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TO: Mayor Richard C. Irvin
FROM: Alex G. Alexandrou, Chief Management Officer
Deborah Lang, Deputy Corporation Counsel
DATE: May 1, 2025
SUBJECT:
A Resolution Authorizing the Purchase of Pollution/Environmental Liability Insurance for the Period of April 30, 2025, to April 30, 2028.
PURPOSE:
To obtain approval to purchase Pollution/Environmental Liability Insurance for the period of April 30, 2025, to April 30, 2028.
BACKGROUND:
The City has had in place for the past three (3) years a ten-million-dollar ($10M) pollution liability insurance policy with a $250,000.00 self-insured deductible amount from Allied World Assurance Company (AWAC) as an essential component of its overall self-insurance liability program for any pollution claims against the City. This expiring three (3) year policy inclusive of the premium, applicable taxes, and broker fee totaled $94,110.00.
DISCUSSION:
The City's broker, Hub International, reviewed the existing coverage for adequacy, updated the City's schedule of covered locations and surveyed the market conditions for pollution liability coverage. Nine (9) other markets contacted were either not competitive or could not match or improve the current coverage offered by AWAC. The recommendation is to accept the three (3) year renewal quote from incumbent Allied World Assurance Company (AWAC). Attached as reference is a premium summary and coverage terms. The overall renewal rate is two percent (2%) percent above 2022 levels. In addition, Hub was able to negotiate the addition of automatic grant of coverage for inclusion of newly acquired properties, reduced the across-the-board deductible for all claims to $250,000 and added unscheduled omitted locations to the coverage. AWAC's premium quote inclusive of premium and taxes is $94,110.00. Hub is not charging a broker fee for this transaction. AWAC is highly rated in terms of financial stability and ability to pay claims. $95,800.00 was allocated in 2025 for pollution/environmental liability insurance are budgeted in account #601-0000-410.40-01.
IMPACT STATEMENT:
City would have a gap in coverage and be financially responsible for any pollution/environmental liability claims beyond $250,000 per claim for existing properties and no coverage for newly acquired properties.
RECOMMENDATIONS:
That the Committee of the Whole approves the resolution authorizing the purchase of pollution/environmental liability insurance through Allied World Assurance Company as proposed by broker Hub International for a total of $94,110.00.
cc: Committee of the Whole
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing the Purchase of Pollution/Environmental Liability Insurance for the Period of April 30, 2025, to April 30, 2028.
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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 has had in place for the past three (3) years a ten-million-dollar ($10M) pollution/environmental liability insurance policy with a $250,000 self-insured deductible amount from Allied World Assurance Company (AWAC) as an essential component of its overall self-insurance liability program for any pollution/environmental liability claims against the City, and
WHEREAS, the City Council has determined it is in the best interests of the citizens of Aurora that the City purchase pollution liability insurance for a three (3) year term through Allied World Assurance Company ("AWAC") as proposed by broker Hub International for a total of $94,110.00, and
WHEREAS, the proposal from broker Hub International for coverage through Allied World Assurance Company best meets the City’s pollution/environmental liability coverage requirements at the lowest cost. Relevant AWAC documents are attached as reference.
WHEREAS, the 2025 City Budget provides $95,800.00 for this item in account no. 601-0000-410-40-01)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: That three (3) years of pollution/environmental liability insurance be purchased from Allied World Assurance Company through insurance broker Hub International with an April 30, 2025, effective date of coverage inclusive of premium and taxes for the total cost of $94,110.00