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Home My WebLink About2015-06-23; City Council; 22007; Renewal Property Insurance Alliant Insurance Service Inc PEPIPCITY OF CARLSBAD - AGENDA BILL AB# 22,007 RENEWAL OF PROPERTY INSURANCE COVERAGE THROUGH ALLIANT INSURANCE SERVICE INC/S PUBLIC ENTITY PROPERTY INSURANCE PROGRAM (PEPIP) DEPT. DIRECTOR <pc MTG. 6/23/15 RENEWAL OF PROPERTY INSURANCE COVERAGE THROUGH ALLIANT INSURANCE SERVICE INC/S PUBLIC ENTITY PROPERTY INSURANCE PROGRAM (PEPIP) CITY ATTORNEY A-ft DEPT. ASD/RISK RENEWAL OF PROPERTY INSURANCE COVERAGE THROUGH ALLIANT INSURANCE SERVICE INC/S PUBLIC ENTITY PROPERTY INSURANCE PROGRAM (PEPIP) CITY MANAGER U RECOMMENDED ACTION: Approval of Resolution No. 2015-158 , approving the purchase of property insurance through Alliant Insurance Services, Inc.'s Public Entity Property Insurance Program. ITEM EXPLANATION: The city participates in the Alliant Insurance Services, Inc. joint purchase program known as PEPIP (Public Entity Property Insurance Program), or APIP (Alliant Property Insurance Program) depending on the group of cities marketed, for property coverage. Alliant negotiated a renewal of coverage for the city for the FY 2015-2016 policy year with APIP. A summary of coverage is shown in Exhibit 2 and the coverage is similar to that of the current policy with the exception of a higher deductible for wildfire claims (revised from $25,000 to $100,000). The premium is $155,259.40 to continue $238 million of coverage. (This represents a 34 percent increase over last year's premium). Staff recommends purchasing property insurance at a cost not to exceed $155,259.40. FISCAL IMPACT; This 34 percent rise represents a $39,384.53 increase in premium over last year, which is the result of added assets, including all city pump stations, additional contents coverage, and includes a surcharge for the previously paid wildfire claim. This premium will be paid with funds from the FY 2015-2016 Liability Fund. The Carlsbad Municipal Water District is also insured under this coverage and contributes to the premium through the budget process. ENVIRONMENTAL IMPACT: This action is not a "project" within the definition ofthe California Environmental Quality Act in that it does not have a direct or indirect impact on the physical environment under California Code of Regulations, Title 14, Chapter 3, section 15378. DEPARTMENT CONTACT: Ed Garbo, (760) 602-2471, ed.garbo@carlsbadca.gov FOR CITY CLERKS USE ONLY. 10^ COUNCIL ACTION: APPROVED 10^ CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER-SEE MINUTES • AMENDED • Page 2 EXHIBITS; Resolution No 2015-158 approving the purchase of property insurance through Alliant Services, Inc.'s Public Entity Property Insurance Program (PEPIP) Executive Summary z EXHIBIT 1 1 RESOLUTION NO. 2015-158 2 3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE PURCHASE OF PROPERTY 4 INSURANCE THROUGH ALLIANT SERVICES INC.'S PUBLIC ENTITY PROPERTY INSURANCE PROGRAM 5 6 7 8 9 10 28 WHEREAS, the City desires to renew its property insurance through Alliant Insurance Services, Inc.'s Alliant Property Insurance Program (APIP); and WHEREAS, Alliant Insurance Services has negotiated a renewal of property coverage from July 1, 2015 to June 30, 2016 for a premium of $155,259.40; and 11 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, 12 California, as follows that: 1. The above recitations are true and correct. 2. That the purchase of property coverage through the Alliant Property Insurance Program, effective July 1, 2015 to June 30, 2016, is hereby approved and the Administrative Services Director is authorized to issue a warrant in the amount of 19 20 21 22 23 24 // // // // // 25 // 26 27 // // 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City of Carlsbad on the 23'^'^ day of June, 2015, by the following vote to wit: AYES: NOES: Council Members Hall, Blackburn, Schumacher, Wood and Packard. None. ABSENT: None. MATT HALL, Mayor ATTEST: BARBARA ENGLEfOf^, City Clerk (SEAL) AV^. OLv, EXHIBIT 2 Alliant SPECIALTY GROUP ALLIANT PROPERTY INSURANCE PROGRAM (APIP) July 1,2015-July 1,2016 City of Carlsbad EXECUTIVE SUMMARY Revised with $100,000 Wildfire Deductible We are pleased to provide you with the 2015-2016 Alliant Property Insurance Program (APIP) attached renewal material. The property market has been in a soft cycle for the last year with underwriters willing to give decreases based on the lack of catastrophe losses worldwide, and record capacity and surplus in the marketplace. Sadly, while physical and human catastrophes abound, in recent years most of these have occurred in