Item 7.A - PROPOSAL with LEXINGTON 4-1-14
City of Boynton Beach
100 E. Boynton Beach Blvd.
Boynton Beach, FL 33435
PROPOSAL OF INSURANCE
PRESENTED BY:
Judy A. Arenz, CPCU, Area Senior Vice President
Tom Gill, CIC, MBA, CRM, Area Assistant Vice President
Agnes Polom, AAI, Senior Account Manager
Arthur J. Gallagher Risk Management Services, Inc.
One Boca Place, 2255 Glades Road, Suite 200E
Boca Raton, FL 33431
Phone: 561-995-6706
www.ajgrms.com
Date Presented:
March 20, 2014
Revised:
March 26, 2014
CITY OF BOYNTON BEACH
TABLE OF CONTENTS
DescriptionSection
Executive Summary.............................................................................................................1
Service Team.......................................................................................................................2
Property –Municipality.......................................................................................................3
Property –Utilities...............................................................................................................4
Public Entity Excess Insurance Program.............................................................................5
Excess Workers’Compensation..........................................................................................6
Crime....................................................................................................................................7
Miscellaneous Lines……………………………………………………………………….8
Changes and Developments.................................................................................................9
Premium Summary............................................................................................................10
Claims Reporting Procedures............................................................................................11
Carrier Ratings and Admitted Status.................................................................................12
Signatures Required...........................................................................................................13
Client Authorization to Bind
TRIEA
UM / Uninsured Motorists
Surplus Lines Disclosure
Vehicle Supplemental Application
Statement of Values
Appendix............................................................................................................................14
Bindable Quotations, Marketing Highlights and Compensation Disclosure Schedule
Important Disclosures
Supplemental Commission Disclosure
MAP Brochures
Specimen Policy -BRIT
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXECUTIVE SUMMARY
Arthur J. Gallagher Risk ManagementServices, Inc. and your Service Team have prepared this
proposal of insurance for renewal of your program effective April 1, 2014.
Property
-Municipality
-Utility
Public Entity Excess Liability
Excess Workers’ Compensation
Crime Insurance
Inland Marine
Boiler & Machinery
Tenant User Liability (TULIP)
State of the Property Market -Florida
The Florida Cat property market has seen a softening environment. Key Factors for this
downward pressure include:
Favorable Carrier Results
2013 US insured property CAT losses of $12.8B were far less than prior years;
o
Global insured CAT losses were $31B
2013 Combined ratio estimated to be 95.8% down from 100+ over last several
o
years.
2013 Atlantic hurricane season delivered the fewest hurricanes since 1982.
o
Reduction in Reinsurance Costs
1/1/14 reinsurance renewals were down reportedly 15-20%
o
New Carriers and Capacity Expansion of a Few Existing Markets
Alternative Capital Infusion in to the CAT Property market segment
RMS v13.0 Resulted in Improved Modeling Results for FL CAT Exposed Property
Schedules
The release of RMS v13 brought significant improvements to projected probable
o
maximum loss (PML) and annual average loss (AAL) estimates for FL based
clients.
1
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXECUTIVE SUMMARY
(Continued)
State of the Market –Casualty
Last year, we were successful in replacing the Meadowbrook (Star) program which withdrew entirely
from the market. The Casualty insurance market is somewhat stable with moderate increases based
on changes in exposure.
Florida Workers Compensation
The Excess Workers’Compensation insurance market has presented challenges to Florida insureds.
Essentially, after many years of overall rate reductions, we are seeing a significant tightening of this
market. Althoughthis line of coverage is intended to respond to infrequent, but very large losses, certain
trends are now resulting in more “large” claims than expected, which are entering the insured layer. Some
of these trends include:
Newer, higher-cost treatments, which are more prevalent, and which are expected to have a
major impact on today’s claims, in the future.
More use of prescription medications for injured employees.
Medical inflation.
Little to no investment income, due to the economy, that could otherwiseoffset insurance
company losses.
General inflationary expectations due global economic conditions.
These trends are now manifesting themselves in insurance company combined ratios that are exceeding
100%, which means that claims and expenses have been greater than the premiums that insurers have
been collecting. In addition, since 2011, we have seen some insurers significantly reduce their writings or
leave the market entirely. For the carriers that continue to offer this coverage, there remains uncertainty
as to the adequacy of retention levels and pricing for this coverage.
Because of this, insureds across the state, are receiving renewal quotes that require higher retentions,
and/or higher premiums. And, since more historically “smaller” claims are nowbecoming “large” claims,
the market challenges are affecting all insureds, regardless of their individual loss experience.
