 billion cap on insurers' aggregate liability. The TRIPRA program increases the amount needed in total losses by $20 million each calendar year before the TRIPRA program responds from the 2015 trigger of $100 million to $200 million by the year 2020. TRIPRA is set to expire on December 31, 2020. There is no certainty of extension, thus the coverage provided by your insurers may or may not extend beyond December 31, 2020. In the event you have loan covenants or other contractual obligations requiring that TRIA/TRIPRA be maintained throughout the duration of your policy period, we recommend that a separate "Stand Alone" terrorism policy be purchased to satisfy those obligations. 19 @2020 Arthur J. Gallagher & Co. All rights reserved. Collier County Board of County Commissioners 16.E.2.b Coverages for Consideration Overview • A proposal for any of the coverages can be provided. • The recommendations and consideration summarized in this section are not intended to identify all exposures. • Since Gallagher does not handle your complete insurance program, these recommendations only reflect items within our scope of responsibility. Property (hangars and contents) U U m c O U L 0 U O O_ O L a. 3 m c m m m a� .2 0 a a� c ca L Q r N O N C d EE t tj R a+ Q C ©2020 Arthur J. Gallagher & Co. All rights reserved. --OWNS %'T I Packet Pg. 1685 cn $ E 0 .$ .cn E E 0 U 4- E =3 0 U 0 � E 0 � � E � 0 U � 6 Z O ooe Aunoo,mlloo - le odo d mmeueH pemn II.s @hod a uei nsm uoIe� @V LZ Oz: � r r � ■ c 0 2 E E 0 U � � � 0 U 0 2 ■ 0 � � � � 0 U � 0 U 4; § ■ 2 � @ s / 4- _0 � / S _ E E / E E _ E £ f 0 § ° \ 0 / \ .§ ( o$\ _ $ $0 -C E E a f// 2 o�± ° Egg / k\E §20 / § o o * — = E ? ± o § G E R.oJ £E.g3«3 =#§§es %§0/\\ I.UREc/ 2=¥F.0® a) 0 40) e.e°CUx= E� / @ E w = E ° m 2 2 §.� $ R E o U)E± E [ \ E 'E \ ± o o § § _ § / �.§ E / .g co=[o$ 2im 0 _0.§/\E § 5 E = 3 E \•� 3 \ % E e ) f k ( « E 2 / f\/k\.7 / 7 .2 CD 0 2 § o E \ §-\ \ 5 .2 0 = .§ 'z } } a s / c = E c o E E o = R o a)¢ ° % k \ \ f a)/ w& 6 E I \ ) k Eq Collier County Board of County Commissioners Client Authorization to Bind Coverage After careful consideration of Gallagher's proposal dated August 17, 2020, we accept the following coverage(s). Please check the desired coverage(s): M= � t1n DESCRIPTION / MAJOR DIFFERENCES ❑ Accept ❑ Reject Aircraft Hull and Liability Member Companies of Global Aerospace Aircraft Hull and Liability for only ❑ Option # 1 N911CK Provides coverage for only N911CK Total Annual Premium: $78,674 Aircraft Hull and Liability for only ❑ Option # 2 N911CK and N911CB Provides coverage for both N911CK and N911CB Total Annual Premium: $173,074 ❑ Accept ❑ Reject TRIA additional annual premium of $3, 356 Aviation General Liability ❑ Accept ❑Reject Total Annual Premium: $10,275 Member Companies of Global Aerospace ❑ Accept ❑ Reject TRIA additional annual premium of $724 U U m c 0 U a� 0 U 0 a 0 L The above coverage may not necessarily represent the entirety of available insurance products. If you are interested in d pursuing additional coverages other than those addressed in the coverage considerations included in this proposal, f° please list below: 22 ©2020 Arthur J. Gallagher & Co. All rights reserved. Packet Pg. 1687 Collier County Board of County Commissioners EXPOSURES AND VALUES We confirm the payroll, values, schedules, and other data contained in the proposal, and submitted to the underwriters, are compiled from our records and we acknowledge it is our responsibility to see that they are maintained accurately. If no updates were provided to Gallagher, the values, exposures and operations used were based on the expiring policies. Provide Quotations or Additional Information on the Following Coverage Considerations: Gallagher recommends that you purchase the following additional coverages for which you have exposure. By rejecting a quotation for this valuable coverage, you understand that there will be no coverage and agree to hold Gallagher harmless in the event of a loss. Other Coverages to Consider ❑ Yes ❑ No - Property (hangars and contents) We agree that your liability to us arising from your negligent acts or omissions, whether related to the insurance or surety placed pursuant to these binding instructions or not, shall not exceed $20 million, in the aggregate. Further, without limiting the foregoing, we agree that in the event you breach your obligations, you shall only be liable for actual damages we incur and that you shall not be liable for any indirect, consequential or punitive damages. Gallagher's liability to Client arising from any acts or omissions of Gallagher shall not exceed $20 million in the aggregate. Gallagher shall only be liable for actual damages incurred by Client, and shall not be liable for any indirect, consequential or punitive damages or attorneys' fees. No claim or cause of action, regardless of form (tort, contract, statutory, or otherwise), arising out of, relating to or in any way connected with this Agreement or any Services provided hereunder may be brought by either party any later than two (2) years after the accrual of such claim or cause of action. Gallagher has established security controls to protect Client confidential information from unauthorized use or disclosure. For additional information, please review Gallagher's Privacy Policy located at https://www.ajg.com/privacy-policy/. I have read, understand and agree that the above -information is correct and has been disclosed to us prior to authorizing Gallagher to bind coverage and/or provide services to us. By Print Name (Specify Title) Company Signature Date: ©2020 Arthur J. Gallagher & Co. All rights reserved.