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R-88-1166 - 9/22/1988WHEREAS, the City of Round Rock has duly advertised for bids to provide total insurance coverage for the City, and WHEREAS, the Texas Municipal League has submitted the lowest and best bid, and WHEREAS, the City Council wishes to accept the bid of the Texas Municipal League to provide insurance coverage for the City, Now Therefore, % BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the bid of the Texas Municipal League is hereby accepted as the lowest and best bid, and the Mayor is hereby authorized and directed to execute on behalf of the City a contract with the Texas Municipal League to provide insurance coverage for the City. RESOLVED this day of September, 1988. ATTEST: NE LAND, City Secretary C32RESINSUR RESOLUTION NO. //We- MIKE ROBINSON, Mayor City of Round Rock, Texas Coverages: PROPERTY (81000 deduct) AUTO ($1000 deduct) LIABILITY (81000 deduct) $64,764.79 881,092.00 : 500,000 aggreg. MOBILE EQUIPMENT $1000 deductible $5000 deductible WORKER'S COMPENSATION UMBRELLA LIABILITY • EMPLOYEE DISHONESTY $1000 deductible • no quote $5000 deductible no quote E & 0 LIABILITY TOTALS: Smallest Excludes • Bidders:: A & A : EMPLOYERS Penco : CASUALTY Kevin Mabus : Gene Landry 1 -736 -4311 467 -5426 Jim Gresham 329 -6611 • $34,555.00 829,339.00 no flood : No valu.papers $1 M CSL deductible: W.C. SEPTEMBER, 1988 COMPARISON OF INSURANCE BIDS SUBMITTED • • • • LAW ENFORCEMENT LIABILITY: $1000 deductible $5000 deductible no quote 83.5 • $5.5 $69,705.00 $2,846.00 $1,552.00 $56,769.61 $67,371.38: M total $2 M total M total : $13,427.85 $2000 deduct. . 855,833.00 $3,518.00 $3,052.00 $1,233.00 $966.00 $38,120.00 $217,566.00 $20,740.00 $5000 deduct. : ROUND ROCK Trinity Sue Hoover 255 -3172 $123,004.00 no flood $18,124.00 : 500,000 aggreg. : no deduct. : no EB liability • $54,640.00 no deduct.Bl /PD no quote . $30,014.00 $32,814.00 $5 M total $7 M total no quote • $34,322.64: ▪ no quote $32,569.85 * $39,178.00 : 500,000 aggreg. • occurrence occurrence $276,390.89. $269 - 053.00 : $233,227.00 no quote =tea= = =-- =m a :== __ = =a =_ =_ v $206 070.42 $21r7;G27.00 : No Dishonesty Ins.: *Premium for : No E & 0 : $5,000 deductible: No Law Enforc.Liab: incl.in total . • : ROUND ROCK :TX.MUNI.LEAGUE Marinco J & H Sue Hoover : Wendy Simms 255 -3172 : 800- 323 -3592 : 713 - 651 -1900 • $907.00 no deduct. no quote • • • • $55,668.00 $60,668.00: $5 M total $6 M total . $9,594.70 $3000 deduct. . $37,629.72 $35,129.30 • claims made $54,487.00 $20,152.00: no flood : $2500 deduct. • $59,465.00 $48,536.00: $1 M aggreg. :500,000 aggreg : no deduct. :no EB liability • 862,758.00 $52,706.00: : no deduct.BI /PD . • $6,467.00 $5,561.00 $1,490.00: $5,163.00: no quote $1,428.00: 8978.00 $924.00: $762.00: no quote $728.00: , 8192,430.00: • • $ 26,481.00:- $3 M total • • $17,970.00: $10,000 deduct.: $40,000.00: $36,775.00: $49,368.00:* 3M coverage claims made :$1,000 deduc. • EVALUATION OF INSURANCE BIDS RECEIVED CITY OF ROUND ROCK SEPTEMBER, 1988 Dr. Jerry D. Todd R. S. Merrill, Sr. After review by Round Rock staff and approval by the City Council, bid specifications were made available to prospective bidders beginning Wednesday, June 29, 1988. Coverage was sought for a wide variety of property - liability risks facing the City of Round Rock, including workers' compensation. Quotes were requested on the following coverages: PROPERTY: buildings and contents mobile equipment employee dishonesty LIABILITY: comprehensive general automobile liability and physical damage worker's compensation errors and ommisions (public officials) law enforcement liability umbrella liability Alternative quotes were requested so that the City could consider the cost savings of different deductibles. Bids were originally due on August 15 but were extended to September 8 to give insurance underwriters more time. Five overall bids were received from four different agencies on coverages requested (one submitted two different bids): Alexander & Alexander of Texas, Employers Insurance of Texas, Round Rock Insurance, and the Texas Municipal League Self - Insurance Fund through Johnson & Higgins of Houston.. None gave bids for all coverages exactly as requested; only two provided worker's compensation bids. A one -page summary comparing all bids is provided. 2.. SYNOPSIS OF BIDS RECEIVED (See the charts showing bids for each coverage) The following is a short summary of the key characteristics of each of the bids received. ALEXANDER & ALEXANDER OF TEXAS Person Bidding: Kevin Mabus 1. Most of the coverage bid is offered through a special program of the Hartford Insurance Companies for cities and written through a managing general agency -- PENCO. 2. No worker's compensation bid. 3. No employee dishonesty bid. 4. No flood insurance bid. 5. Total liability limits (including general & umbrella) offered: $3.5 and $5.5 million. E & 0 Liability has $2000 deductible. EMPLOYERS CASUALTY COMPANY Person Bidding: Gene Landry 1. All coverages bid with some deviations. 