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TO: Mayor Robert J. O’Connor
FROM: Alex Alexandrou, Chief Administrative Services Officer
DATE: December 6, 2016
SUBJECT:
A Resolution Authorizing Purchase of Property/Boiler Machinery, Inland Marine, Employee Dishonesty/Crime, Excess Workers Compensation and Fine Arts Insurance for the Period of December 31, 2016 through December 31, 2017
PURPOSE:
To obtain approval of the proposal from broker Wine Sergi, Inc. for Property/Boiler Machinery and Inland Marine insurance from Chubb Insurance Company, Excess Workers Compensation insurance from Safety National Casualty Insurance, Employee Dishonesty/Crime insurance from Travelers and Fine Arts Insurance from Hanover Insurance Company for the period of December 31, 2016 through December 31, 2017.
BACKGROUND:
The City maintains these types of insurance coverages as part of its overall insurance and risk management program including self-insured retention levels. For 2016 the City purchased Property/Boiler Machinery, Inland Marine and Employee Dishonesty/Crime coverage from Chubb, Excess Workers Compensation Insurance from Safety National and Fine Arts coverage from Travelers.
DISCUSSION:
After review of our current self-insured program and the insurance marketplace, Wine Sergi solicited additional bids beyond renewal of the existing program. For Property markets, Chubb, Travelers, Hartford and CNA were solicited. Based on expiring property rates, the other carriers could not match or better the current Chubb rates for the City. Chubb is proposing a 1.1% increase over 2016 while maintaining the deductible at $50,000 and increasing blanket building and content values by 2%. For Excess Workers Compensation markets, Safety National, Midwest Employers Casualty and AIG were solicited. Only Safety National would offer Self Insured Retentions’ under $1 million per claim at this time. Safety National is proposing an 8.2% increase over 2016 while maintaining the deductible per claim at $675,000. For Crime markets, Chubb and Travelers were solicited. Travelers replaced Chubb as the new Crime carrier in 2016. Travelers has offered a 3 year rate guarantee which is recommended over Chubb’s proposal. Travelers is proposing less than 1% increase for 2016. For Fine Arts, Hanover and Great American were solicited. Hanover is proposing less than 1% increase for their coverage. Overall for all program coverages including broker fee the total increase is 3.7% above 2016 ($497,899 vs. $480,086). Funds for these insurance coverages are budgeted for in the Property and Casualty Fund budget. Attached for reference are the following documents: Proposal Summary, Insurance Coverage Summary and Program Structure Chart.
IMPACT STATEMENT:
N/A
RECOMMENDATIONS:
That the City Council approve the resolution authorizing the purchase of Property/Boiler Machinery, Inland Marine, Employee Dishonesty/Crime, Excess Workers Compensation and Fine Arts Insurance for the Period of December 31, 2016 through December 31, 2017 as proposed by broker Wine Sergi per the attached proposal summary for $497,899 inclusive of all applicable premiums, taxes and broker fee.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing the Renewal Purchase of Property/Boiler Machinery, Inland Marine, Employee Dishonesty/Crime, Excess Workers Compensation and Fine Arts Insurance for the Period of December 31, 2016 through December 31, 2017.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City Council has determined it is the best interest of the citizens of Aurora that the City purchase Property/Boiler Machinery, Inland Marine, Employee Dishonesty/Crime, Excess Workers Compensation and Fine Arts Insurance for the period of December 31, 2016 through December 31, 2017; and
WHEREAS, the renewal proposal from insurance broker Wine Sergi, Inc., for coverage through Chubb Insurance Company for Property/Boiler Machinery Insurance, Travelers Insurance for Employee Dishonesty/Crime, Hanover Insurance for Fine Arts and Safety National Casualty Corporation for Excess Workers' Compensation Insurance, a premium summary attached hereto, best meets the City's Property/Boiler Machinery, Inland Marine, Employee Dishonesty/Crime, Excess Workers Compensation and Fine Arts Insurance coverage requirements.
WHEREAS, the 2017 City Budget provides $497, 899 for this item in account numbers 601-0000-410-40-10, 601-0000-410-40-40, and 601-0000-410-40-70.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that one (1) year of Property/Boiler Machinery, Inland Marine, Employee Dishonesty/Crime, Excess Workers Compensation and Fine Arts Insurance be renewed and purchased from Chubb Insurance Company, Travelers Insurance, Hanover Insurance and Safety National Casualty Corporation through insurance broker Wine Sergi, Inc., with a December 31, 2016 effective date of coverage for the cost of $497, 899.00.