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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 Na...
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