Loading...
Exhibit 1 - Agenda Information SheetCity of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance CFO: Antonio Puente, Jr. DATE: December 17, 2019 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing, and approving the purchase of Excess Liability Insurance Coverage for the City of Denton, through the City’s sole broker of record, McGriff, Seibels, and Williams of Texas, Inc., and in accordance with Chapter 252.024 of the Texas Local Government Code such coverage is exempt from the requirements of competitive bidding; and providing an effective date (File 7264 - awarded to Argo Group International Holdings Ltd., in the three (3) year not-to-exceed amount of $755,000). INFORMATION /BACKGROUND The City of Denton’s current excess liability insurance policy includes all liability exposures (general, auto, public officials, law enforcement, and employment practices) through Illinois Union Insurance Company (Chubb). This policy was secured effective December 31, 2015 through the marketing efforts of our sole broker of record, McGriff, Seibels, & Williams (McGriff), in accordance with Chapter 252.024 of the Texas Local Government Code. The City has a $750,000 per occurrence Self-Insured Retention (SIR) under this policy with insurance coverage up to $5,000,000 on all liability exposures. Although the City is self-funded for our liability exposures, and relies on the immunities and damage caps contained in the Texas Tort Claims Act (TTCA), there are several areas that do not fall under the TTCA, and therefore, the City has potentially unlimited liability: • Law Enforcement Liability – the City potentially has no limits for liability claims alleging violations of Civil Rights due to police activity. These claims could stem from charges of wrongful arrest/detention, unlawful search and seizure, deprivation of Civil Rights, and excessive force. • Electric Utility Operations – by definition, the operation of a public utility by a municipality, in this case the operations of Denton Municipal Electric (DME), are considered to be proprietary functions and are excluded from any immunities or damage caps provided under the TTCA. Any operation of DME that resulted in property damage, injury, or death could have the potential for a claim with unlimited liability. • Employment Practices Liability – in many cases these types of claims contain an allegation that the Civil Rights of an employee, or of a prospective employee, were violated, so no limit on liability applies. Examples of these types of claims could include discrimination, harassment, violations of the Americans with Disabilities Act (ADA), and/or the Family Medical Leave Act (FMLA). City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com Although these claims are not commonplace, the City has settled employment related claim in the past. Because of these exposures, the City has purchased the excess policy to provide an added layer of protection to our self-funded program. We had been fortunate to maintain a reasonably low SIR of $500,000 per occurrence for many years. The excess insurance marketplace had gone through some major changes prior to the marketing effort in 2013, and the lowest SIR we could obtain was $750,000. 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 such products are exempt from the requirements of competitive bidding, the City utilized the services of our sole broker of record, McGriff, to assist us in procuring this coverage without going through the Request for Proposal (RFP) process. Over the past several months, McGriff has been actively engaged in the global excess market on behalf of the City of Denton. In 2013, the excess insurance market had “hardened” significantly which meant that annual premiums for this product had increased significantly, and many insurance carriers had left the market entirely. As a result, McGriff received responses from four (4) excess liability insurance companies. A comparison of the proposals is detailed below: Argo Group - $239,433 Gemini - $250,950 Illinois Union (Chubb) - $259,245 Safety National - $236,778 (please note that Safety National will only provide the excess liability insurance if they also provide the excess workers’ compensation insurance – see File #7263). All terms, conditions, and policy limits proposed by the companies meet or exceed the City’s current policy. The detailed proposals from all four (4) companies can be found in Exhibits 2 through 5. Based on the evaluation of the proposals, both staff and our broker of record, McGriff, recommend the purchase of excess liability insurance from the Argo Group with the $500,000 SIR, for an annual premium of $239,433. While the quote from Safety National is $2,655 lower than Argo’s quote, as stated above Safety will only provide this coverage if they also provide the excess workers’ compensation coverage, and staff does not feel they have the best proposal. The City’s account will be services out of the office located at 5080 Spectrum Drive, Suite 900E, Addison, TX 75001. Argo Group is headquartered in San Antonio, Texas. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) In December of 2015, the City Council awarded a contract for Excess Liability Insurance to McGriff, Seibels & Williams with coverage placed with Illinois Union Insurance Company. RECOMMENDATION Award a contract with Argo Group International Holdings Ltd., for the purchase of Excess Liability Insurance Coverage for the City of Denton, in a three (3) year not-to-exceed amount of $755,000. PRINCIPAL PLACE OF BUSINESS Argo Group International Holdings Ltd. San Antonio, TX ESTIMATED SCHEDULE OF PROJECT This is a three (3) year contract. FISCAL INFORMATION These services will be funded from Excess W/C Insurance account 860002.6719. The budgeted amount for this item is $755,000. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Argo Group Proposal for Excess Liability Exhibit 3: Gemini Proposal for Excess Liability Exhibit 4: Illinois Union (Chubb) Proposal for Excess Liability Exhibit 5: Safety National Proposal for Excess Liability Exhibit 6: Broker Recommendation Letter Exhibit 7: Ordinance Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Cassandra Ogden, 940-349-7195. Legal point of contact: Mack Reinwand at 940-349-8333.