2
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXECUTIVE SUMMARY
(Continued)
2014 Goals and Objectives
Total Cost of Risk -the number one priority is to control cost and develop a program that maintains a
reasonable level of coverage to meet the requirements of the Stafford Act and protect the City’s
assets.
Provide a full proposal on all lines of coverage as requested by the RFP
Provide property catastrophic modeling to assist in evaluating loss limits
Apply updated values per appraisals
Continue broad Casualty coverage including Automobile Liability and Physical Damage
Review options for higher Physical Damage deductible
Continue to attend claim reviews and provide the City with Claims Advocacy and assistance in the
management of claims
Provide Loss Control support as needed
Risk Management Services
BRIT –Free Risk Management Services
Brit Global Specialty USA SIR Package clients receive access –at no cost –to the TEAM platform, a
self-directed risk management LMS platform which purchased individually would cost approximately
$30,000 annually. The TEAM platform is a robust online resource offering:
Unlimited training courses from a list of approximately 135 courses covering areas such as
Employment Practices Liability, fundamental of safety, leave-related laws, workplace risk
management, human resources, and student related risks.
Weekly training bulletins and articles about new and/or updated matters of interest.
Comprehensive model handbook.
Self-guided human resources assessments.
Built-in management tools (LMS) to track and run reports on usage (e.g., completion of
training).
Customizability to: have your logo on the landing page…upload your own policies and
procedures…determine the access levels for all users.
Much, much more –all free of charge to you –just contact your retail producer or Brad Bohler to
establish a secure username and password or visit www.britinsuance.com/teamfor additional
information.
These services are an extension of BRIT Global Specialty’s partnership with our clients. We recognize
the need for customized risk management tools, and we proudly provide the TEAM platform to you with
our compliments to help you manage risk.
3
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXECUTIVE SUMMARY
(Continued)
Safety National -Value-Added Risk Control Services
Through our MAP Client Services, Safety National offers various resources to help policyholders
improve their risk management, analysis and prevention efforts. Typically provided complimentary to
the policyholder, these services and resources are designed to help improve workplace safety, prevent
injuries before they occur and measure/analyze the success of risk management programs. We are
constantly adding risk control offerings designed specifically for the public sector.
S:ERVE
S:ERVE is an online driver simulation and curriculum created to educate law enforcement, firefighters
and EMS personnel to drive at their safest in emergency response scenarios to help reduce collision
rates.
4
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXECUTIVE SUMMARY
(Continued)
Recommended Renewal Program:
2012-20132013-20142014-20152014-2015
Option(4)
Municipal Property:
Loss Limit$100,001,133$101,782,806$97,932,276$90,000,000
$10,000,000$10,000,000$10,000,000$10,000,000
Named Storm Limit
Utilities Property:
$91,772,153$91,772,153$62,370,298$63,370,298
Loss Limit
$30,000,000$30,000,000$30,000,000$30,000,000
Named Windstorm Limit
Exposures
Total Insurable Values:
Municipality$100,001,133$101,782,806$97,932,276$97,932,276
Utilities$91,772,153$91,772,153$62,370,298$63,370,298
Premium
Municipality$644,000.00$669,822.00$519,788.00$500,000.00
(1)(1)
Taxes, Assessments and Fees$45,876.00$46,207.00$12,519.62$11,504.00
Municipality Total$689,876.00$716,029.00$532,307.62$511,504.00
Utilities$278,276.00$292,119.00$197,000.00$197,000.00
Taxes & Fees$6,724.00$6,723.00$6,111.00$6,111.00
Engineering Fee$4,000.00$4,000.00$4,000.00$4,000.00
Utility Total$289,000.00$302,842.00$207,111.00$207,111.00
Public Entity Excess Liability$175,500.00$220,200.00(2)$210,700.00$210,700.00
Excess Workers’ Compensation Included$105,188.00$123,586.00$123,586.00
Required Fees, Taxes & Assessments$2,281.50$ 2,862.60$2,739.10$2,739.10
Public Entity Excess Liability Total$177,781.50$328,250.60$337,025.10$337,025.10
Crime Insurance$2,500.00$2,500.00 $2,500.00$2,500.00
Required Fees, Taxes & Assessments $32.50 $32.50$32.50$32.50
Crime Insurance Total$2,532.50$2,532.50$2,532.50$2,532.50
Grand Total$939,190.00$1,349,654.10$1,078,976.22$1,058,172.60
Miscellaneous Lines(3)10/1/13-10/1/1410/1/13-10/1/14
Boiler & Machinery$7,240.00$7,240.00
Taxes & Fees$94.11$94.11
Boiler & Machinery Total$7,334.11$7,334.11
Inland Marine –Hull$7,171.00$7,171.00
Taxes & Fees$93.22$93.22
Inland Marine –Hull Total$7,264.20$7,264.20
TULIP -Deposit Premium$5,045.00$5,045.00
FL Fees$66.00$66.00
TULIP Total$5,111.00$5,111.00
Notes of Importance:
(1)
Broker Fee paid to Ascensionis included
(2)
Premium annualized to include Automobile Liability and Physical Damage
(3)
Miscellaneous Lines renew on October 1, 2014. The City may elect to move the effective date to April 1, 2014.