regions of the world that are not significantly insured. Therefore, as we enter the 2015/16 renewal, most insureds will see rate decreases. For those insureds, however that have experienced significant or attritional loss history, rates may increase. In keeping with the programs' general history, we expect rates to remain below what can be achieved in the market for similar coverage. The primary $2.5M layer will continue to be placed with our long-term partner, Lexington, A.M. Best Rated A XV, and Lexington will also continue to provide the majority of capacity in the $22.5M x/s $2.5M layer, with Lloyd's of London, A.M. Best Rated A XV, as its quota-share partner. Excess limits up to $1,000,000,000 will be placed with London, Bermudian, European and U.S Domestic markets, all A.M. Best Rated at least of A- VII. Members should note several key highlights for this year's renewal: • Boiler & Machinery for participating members of the APIP Boiler Program maintained • Cyber (Privacy Liability) Coverage for both 1st and 3rd parties from the Beazley Syndicate at Lloyd's, Best Rated A XV, (for those members eligible) with some improvements in coverage as outlined on the following summary • Pollution Coverage for both 1^' and 3'^'' parties from ACE - Illinois Union Insurance Company, Best Rated A++ XV, (for those members eligible) with some improvements in coverage as outlined on the following summary Alliant Business Services (ABS) will continue to play a significant role not only in providing various types of loss control services, but also in providing appraisal services. For the 2015-2016 policy year property valuations will continue to be a key focus. As a reminder, it is underwriters' intent to have all buildings with a scheduled value of $5,000,000 or more appraised once every five years. This service is included in the total annual cost. Members may also choose to have lower valued buildings appraised. The cost to have all or specific buildings appraised between $25,000 and $5,000,000 will be quoted at the time the request is made. The following table depicts key statistics relative to last year: Citv of Carlsbad 14-15 (at 02/19/2015) 15-16 Variance Total Insured Values: $ 183,887,789 $ 238,027,107 29.44% Account Rate (per hundred dollars): 0.0630139 0.0652276 3.51% Earthquake TIV: $ 0 $ 0 N/A Earthquake Limit: Not Covered Not Covered N/A *Total Annual Cost: $ 115,874.87 $ 155,259.40 33.99% * TOTAL COST includes: all premiums (except Cyber Enhancement option, if purchased), underwriting fees, commissions, loss control expenses, program administration charges, and applicable taxes Thank you for your continued support of APIP. We look forward to working with you this next year, know if you have any questions about your Renewal Proposal. Please let us Page 1 of 6 2015-2016 Alliant Property Insurance Program (APIP) Executive Summary City of Carlsbad ALLIANT PROPERTY INSURANCE PROGRAM (APIP) Coverage 2014 - 2015 2015 - 2016 Pending APIP Coverage Documents All references to "Member(s)/Entitv(ies)" or where the word "Member" is referenced and not directly associated to a JPA or Pool The word "Named Insured" or "Named Insured(s)" has replaced the words "Member(s)/Entity(ies)" or where the word "Member" is referenced throughout all APIP coverage documents and is not associated to a JPA or Pool Clarification Specific Limits of Liability and Individual Member Terms and Conditions Specific Limits of Liabilitv and Individual Member Terms and Conditions To the extent there exists any discrepancy between the limits and/or sublimits described below and the Certificates of Insurance or Insurance policies, the Policies shall control. We recommend that vou carefiiUv review the Certificates or Policies for a complete list of limits and sublimits. Limits of Liability To the extent there exists any discrepancy between the limits and/or sub^limits described below and the Declaration Paee or Insurance policies, the Declaration Paee or Policies shall control. Clarification All Risk Limit of Liability Per Occurrence: all Perils, Coverages (subject to policy exclusions) and Insureds/Members combined, subject to the following per occurrence and/or aggregate sub- limits as noted Per Occurrence: all Perils, Coverages (subject to poiicv exclusions) and all Named Insureds (as defined in the poiicv) combined, per Declaration, reeardless of the number of Named Insureds, coveraees, extensions of coveraee, or perils insured, subiect to the following per occurrence and/or aggregate sub-limits as noted below. Clarification Sub-Limits of Liability as respects: Boiler Explosion and Machinery