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HomeMy WebLinkAboutExhibit 1 - Agenda Information SheetCity of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement ACM: Christine Taylor DATE: September 22, 2026 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule corporation, providing for, authorizing, and approving the purchase of excess workers’ compensation, packaged general liability, and automobile physical damage insurance coverage for the City of Denton, through the City’s sole broker of record Lockton Companies, LLC; providing for the expenditure of funds therefor; and providing an effective date (File 9098 – awarded to Safety National, in the one (1) year not-to-exceed amount of $1,426,746.00). STRATEGIC ALIGNMENT This action supports Key Focus Area: Support Healthy and Safe Communities. INFORMATION/BACKGROUND The City of Denton currently has packaged insurance policies to provide coverage for excess workers’ compensation and liability exposures (general, auto liability, public officials, law enforcement, and employment practices). The City of Denton’s general liability insurance policy included all liability exposures through Safety National Insurance Company (Safety National) with a $500,000 per occurrence self-insured retention (SIR) under this policy and coverage up to $5,000,000 on all liability exposures. The City’s excess workers’ compensation insurance policy through Safety National Insurance included a $1,000,000 per occurrence SIR and insurance coverage up to the statutory benefit levels under workers’ compensation. The City of Denton’s automobile physical damage insurance for the City’s fleet vehicles with values over $100,000 through Safety National will expire on October 1, 2026. Commercial automobile liability insurance provides coverage for bodily injury and property damage caused to others by City vehicles. In contrast, commercial automobile physical damage insurance provides coverage for City vehicles that sustain damage from vehicle accidents, the negligence of an uninsured or underinsured motorist, damage caused by weather, and other non-collision causes. Given the complexities of this insurance product solicitation as described in greater detail below, and given that Chapter 252.024 of the Texas Local Government Code provides that the City can utilize the services City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com of our broker of record, Lockton, to assist with competitively procuring this coverage, the City elected to work with our broker of record to complete this solicitation. State of the Market For this renewal, Lockton approached the incumbent carrier, Safety National, as well as three (3) competing markets: Travelers, Sentry, and Old Republic. The casualty lines of insurance include General Liability, Auto Liability, Public Officials Liability, Law Enforcement Liability, Auto Physical Damage, and Excess Workers’ Compensation. Safety National presented terms on all renewing lines, which are competitive in the liability insurance marketplace today. Safety National offered a flat rate renewal on the Excess Workers’ Compensation policy, and a 4% rate reduction on the liability lines, when using the City’s payroll as the exposure basis. Auto Physical Damage (Comprehensive & Collision) premium is up 66% this year, which is largely driven by a 37% increase in exposures (vehicle values). In an effort to control costs, Safety National offered alternative structures, which do not generate a fair premium credit for the additional risk that would be self- insured. As part of Safety National’s Casualty offering, they afford the City $15,000 in Risk Control Funds to utilize during the policy period. Travelers, Sentry, and Old Republic declined to quote the business in 2026. Safety National presented renewal terms on all renewing lines for a total premium of $1,097,497 (including an optional Terrorism Risk Insurance Act - TRIA surcharge of $1,485). Maintaining coverage with Safety National ensures continuity, proven claims handling processes, and stability with a carrier that has consistently supported the City’s needs. Policy Period Annual Premium Commercial Auto Physical Damage Insurance $329,041 Public Entity Excess Retained Limit Liability Insurance 492,393 Excess Workers’ Compensation 276,063 30% Contingency 329,249 Total $1,426,746 Staff recommends the approval of expenditures for the purchase of excess workers’ compensation, packaged general liability, and automobile property damage insurance coverage, including funding to accommodate a 30% contingency for any additional premium due after annual payroll audits. RECOMMENDATION Award a contract with Safety National, for the purchase of excess workers’ compensation, packaged general liability, and automobile physical damage insurance coverage for the City of Denton, through the City’s sole broker of record, Lockton Companies LLC, in a one (1) year not-to-exceed amount of $1,426,746. PRINCIPAL PLACE OF BUSINESS Lockton Companies, LLC Kansas City, MO ESTIMATED SCHEDULE OF PROJECT This is an annual policy that renews on October 1, 2026, with the option to continue coverage with the same terms year over year. FISCAL INFORMATION These services will be funded from Risk Retention Fund 860002.6719 for Excess Workers' Compensation and Risk Retention Fund 860002.6704 for General Liability Casualty Package. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Quotes Exhibit 3: Marketing Summary Exhibit 4: Premium Comparison Exhibit 5: Recommendation Letter Exhibit 6: Ordinance Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Tiffany Harris, 940-349-7822. Legal point of contact: Leah Bush at 940-349-8333.