Total InsuredValues are based on the City’s Appraisal
Payrolls have increased, but policy rates remain flatfor Excess Workers’ Compensation
(4)
Lexington Insurance Company optional quotation for the Municipality
5
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXECUTIVE SUMMARY
(Continued)
Notes of Importance (Continued)
Overall program cost reduced by $270,678or 20%
Property program provides dedicated limits of insurance to Municipal and Utility assets
separately
Property limits are not sharedwith members such as; Pools or Trusts
This program compliments the City’sself-insured structure, allowing the City to control retention
levels, claims handling and management
Your Gallagher team provides hands on support for:
Day-to-day Consulting
o
Program Management
o
Claims Advocacy
o
Loss Control
o
Recommendation:
Arthur J. Gallagher recommends renewal of the City’s insurance program as follows:
Property insurance program as proposed. The City may elect to purchase a loss limit of
$50 million, as no one location exceeds this amount in values for the Municipal exposures.
Thepremium savings is $25,575.00.
Public Entity Excess Liability program as proposed. The City may elect to increase the
deductible for Automobile Physical Damage from $10,000 to $25,000. The premium savings is
$14,000.
Excess Workers’ Compensation as proposed.
Miscellaneous Lines expire in October of 2014. The City may elect to extend coverage to 2015
or have the policy rewritten with an effective date of April 1, 2014. The cost would be prorated
for the six (6) month term.
6
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC.
About Your Broker –Arthur J. Gallagher Risk Management Services, Inc.
Arthur J. Gallagher Risk Management Services, Inc.and the City of Boynton Beachhave worked
together to provide a comprehensive and cost effective solution to the City’s Risk Management
Program
One of thelargest broker in the world
A public company traded on the New York Stock Exchange for over 25 years
Over 200 offices throughout the United States and in all major insurance market centers
Over $5 billion worth of premiums placed worldwide
Over 11,000employees worldwide linked together by Gallagher “On-Line” for immediate access to
market information and client solutions
Known nationally as the Public Entity and Scholastic experts
Gallagher’s Public Entity & Scholastic Division
MISSION STATEMENT
Our mission is to bring unsurpassed value to Public Entity and Scholastic organizations in their
endeavor to reduce their cost of risk.
We will accomplish this mission by:
Being more knowledgeable of their business than anyone
Providing high quality consultative services
Delivering high level specialized resources
Driving innovation to serve their needs
Hiring the best resources and talent to deliver better services
Actively investing in our own professional skills and capabilities
Educating the marketplace on public risk organizations
Finding new markets and capital to transfer risk effectively
Leverage our extensive expertise for the benefit of all our clients
By accomplishing these objectives, we will be recognized as the broker of choice for Public Entity &
Scholastic organizations.
7
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC.
(Continued)
Gallagher’s Public Entity & Scholastic Division
Gallagher’s Public Entity & Scholastic Divisionrepresents the largest segment of business within
Gallagher’s property and casualty brokerage.
Over 200 employees in 28 branch offices throughout the country.
The niche practice was created to formalize Gallagher’s commitment to public entities and public
scholastic organizations.
Access to ALL major insurance markets throughout the world that write public sector accounts.
Gallagher’s vision as an industry leader is to provide highest level of risk management services to
public entities and scholastic organizations.
We accomplished being an industry leader by being knowledgeable of our customer’s business,
by investing in resources to provide innovative and high quality consultative services and
products and by hiring excellent talent.
Shared resourcesavailable to all Gallagher niche members throughout the country.
Our Florida Public Entity and Scholastic Position
Over 40 professionals specializing in the public sector in three branches throughout the state.
Number One Florida Public Entity & Scholastic Broker
19Accounts with property schedules over
$1 billion in insurable values.
Market access and leverage with all major carriers that write public sector in Florida
Extensive knowledge and experience in public sector alternative risk and pooling programs
Number One Florida Retail Commercial Property Surplus Lines agent placing over
$200 Million in premium for Florida based risks.
Gallagher has specialized resources on staff available to our public sector clients in the area of
claim advocacy and loss prevention.
Our staff has extensive experience in handling Florida catastrophic windstorm claims.