Breakdown For members that purchase coveraee see schedule on file with Alliant Insurance Services Boiler Explosion and Machinery Breakdown, (for those Named Insuredls that purchase this optional dedicated coverage) as respects Combined Property Damage and Business Interruption/Extra Expense (Including Bond Revenue Interest Payments where Values Reported and excluding Business Interruption for power generating facilities unless otherwise specified). Limit includes loss adjustment agreement and electronic computer or electronic data processing equipment with the following sub-limits Boiler Explosion and Machinery Breakdown, (for those Named Insureds that purchase this optional dedicated coverage) as respects Combined Property Damage and Business Interruption/Extra Expense (Including Bond Revenue Interest Payments where Values Reported and excluding Business Interruption for power generating facilities unless otherwise specified). Limit includes loss adjustment agreement and electronic computer or electronic data processing equipment with the following sub-limits Clarification Primary Terrorism USD 100,000,000 per Member /Entity Per Occurrence subject to USD200,000,000 Annual Aggregate of Declarations 1-14, IS- il, 25-30 and 32- 34 combined as respects Property Damage, Business Interruption, Rental Income and Extra Expense Combined for Terrorism (Primary Layer} USD 100.000.000 per Named Insured Per Occurrence subject to USD200,000,000 Annual Aggregate of Declarations 1-14, IS- il, 25-30 and 32- 34 combined as respects Property Damage, Business Interruption, Rental Income and Extra Expense Combined for Terrorism (Primary Layer} Clarification Page 2 of6 2015-2016 Alliant Property Insurance Program (APIP) Executive Summary City of Carlsbad ALLIANT PROPERTY INSURANCE PROGRAM (APIP) Coverage 2014 - 2015 2015 - 2016 Pending Excess Terrorism Per Occurrence, All Members combined in Declarations 1-9, 11, 12, 13, 14, 19, 20,21, 26, 27, 28, 30, 32, 33 and 34 for Terrorism (Excess Layer) subject to; Annual Aggregate shared by all Members/Entities Insureds combined in Declarations 1-9, 11-14, 18-22, 25-30 and 32- 34, as respects Property Damage, Business Interruption, Rental Income and Extra Expense combined for Terrorism (Excess Layer) Per Occurrence, All Named Insureds combined in Declarations 1-9, 11-14, 18-22, 25-30 and 32-34 for Terrorism (Excess Layer) subject to; Annual Aggregate shared by all Named Insureds combined in Declarations 1-9, 11-14, 18-22, 25-30 and 32-34, as respects Property Damage, Business Interruption, Rental Income and Extra Expense combined for Terrorism (Excess Layer) Clarification Deductible as respects: Basic All Risk 'Basic' All Perils and Coverages, except for those referenced in Specified Perils or Coverages Deductible(s) and Special Terms & Conditions as set forth below: Unspecified "Basic" or "All Risk" Perils and Coveraees Deductible (Meanine for perils not referenced in the "Specified Perils or Coveraees Deductible(s)" or "Special Terms & Conditions" as set forth below): Clarification Deductible as respects: JPA / Pool Maintenance Deductible Maintenance Deductible after Annual Aggregate Deductible is reached. Maintenance deductible does not apply to those items listed in the Deductibles for Specific Perils and Coverages or Special Terms section below Pool Maintenance Deductible applicable to each occurrence after the Annual Aggregate Deductible is reached. The specific deductibles for Flood. Earthquake and Wind will always applv to losses caused bv those perils regardless if it is ereater or less than the Pool Maintenance Deductible. The maintenance deductible does not apply to those items listed in the Deductibles for Specific Perils and Coverages or Special Terms section below if those perils did not erode the annual aeeregate deductible. Clarification Deductible as respects: All Risk Deductible (Other): $10.000 Minimum subiect to $100,000 Maximum per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractors Equipment Per Occurrence and Annual aeereeate and shared bv all members of this Declaration for the peril of Earthquake for members who do not purchase dedicated Earthquake limits $10,000 Per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractors Equipment subject to $100,000 Maximum Per Occurrence, Per Named Insured for the peril of Earthquake for Named Insured(s) who do not purchase dedicated Earthquake limits Enhancement Deductible as respects: All Risk Deductible (Other): $10.000 Minimum subiect to $100,000 Maximum per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractor's Equipment Per Occurrence and Annual Aegregate