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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 the Purchase of Excess Liability and Cyber Liability Insurance for the Period of December 31, 2016 to December 31, 2017
PURPOSE:
To obtain approval to purchase Excess Liability and Cyber Liability Insurance for the period of December 31, 2016 through December 31, 2017.
BACKGROUND:
From 2000 to 2015, the City had in place $20 million dollars’ worth of excess liability or umbrella insurance coverage with a $2 million dollar deductible as a major component of its self-insurance program for handling liability claims made against the City. In 2016 the City increased its excess liability policy limit by purchasing $35 million dollars of excess liability coverage. For 2016 National Casualty, Torus National and Lexington Companies provided the excess and cyber liability policies. This expiring program inclusive of premiums, taxes and broker fee totaled $234,169. Arthur J. Gallagher Risk Management Services (“Gallagher”) was the broker for excess and cyber liability insurance. To date there were no excess or cyber liability claims reported for 2016. Funds for purchase of these insurance coverages are budgeted in the Property and Casualty Risk Fund.
DISCUSSION:
After review of our current self-insured program and the insurance marketplace, Gallagher solicited additional bids beyond renewal of the existing program. As a result, the City will be able to maintain its coverage limit of $35 million with the same $2 million dollar deductible at a total program cost (inclusive of all premiums, taxes, broker fee) of $229,389, which represents a 2% decrease compared to the expiring program cost. The recommended insurance companies for renewal are Allied World National Assurance Company, StarStone (formerly Torus) National Insurance Company and Endurance American Insurance Company for excess liability and Illinois National Insurance Company for cyber liability. The excess liability coverages provided are General Liability, Auto Liability, Law Enforcement Liability, Employment Practices Liability, Public Officials Liability, and Public Crisis Communication & Public Crisis Response. Attached as reference are the following documents: Marketplace Review, Program Structure, Premium Summary and Insurance Company Ratings. All recommended companies are highly rated in terms of financial strength, size and market position.
IMPACT STATEMENT:
N/A
RECOMMENDATIONS:
That the City Council approve the resolution authorizing the purchase of Excess Liability and Cyber Liability as proposed by broker Gallagher per the attached summary for a total of $229,389.
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 Purchase of Excess Liability and Cyber Liability 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 an the best interests of the citizens of Aurora that the City purchase excess general liability insurance and purchase cyber liability insurance for the period of December 31, 2016 through December 31, 2017; and
WHEREAS, the proposal from Arthur J. Gallagher for coverage through Allied World National Assurance Company, StarStone (formerly Torus) National Insurance Company and Endurance American Insurance Company for excess liability and Illinois National Insurance Company for cyber liability. The excess liability coverages provided are General Liability, Auto Liability, Law Enforcement Liability, Employment Practices Liability, Public Officials Liability, and Public Crisis Communication & Public Crisis Response. A Premium summary is attached hereto for reference;
WHEREAS, the 2017 City Budget provides $229,389 for this item in account no. 601-0000-410-40-40.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that one (1) year of Allied World National Assurance Company, StarStone (formerly Torus) National Insurance Company and Endurance American Insurance Company for excess liability and Illinois National Insurance Company for cyber liability. The excess liability coverages provided are General Liability, Auto Liability, Law Enforcement Liability, Employment Practices Liability, Public Officials Liability, and Public Crisis Communication & Public Crisis Response through insurance broker Arthur J. Gallagher with a December 31, 2016 effective date of coverage inclusive of premiums and brokerage fees for the total cost of $229, 389.00.