2. No valuable papers coverage under property 3. Total liability limits offered: $2 million, including general and umbrella. 4. E & 0 and Law Enforcement Liability offered through National Casualty, with $5000 deductibles on each. 3 ROUND ROCK INSURANCE TRINITY COMPANIES Person Bidding: Sue Hoover 1. No worker's compensation bid. 2. No E & 0 Liability bid. 3. No Law Enforcement Liability bid. 4. No flood insurance bid. 5. No Employee Benefit Liability coverage bid. 6. Total liability limits offered: $5 and $7 million. 7. No deductibles under general or auto liability. 8. Property bid is over twice the next highest bid! 9. General liability bid is almost one -third next lowest bid! 10. The main problem with this bid is that there is no E & 0 or Law Enforcement liability coverage offered. These are expensive and hard to get policies that other insurers will not write alone. 11. Volunteer Fire coverages, however, re included in the bid, even for out -of -City exposure. ( *ce ' ROUND ROCK INSURANCE RELIANCE INSURANCE GROUP (MARINCO) Person Bidding: Sue Hoover 1. No worker's compensation bid. 2. No flood insurance bid. 3. No deductibles on general and auto liability coverages. 4. Total liability limits offered: $5 and $6 million. 5. E & 0 Liability has $3000 deductible. 6. A fairly complete bid, but the price is high. 4 r1 4 F# TEXAS MUNICIPAL LEAGUE Person Bidding: Wendy Simms 1. No Employee Benefit Liability bid. 2. Property coverage has a $2500 deductible. 3. E & 0 Libility has $10,000 deductible. 4. Total liability limits offered; $3 million. 5. The most complete bid, and the price is clearly the lowest. 6. Coverages are provided by a self - insurance fund which is reinsured with General Reinsurance, a financially strong reinsurer with a strong international reputation. ANALYSIS AND RECOMMENDATIONS (See the Summary Comparison Chart) Based on our evaluations of bids received, we recommend that the bid of the Texas Municipal League Self- Insurance Fund be accepted. In this case, they are the current insurer and so the problems normally associated with switching insurers are avoided. While the property deductible is $2500 rather than $1000, TML's property bid is otherwise complete, including flood coverage denied in most other bids, and it is priced significantly lower than all other bids. The mobile equipment bid is also significantly lower than all the rest, and the employee dishonesty bid is almost lowest (it is for a relatively insignificant amount, as well). TML's bid for general liability coverages (General, Auto, & Umbrella) is 30 percent or more lower than all other bids except that for Trinity Companies. But Trinity offers NO E & 0 or Law 5 Enforcement Liability coverages, and these coverages would not be available as stand -alone coverages at any reasonable cost. Also, Trinity's property bid is over six times that of TML's. One weakness of the TML program is the lack of employee benefit liability (for such things as improper handling of employee benefits, misinformation given to employees, etc.). TML's bid for Law Enforcement Liability is close to the others. It is lower than Employer's, and slightly higher than both A & A's and Marinco's. The E & 0 bid also is lower than Employer's but higher than the other two bids received, and has a higher deductible. These two coverages cannot be written alone, however, and TML's bid is not unreasonable in comparison with the others. We recommend that the lower deductibles be taken in all cases quoted. The savings in premium does not warrant the additional risk associated with the higher deductibles. For property insurance, the savings is only about $1000; for general liability about $4,400; for auto about $2,500; for law enforcement liability about $1200; and for E & 0 about $2000 to jump to a $25,000 deductible. Not counting E & 0, the total savings would only be about $9000. DATE: September 20, 1988 SUBJECT: Council Agenda, September 22, 1988 ITEM: 12C. Consider a resolution authorizing the Mayor to enter into a contract for City insurance. STAFF RESOURCE PERSON: David Kautz STAFF RECOMMENDATION: Accept the bid proposed of Texas Municipals League (TML) ECONOMIC IMPACT: The City accepted bids for insurance coverage for the following primary coverages: General Liability Property Auto Property /Liability Police Professional Liability Errors & Omissions Umbrealla Policy (provides limits above other policies) Workers Compensation Five bids were received from: Texas Municipal League (TML) Round Rock Insurance (submitted 2 bids) Alexander and Alexander Employer's Casualty These bidders represented the major markets available to the City. An analysis of these bids is attached with the recommendation to accept the TML bid for all coverages.for a total annual premium of $217,627. TML currently provides all City insurance. The bid received will represent an estimated annual savings of $75,000 over our current rate. This savings has been made possible by bidding the "soft" insurance market period.