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Recommendation to authorize City Manager to purchase excess municipal liability insurance for the period of July 1, 2005 through July 1, 2006, through Driver-Alliant Insurance Services, for a total premium not to exceed $950,000; authorize City Manager to purchase airport liability insurance for the period of July 1, 2005 through July 1, 2006, through Driver-Alliant Insurance Services, for a total premium of $229,917; and authorize City Manager to purchase aircraft liability and hull insurance for police helicopters for the period of July 1, 2005 through July 1, 2006, through Driver-Alliant Insurance Services, for a total premium of $209,832. (Citywide)
DISCUSSION
The City annually purchases excess municipal liability, airport liability, and aircraft
liability and hull insurance to cover catastrophic exposures arising from general city
operations. This coverage is obtained through the City's broker of record, Driver-
Alliant Insurance Services.
This year's policy for excess municipal liability insurance provides coverage limits
of $20 million in excess of the City's $3 million self-insured retention. The renewal
premium is an amount not to exceed $950.000. We anticipate the rate to be
comparable to last year. Coverage for war risks or terrorist acts is excluded from
this policy. Our broker will continue to explore all options and obtain other quotes
to reduce premium costs up until the date of renewal.
The City maintains limits of $100 million in airport liability coverage and $50 million
in coverage for liability resulting from terrorists acts. The renewal premium is
$229,917, which is the same amount as last year's policy. The policy includes
extended coverage for international terrorist acts under the Terrorism Risk
Insurance Act (TRIA).
The City maintains limits of $50 million in aircraft liability and hull insurance, subject
to a 2.5 percent deductible for the Police Department's two Eurocopter EC-130
helicopters. The renewal premium is $209.832, which is the same amount as last
year's policy, with a lowering of the deductible from 5 percent to 2.5 percent. This
policy excludes war risk coverage.
This matter was reviewed by Deputy City Attorney Richard F. Anthony and Budget
Management Officer David Wodynski on May 31,2005.
TIMING CONSIDERATIONS
City Council action is requested on June 14, 2005, to allow the City to bind insurance
coverage by the July 1,2005 policy renewal date.
FISCAL IMPACT
The total cost of all three renewal premiums will not exceed $1,389,749 for the
period of July 1, 2005 through July 1, 2006. Sufficient funding has been budgeted
in the Insurance Fund (IS 390) and in the Department of Human Resources (HR)
budget for insurance renewals.
SUGGESTED ACTION
Approve recommendation.
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Respectfully Submitted,
KEVIN BOYLAN
DIRECTOR OF HUMAN RESOURCES