TITLE
Recommendation to authorize City Manager to purchase difference in conditions (earthquake insurance) with Great Lakes Reinsurance, covering City Hall and the Convention Center, for the period of
July 1, 2014 through July 1, 2015, through Alliant Insurance Services, Inc., for a total premium not to exceed $240,000. (Citywide)
DISCUSSION
For many years, the City did not purchase earthquake insurance because of exorbitant pricing. This year, the City has again procured earthquake insurance at a reasonable cost, with a 2 percent decrease from last fiscal year for a total premium of $240,000, while still allowing the City to procure an additional $10 million in coverage over last fiscal year. The insurance will grant the City $17.5 million/occurrence in coverage after the City exhausts a $5 million self-insured retention, covering both City Hall and the Convention Center, in the event of an earthquake. The annual aggregate of the policy is also $17.5 million. The insurance will cover the buildings, personal property within the buildings, and actual loss of income because of a building closure.
This matter was reviewed by Deputy City Attorney Amy Webber on May 27, 2014 and by Budget Management Officer Victoria Bell on May 30, 2014.
TIMING CONSIDERATIONS
City Council action is requested on June 17, 2014, to allow the City to officially bind insurance coverage.
FISCAL IMPACT
The total premium cost will not exceed $240,000 for the period of July 1, 2014 through July 1, 2015. Funding has been budgeted in the Insurance Fund (IS 390) within the Department of Human Resources (HR). The cost of difference in conditions (earthquake) insurance is allocated to all funds, with approximately 16 percent allocated to the General Fund (GP). There is no local job impact associated with this request.
SUGGESTED ACTION
Approve recommendation.
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Respectfully Submitted,
DEBORAH R. MILLS
DIRECTOR OF HUMAN RESOURCES
APPROVED:
PATRICK H....
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