8
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
SERVICE TEAM
The primary servicing responsibility for your company will be by Judy Arenz. We operate on a team
approach. Your team consists of:
Tom Gill
Judy A. Arenz
Area AssistantVice President
Area SeniorVice President
Agnes Polom
Aimee Bell
Senior Account Manager
Sr. Technical Assistant
David L. Marcus
Area Chairman
Bart Douglas
Jim Smith
Maria Tueros
Area Vice President, Claims
Director, Risk Control ServicesClaims Advocate
Our office hours are Monday through Friday, 8:30 a.m. to 4:30 p.m. During other times, your calls
will be received by our voice mail system. Your recorded calls will then be returned during business
hours.s
Judy ArenzTom GillAgnes Polom
Office:561-995-6706 561-995-6706 561-995-6706
Direct Line:561-998-6780 561-998-6812 561-998-6799
Fax:561-995-6708 561-995-6708 561-995-6708
E-mail:judy_arenz@ajg.com tom_gill@ajg.comagnes_polom@ajg.com
9
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Option # 1)
Carrier:Ironshore Specialty Insurance Group , First Specialty Insurance
Corp, Lloyds of London
Policy Limit: $10,000,000
Carrier:
Lloyds of London, International Insurance Co of Hannover Ltd,
Ironshore Europe Ltd.
Policy Limit:$37,932,276 Excess of $10,000,000
Carrier:Sompo Japan Insurance Co of America
Policy Limit:$50,000,000 Excess of $47,932,276
Total Insured Values:$97,932,276
Locations Insured:As per the schedule on file with the company and as submitted by
Risk Placement Services, Inc.
Perils Insured:Special Cause of Loss including flood and earthquake, excluding
equipment breakdown
Coverage:Real and personal property, electronic data processing,
miscellaneous equipment, radio equipment, dumpers, police
equipment, boats, lifepaks, business income including extra
expense and as more fully defined in the policy
Coinsurance:NIL
Valuation:Replacement Cost
Actual Cash Value –Old Boynton High School
Actual Loss Sustained Business Income
Deductibles:$50,000 Per Occurrence All Other Perils
Flood:$ 100,000Per Occurrence Flood except:
With respects to locations wholly or partially within Special Flood
Hazard Areas (SFHA), areas of 100 year flooding, as defined by the
Federal Emergency Management Agency (if these locations are not
excluded elsewhere in this policy with respect to the peril of Flood),
the deductible shall be 5% of the total values at the time of loss at
each location involved in the loss, subject to a minimum of
$1,000,000 per occurrence.
With respects to Flood as a result of a Named Storm, the deductible
shall be 5% of the total values at the time of loss or damage at each
locations involved in the loss or damage, subject to a minimum of
$250,000 per occurrence.
Windstorm:5%Of the total values at the time of loss or damage at
each location involved in the loss or damage, subject
to a minimum of $250,000 per occurrence Named
Windstorm
$100,000 per occurrence All Other Windstorm
10
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Sub-limits$ 5,000,000Flood, Annual Aggregate
(per occurrence unless $ 5,000,000Earthquake, Annual Aggregate
noted otherwise and are $10,000,000Named Windstorm
part of not in addition to $ 3,488,713BusinessIncome including Extra Expense
the policy limit)$ 2,500,000or 25% of loss, greater, of Debris Removal
$ 500,000Accounts Receivable
2 WeeksCivil Authority
$ 1,000,000Building Ordinance
$ 1,000,000Demolition
$ 1,000,000Increased Cost of Construction
$ 100,000Spoilage
$ 1,000,000Errors and Omissions
180 DaysExtended Period of Indemnity
$ 250,000Fine Arts
$ 2,500Fire DepartmentService Charges
$ 1,000,000Ingress/Egress –2 weeks
$ 500,000Leasehold Interest
$ 25,000Pollution, Annual Aggregate
$ 1,000,000Miscellaneous Unnamed Locations
$ 2,000,000Newly Acquired Property –90 Days
$ 25,000Service Interruption –48 Hours Waiting Period
$ 25,000Transit
$ 500,000Valuable Papers
$ 50,000Outdoor Property except $10,000Trees, Shrubs, Plants,
subject to $250 any one tree, shrub or plant
$ 10,000Personal Effects -$5,000 per person
$ 25,000Property Off Premises
$ 2,500Fire Extinguisher Recharge
$ 1,000Lock Replacement
$ 5,000Reward Reimbursement
$ 2,500Inventory and Appraisal of Loss
$20,000Signs
$ 10,000Property of Others
$ 500,000Mold, Annual Aggregate, as a result of a covered loss
There is no recovery under the excess policy as respects those coverages
which are sublimited within the primary and/or underlying excess
policy(ies), however, the excess policy recognize that the primary and
underling excess policy limits can be eroded or exhausted, wholly or
partially, by application of said sublimits.