and shared bv all members of this Declaration for the peril of Flood for members who do not purchase dedicated Flood limits $10,000 Per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractor's Equipment subject to $100,000 Maximum Per Occurrence, Per Named Insured for the peril of Flood for Named Insured(s) who do not purchase dedicated Flood limits Enhancement Deductibles as respects: All Risk Deductible (Other): 2.5% of Annual Tax Value per Location for Tax Interruption 2.5% of Annual Tax Revenue Value per Location for Tax Interruption Clarification Page 3 of 6 7 2015-2016 Alliant Property Insurance Program (APIP) Executive Summary City of Carlsbad ALLIANT PROPERTY INSURANCE PROGRAM (APIP) Coverage 2014 - 2015 2015 - 2016 Pending APIP Reinsurance Named Insured coverage wording Not previously listed on Named Insured's specific coverage documents Coverage wording added under "Special Terms": As a Reinsurance placement in no circumstance will the coverages, terms, conditions, limits, sub-limits, deductibles, exclusions or endorsements be extended or broadened by the Named Insured's Memorandum of Coverage or underlying insurance documents. Clarification Master Policy Form Wording Policy Term July I, 2014 to July 1,2015 July I, 2015 to July 1,2016 Renewal item PEPIP Master Policy Form All references to "Member(s)/Entitv(ies)" or where the word "Member" is referenced and not directly associated to a JPA or Pool The word "Named Insured" or "Named InsuredfsV' has replaced the words "Member(s)/Entity(ies)" or where the word "Member" is referenced and not associated to a JPA or Pool throughout the Master Policy Form 11 Clarification Section I, Item B. Named Insured As per Declaration page and its member(s), entity(ies), agency(ies), organization(s), enterprise(s) and/or individual(s) for whom the Named Insured is required to provide coverage, as so named in the "Named Insured - Member Schedule" attached to this poiicv and/or on file with Alliant Insurance Services, Inc., as their interests may appear which now exist or which hereafter may be created or acquired and which are owned, financially controlled or actively managed by the herein named interest, all jointly, severally or in any combination of their interests, for account of whom it may concern. Per Declaration page all Named Insureds listed in the Declaration Schedule Addendum attached to this policy. Member(s), entity(ies), agency(ies), organization(s), enterprise(s) and/or individual(s) for whom the Named Insured is required or has aereed to provide coverage, or as so named in the "Named Insured Schedule" on file with Alliant Insurance Services, Inc., as their interests may appear which now exist or which hereafter may be created or acquired and which are owned, financially controlled or actively managed by the herein named interest, all jointly, severally or in any combination of their interests, for account of whom it may concern, are covered within the limits Terms and Conditions provided to the individual Named Insured's limits. Clarification Section I, Item C. Mailing Address of Insured C. Mailing Address of Insured C. Mailing Address of Named Insured Clarification Section I, Item E. Limits of Liability I. SPECIFIC LIMITS OF LIABILITY The Specific Limits of Liability as described in the Declaration Page apply per occurrence unless indicated otherwise. I. LIMITS OF LIABILITY The Specific Limits of Liability as described in the Declaration Page apply per occurrence unless indicated otherwise. Clarification Page 4 of 6 g 2015-2016 Alliant Property Insurance Program (APIP) Executive Summary City of Carlsbad ALLIANT PROPERTY INSURANCE PROGRAM (APIP) Coverage 2014 - 2015 2015 - 2016 Pending Section II, Item B. 22. Terrorism Coverage a. USD 100,000,000 per member(s) / entitv(ies) of declaration number I-I4,18-21. 25- 30 and 32-34 per occurrence subject to USD200,000,000 in the annual aggregate which shared by all member(s) / entity(ies) of declaration numbers I-I4, 18-21. 