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TO: Mayor Thomas J. Weisner
FROM: Alex G. Alexandrou, Chief Administrative Services Office/Risk Manager
DATE: April 20, 2016
SUBJECT:
A Resolution Authorizing the Purchase of Pollution Liability Insurance for the Period of April 30, 2016 through March 31, 2019
PURPOSE:
To obtain approval to purchase Pollution Liability Insurance for the period of April 30, 2016 through March 31, 2019.
BACKGROUND:
The City has had in place $10 million dollars worth of pollution liability insurance coverage with a $250,000 self-insured deductible amount as an essential component of its overall self-insurance liability program for any pollution claims against the City. This expiring 5 year policy inclusive of the premium, applicable taxes and brokers fee totaled $156,000.00.
DISCUSSION:
Including the incumbent carrier AIG, the City's broker, Marsh, solicited bids from eight (8) carriers. AIG issued a non-renewal response, four (4) carriers declined for various reasons and one (1) chose not to respond. ACE/Chubb and Allied World Assurance Company (AWAC) provided responsive quotes. Attached as reference is a summary proposal from Marsh for both quotes including terms and conditions, markets approached, premium summary and quote comparison as well as the recommended AWAC quotation. AWAC is recommended for its proposed 3 year term instead of ACE/Chubb as their policy is less restrictive in coverage terms than Chubb and comes in at a lower comparable cost. AWAC's premium quote inclusive of premium, taxes and brokers fee is $80,123.00 for three years compared to $87,108.00 for Chubb. AWAC is highly rated in terms of financial stability and ability to pay claims. Funds for pollution 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 liability claims beyond $250,000 per claim
RECOMMENDATIONS:
That the Finance Committee approve the...
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