Remarks:Vacancy Clause is deleted in regard to old Boynton High School
11
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Terms, Conditions&FIRST SPECIALTY INSURANCE COMPANY
Exclusions:
Applicable ISO Forms
Schedule of Forms and Endorsements
Occurrence Limit of Liability –110% Margin Clause
Nuclear, Chemical and Biological Exclusion
Below Grade Property Exclusion
Hurricane Minimum Earned Premium Provision
Certificates Wording
War and Military Action Exclusion
Reimbursement of Master Key Costs
IRONSHORE INSURANCE SERVICES, LLC
Co-Insuring Participation Form
Occurrence Limit of Liability Endorsement –110% Margin Clause
Pollution, Contamination, Debris Removal Exclusion
Defined Peril Millennium Endorsement
Office of Foreign Assets Control (OFAC) Disclosure Notice
Mold/Fungus Exclusion
Data Corruption Exclusion
Special Catastrophe Earned Premium Provision
War and TerrorismExclusion
Earthquake Limitation
Joint Loss Agreement
TRIA Sunset Clause
35% Minimum Earned Premium
CERTAIN UNDERWRITERS @ LLOYDS, LONDON,
INTERNATIONAL INSURANCE CO OF HANNOVER LTD,
IRONSHORE EUROPE LTD
Property Declarations –Participating
Contract Allocation Endorsement
Florida Surplus Lines
Named Storm Exclusion
Certain Underwriters at Lloyds Syndicate List
SLC-3 (USA)
Sanction Limitation and Exclusion Clause
Applicable Law (USA)
Florida Guaranty Act Notice
Florida Rates and Forms Notice
Excess Follow Form Insuring Agreement (AmWins Special Risk)
Occurrence Limit of Liability –110% Margin Clause
12
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Terms, Conditions&CERTAIN UNDERWRITERS @ LLOYDS, LONDON,
ExclusionsINTERNATIONAL INSURANCE CO OF HANNOVER LTD,
(Continued):IRONSHORE EUROPE LTD (Continued)
Electronic Data Recognition Exclusion
War and Terrorism Exclusion
Biological or Chemical Materials Exclusion
Radioactive Contamination Exclusion Clause PD –Direct
Land, Water and Air Exclusion
Seepage and/or Pollution and./or Contamination Exclusion
Debris Removal Endorsement
Asbestos Endorsement
Electronic Data Endorsement B
Flood (storm surge) Exclusion (follow form of primary definition)
Earth Movement Exclusion (follow form of primary definition)
Named Windstorm Exclusion (follow form of primary definition)
Boiler & Machinery Exclusion
Application of Sublimits
Anti-Stacking Clause
35% Minimum Earned Premium subject to Hurricane Minimum
Earned Premium Clause
Mold Exclusion
U.S. Terrorism Risk Insurance Act of 2002 as amended New &
Renewal Business Endorsement
U.S. Terrorism Risk Insurance Act of 2002 as amended not
purchased clause
SOMPO JAPAN INSURANCE CO OF AMERICA
Declaration Page
Signature Page
Excess Follow Form Insuring Agreement (AmWins Special Risk)
Schedule of Taxes, Surcharges or Fees
Disclosure Pursuant to Terrorism Risk Insurance Act
Cap on Losses From Certified Acts of Terrorism
Exclusion of Certified
Acts of Terrorism
Cancellation:
90 days Notice of Cancellation except 10 days for non-payment of
premium
13
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Subject to:
Signed Statement of Values
Inspection Contact Information
Signed terrorism Disclosure
Protective Safeguards Endorsement regarding P-1 Automatic
Sprinkler System and P-2 Automatic Fire Alarm at locations
noted on SOV
Storm Surge is included within the Perils of Flood
Vacancy permit for Old Boynton High School is subject to
building remaining locked and secured, weekly interior and
exterior inspections, building property maintained with working
alarms and fire protection, heat at 55 degrees Fahrenheit to avoid
pipe freezeStorm Surge is included within the Perils of Flood
Premium:$ 519,788.00
MarketFee:$ 500.00
FHCFEA:$ 6,763.74
Citizen’s Assessment:$ 5,202.88
EMPA Policy Fee:$ 28.00
FICA:$ 25.00
TotalAnnualPremium:$ 532,307.62
TRIA Option:$ 50,000.00
(plus Fees)
14
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Option # 2)
Carrier:Lexington Insurance Co
Policy Limit:$90,000,000
Total Insured Values:$97,932,276
Locations Insured:As per the schedule on file with the company and as submitted by Risk
Placement Services, Inc.