25-30 and 32- 34 combined; and a. USD 100.000.000 per Named Insured(s) of Declaration number 1;14, 18- 22, 25- 30 and 32-34 per occurrence subject to USD200,000,000 in the annual aggregate which shared by all Named Insured(s) of Declaration numbers I-14, 18-22, 25-30 and 32- 34 combined; and Clarification Section II, Item C. 6. Property Not Covered Power transmission lines, feeder lines and undereround pipes more than 1,000 feet from the premises of the Insured unless specifically approved by the Company. Removed "Underground pipes" from #6 Added #7: Underground pipes more than 1,000 feet from the premises of the Insured unless specifically approved by the Company. Clarification Section II, Item C. 7. Property Not Covered 7. Unscheduled tunnels, bridges, dams, catwalks (except those not for public use), roadways, highways, streets, sidewalks, culverts, streetiights, and traffic signals, excess of the sub-limit terms provided on the Declaration Page. 8. Unscheduled tunnels, bridges, dams, catwalks (except those not for public use), roadways, highways, streets, sidewalks, culverts, streetlights, and traffic signals, excess of the sub-limit terms provided on the Declaration Page. Clarification Section II, Item C. 8. Property Not Covered 8. Offshore property, oilrigs, underground mines, caverns and their contents. Railroad track is excluded unless values have been reported by the Insured. 9. Offshore property, oilrigs, underground mines, caverns and their contents. Railroad track is excluded unless values have been reported by the Insured. Clarification Section IV, ItemB. 19. Exclusions Fines, penalties or cost incurred or sustained by the Insured or imposed on the Insured at the order of any Government Agency, Court of other Authority, in connection with any kind or description of environmental impairment including seepage or pollution or contamination from any cause. Fines, penalties or cost incurred or sustained by the Insured or imposed on the Insured at the order of any Government Agency, Court or other Authority, in connection with any kind or description of environmental impairment including seepage or pollution or contamination from any cause. Clarification Section IV, Item D. Territorial Limits This Policy insures Real and Personal Property within the United States. Personal Property is extended to Worldwide coverage. The coverage provided by this clause for Personal Property is sublimited to USD as per Declaration Page. This Policy insures Real and Personal Property within the United States of America. Personal Property is extended to Worldwide coverage. The coverage provided by this clause for Personal Property is sub-limited to USD as per Declaration Page. Clarification Section IV, Item M. Subrogation This Policy shall not be prejudiced by aereement made bv the Insured releasing or waiving the Insured's rights to recovery against third parties responsible for the loss if made before the loss has occurred. Notwithstanding the above wording, the insured has the right to enter into an agreement that releases or waives the Insured's right to recovery against third parties responsible for the loss if made before the loss occurred. Notwithstanding the above wording, the insured has the right to enter into an agreement that releases or waives the Insured's right to recovery against third parties responsible for the loss if made before the loss occurred. Clarification Page 5 of 6 2015-2016 Alliant Property Insurance Program (APIP) Executive Summary City of Carlsbad ALLIANT PROPERTY INSURANCE PROGRAM (APIP) Coverage 2014-2015 2015-2016 Pending Section IV, Item AE. Service of Suit Clause (USA) Applicable to Excess Carriers Messre Mendes and Mount of 750 Seventh Avenue, New York NY 10019 6829 (applicable to all markets except as noted below) FLWA Service Corp, c/o Foley and Lardner LLP, 555 Califomia Sfreet, Suite 1700. San Francisco. CA 94104-1520 (applicable to all markets except as noted below) Update Section IV, Item 6 Tier I Windstorm Counties The following items in the next column are not currently listed in the Master Policy Form Wording 10 State Tier I Counties, Parishes or Independent Cities Clarification Section IV, Item 6 Tier I Windstorm Counties The following items in the next column are not currently listed in the Master Policy Form Wording 10 Florida All Counties Clarification Section IV, Item 6 Tier I Windstorm Counties The following items in the next column are not currently listed in the Master Policy Form Wording 10 Hawaii All Counties Clarification Section IV, Item 6 Tier I Windstorm Counties The following items in the next column are not currently listed in the Master Policy Form Wording 10 Louisiana Assumption Clarification Section IV, Item 6 Tier I Windstorm Counties The following items in the next column are not currently listed in the Master Policy Form Wording 10 Virginia Charles City, New Kent, Prince George and Sussex Clarification Hospital All Risk Property Program Specific policy endorsements provided for Hospital All Risk Property Program Declarations Hospital All Risk Property Proeram Master Policy Form 11 created Enhancement Pollution Liability Coverage A Summary of Pollution Liability is included with the Coverage Proposal Enhancement Page 6 of 6 o