Perils Insured:Special Cause of Loss including flood and earthquake, includingequipment
breakdown
Coverage:Real and personal property, Business Income with Extra Expenseand as
further described in the policy form
Coinsurance:NIL
Valuation:Replacement Costas respects Real and Personal Property
Actual Loss Sustained Business Income
Deductibles:$50,000 Per Claim per Occurrence (All Other Perils)
Flood:$ 100,000Per Occurrence Flood except:
With respects to locations wholly or partially within Special Flood Hazard
Areas (SFHA), areas of 100 year flooding, as defined by the Federal
Emergency Management Agency (if these locations are not excluded
elsewhere in this policy with respect to the peril of Flood), the deductible
shall be 5% of the total values at the time of loss at each location involved in
the loss, subject to a minimum of $1,000,000 per occurrence.
100,000 Per Occurrence
Earth Movement:$
Windstorm:$100,000Per Occurrence, except;
5%Of the total insurable values at the time of loss or damage at
each location involved in the loss or damagearising out of a
Named Storm
(a storm that has been declared by the
National weather Service to be a Hurricane, typhoon,
tropical Cyclone, tropical Storm or Tropical Depression)
regardless of the number of Coverages, locations or Perils
involved (including but not limited to , all Flood, wind,
wind gusts, storm surges, tornados, cyclones, hail or rain),
subject to a minimum of $100,000any one occurrence.
If two or more deductible amounts provided in this policy
apply to a single Occurrence, then the Company shall apply
both deductibles to the Occurrence; and
Covered loss or damage by Flood arises out of named
Storm, then the Company shall apply the Flood deductible
or the Named Storm deductible , whichever is greater
15
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
Revised 03/25/2014
(Continued)
Sub-limits/ Per $ 5,000,000Per Occurrence andAnnual Aggregatefor the peril of Earth
Occurrence (are part Movement except;
of not in addition to the Not CoveredPer Occurrence and Annual Aggregate for the peril of Earth
policy limit)Movement in California, Alaska, Hawaii and/or Puerto
Rico
Not CoveredPer Occurrence and Annual Aggregate for the peril of Earth
Movement in New Madrid Earthquake Zone Counties
Not CoveredPer Occurrence and Annual Aggregate for the peril of Earth
Movement in Pacific Northwest Earthquake Zone Counties
$5,000,000Per Occurrence and Annual Aggregate for the peril of
Flood except;
$5,000,000Per Occurrence and Annual Aggregate for the peril of
Flood occurring wholly or partially within Special Flood
Hazard Areas (SFHA), areas of 100-Year Flooding,as
defined by the Federal Emergency Management Agency (if
these locations are not excluded elsewhere in this policy
with respect to the peril of Flood)
Per Occurrence for the peril of Named Storm
$10,000,000(a storm
that has been declared by the National Weather Service to
be a Hurricane, Typhoon, Tropical Cyclone, Tropical Storm
or Tropical Depression) in Florida, regardless of the
number of Coverages, Locations or Perils involved
(including but not limited to, all Flood (however caused)
wind, wind gusts, storm surges, tornados, cyclones, hail or
rain). In the event covered Loss or Damage by Flood arises
out of a Named Storm, the maximum amount the Company
will pay Per Occurrence for all such Loss or Damage by
Flood shall be the Sublimits of Liability for Flood.
$2,500,000 or PerOccurrence for Debris Removal
25% of loss,
whichever is
less
$500,000Per Occurrence for Accounts Receivable
30 days Per Occurrence for Civil or Military Authority
subject to
maximum
$1,000,000
16
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
Revised 03/25/2014
(Continued)
Sub-limits/ Per Not CoveredPer Occurrence and Annual Aggregate for
Occurrence (are part Biological and Chemical and Terrorism
of not inaddition to the $1,000,000Per Occurrence for Contingent Time Element
policy limit)$1,000,000Per Occurrence for Demolition and Increased
(Continued)Cost of Construction: Demolition Coverage A
(for the loss in value of the undamaged portion of
the building as a consequence of enforcement of
an ordinance or law that required demolition of
undamaged parts of the same building)
$1,000,000Per Occurrence for Demolition and Increased
Cost of Construction: Demolition Coverage B
(for the cost to demolish and clear the sire of
undamaged parts of the same building, as a
consequence of enforcement of an ordinance or
law that requires demolition of such undamaged
property)
$1,000,000Per Occurrence for Demolition and Increased
Cost of Construction: Demolition Coverage C
(for the increased cost of repair orreconstruction
of the damaged and undamaged property on the
same or another site, limited to the cost that
would have been incurred in order to comply
with the minimum requirements of such law or
ordinance regulating the repair of reconstruction
of the damaged property of the same site.
However, this Company shall not be liable for
any increased cost of construction loss unless the
damaged property is actually rebuilt or replaced)
$500,000Per Occurrence for Electronic Data and Media\
$100,000Per Occurrence for Spoilage
$1,000,000Per Occurrence for Errors and Omissions
180 DaysExtended Period of Indemnity
$500,000Per Occurrence for Fine Arts
$2,500Per Occurrence for Fire Brigade Charges
30 days subject to Per Occurrence for Ingress/Egress
maximum
$1,000,000
$500,000Per Occurrence for Leasehold Interest
17
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
Revised 03/25/2014
(Continued)
Sub-limits/ Per $25,000Per Occurrence for Annual Aggregate for
Occurrence (are part Limited Pollution Coverage
of not in addition to the $1,000,000Per Occurrence for Miscellaneous Unnamed
policy limit)Locations
(Continued)$2,000,000Per Occurrence for Newly Acquired Property
for a period of 90 days, if not reported to the
Company in that 90 day period then coverage
ceases
Not CoveredPer Occurrence for Ordinary Payroll
Not CoveredPer Occurrence for Professional Fees
$25,000Per Occurrence for Service Interruption. A
qualifying period of 48 hours applies to this
coverage.
$25,000Per Occurrence for Transit
$500,000Per Occurrence for Valuable Papers and
Records
$500,000Per Occurrence for Parked Auto Physical
Damage, excluding over the road exposure
$50,000Per Occurrence for Outdoor Property, except
$10,000 for Trees, Plants, Shrubs, subject to
$250 for any one tree, shrub or plant
$500,000Per Occurrence and Annual Aggregate for Mold
as a result of a named peril
$10,000Per Occurrence for Property of Others
$20,000Per Occurrence for Signs
$2,500Per Occurrence for Inventory and Appraisal of
Loss
$5,000Per Occurrence for Reward reimbursement
$1,000Per Occurrence for Lock replacement
$2,500Per Occurrence for Fire Extinguisher Recharge
$25,000Per Occurrence for Property Off Premises
$5,000Per Occurrence for Personal Effects per person
$50,000,000Boiler and Machinery
18
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –MUNICIPALITY
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Terms, Conditions&
War and Terrorism Exclusion(Unless purchased as an option for
Exclusions:
additional premium of $5000)
Economic Sanctions Exclusion
100% Margin Clause
33 % Minimum Earned Premium
Coverage territory applies to occurrence within the US, its
territories and possessions, Puerto Rico and Canada including their
respective coastal waters.
Cancellation:
90 days Notice of Cancellation except 10 days for non-payment of
premium
Subject to:
Signed Statement of Values
Inspection Contact Information
Signed terrorism Disclosure
35% Minimum Earned Premium
Premium:$500,000.00
FHCFEA:$6,500.00
Citizen’s Assessment:$5,000.00
EMPA Policy Fee:$4.00
TotalAnnualPremium:$511,504.00
TRIA Option:$5,000.00
(plus Fees)
19
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –UTILITIES
APRIL 1, 2014–APRIL 1, 2015
Carrier:ACE American
Policy Limit:$62,370,298any one occurrence
Locations Insured:As per the schedule on file with the company and as submitted by Risk
Placement Services, Inc.
Perils Insured:All Risks of Direct Physical Loss or Damage –covering Property
Damage,Business Interruption, Extra Expense and Boiler & Machinery
Deductibles:$100,000Property Damage Per Occurrence, except
$ 10,000 Well Houses
Flood:5% of the Property Damage Total Insured Value of the damaged
locationsinvolved in the occurrence, subject to a minimum of $500,000
Named Windstorm:5% of the Property Damage Total Insured Value of the locations
involved in the occurrence,subject to a minimum $500,000
Time ElementsBusiness Interruption: 5Days Per Occurrence
(including but not limited Extra Expense: 5 Days Per Occurrence
to):Off-Premises Power: 5 Days Per Occurrence
Application of
As respects real and personal property, all claims for loss, damage or
Deductibles:
expense arising out of any one occurrence shall be adjusted as one
claim and from the amount of each such adjusted claim there shall be
deducted the sum stated on the Declarations Page
Property Damage and Time Element deductibles will be applied
separately.
Sublimits$30,000,000Named Windstorm
(part of and not in $5,000,000Earth Movement Annual Aggregate (Excluding
addition to the policy California)
Limit of Liability)$5,000,000Flood Annual Aggregate, includingStorm Surge
$1,000,000Flood Annual Aggregate (Zone A or V) and all
subzones including Storm Surge
$1,000,000Automatic Coverage
$1,000,000Demolition/Increased Cost of Construction
$500,000Course of Construction
$500,000or 25% of the loss (whichever is greater) for Debris
Removal
$500,000Contractors Equipment
$500,000Unnamed Locations
$250,000EDP Media and Equipment
$250,000Expediting Expense
$250,000Off-Premises Power
$250,000Transit
$250,000Temporary Removal of Property
$100,000Off Premises Foam and Fire Fighting Expense
$100,000Business Interruption
$250,000Extra Expense
$100,000Pollution Cleanup-Real and Personal Property
(Annual Aggregate)
20
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –UTILITIES
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
$100,000Any One Accident Ammonia Contamination
Boiler & Machinery
Sublimits:$100,000Any One Accident Expediting Expense
$100,000Any One Accident Hazardous Substance
$100,000Any One Accident Water Damage
$100,000Any One Accident Consequential Damage
Values:$62,020,298Property Damage (as per Statement of Values)
$100,000Business Interruption
$250,000Extra Expense
$62,370,298Total Insured Values
Conditions:
Coverage and/or Extensions of Coverage not specifically mentioned,
even though they may be outlined in your submission, arenot
included
Business Interruption coverage shall only apply to the main water
treatment locations
72 Hour Occurrence Definition applies to Wind, Flood, Earthquake
and Riot
Transmission and Distribution lines located beyond 1,000 feet of
any insured premises are excluded
Concrete reservoirs and underground pipes and pipelines are
covered at locations covered by this policy
Agreed amount with coinsurance waived
The following Endorsements/Additional Endorsements will attach to
and form part of the policy:
Agreed Amount –PD Endorsement
Agreed Amount –BI Endorsement
Authorities Endorsement
Automatic Coverage (Newly Acquired) Endorsement
Boiler and Machinery Endorsement
Contractors Equipment Endorsement
Earth Movement Endorsement
Electronic Data Processing Endorsement
Extra Expense Endorsement
Flood Endorsement
21
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –UTILITIES
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
ConditionsIncreased Cost of Construction and Demolition Endorsement
(Continued):Millennium Endorsement
Replacement Cost Endorsement
TRIA Endorsement (if coverage is accepted)
Transit Endorsement
Unnamed Location Endorsement
Wind (Named Storms) Definition
Common Policy Conditions
Commercial Property Conditions
OFAC Endorsement
Exclusions
Mold Exclusion
(including but not limited
Political Risk Exclusion
to):
Terrorism Exclusions (if coverage declined)
Biological or Nuclear Exclusion
Data Distortion/Corruption Exclusion
Valuation:
Company’s Liability for loss under this policy for Real and
Personal Property (excluding stock) shall not exceed the smallest
of the following amounts:
1.The amount of this policy
2.The replacement cost of property or any part thereof,
identical with property described herein, at the same location
and intended for the same occupancy and use
3.The amount actually and necessarily expended in repairing
or replacement the property described herein, or any part
thereof, at the same location, or another location, and
intended for the same occupancy and use
4.Actual Cash Value if the property is not repaired or replaced
within2 years
Time Element Coverage –Actual Loss Sustained
Subject to:
Signed Statement of Values to be provided within 30 days of
effective date
Cancellation –90 days except 10 days for non-payment of
premium
22
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPERTY –UTILITIES
APRIL 1, 2014 –APRIL 1,2015
(Continued)
Premium:$197,000.00
Engineering Fee:$ 4,000.00
FHCFEA:$2,561.00
Citizen’s Assessment:$1,907.00
EMPA Policy Fee:$ 4.00
FIGA(Estimated):$1,639.00
TotalAnnualPremium:$207,111.00
TRIAOption:$2,661.00
(plus Fees)
Terrorism / Non Certified:$296.00
(plus fees)
23
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITY CASUALTY PACKAGE
SECTION II -COMPREHENSIVE GENERAL LIABILITY
APRIL 1, 2014 –APRIL 1, 2015
Carrier:Lloyds of London
Limit of Liability$2,000,000 per occurrence excess the self-insured retention
(All Coverages Combined):
Aggregate Limit$6,000,000 Annual Aggregate
(All Coverages Combined):
Premises Medical Payments:$ 5,000 Ground-Up any one person
$10,000 Ground up any one occurrence
Defense Costs:Within the Limit of Liability
Self-Insured Retention:$200,000per Occurrence
Coverage Includes:
Sexual Harassment $2M/$6M
Sexual Abuse $2M/$6M
Coverage Form:Public Entity Package Wording (11/11)-Occurrence Indemnification
Form
Coverage:
Premises/Operations
Product/Completed Operations
Host and/or Liquor Liability
Volunteer Workers
Personal Injuryand Advertising Injury
Fire Legal Liability
EMT’s/Paramedic Liability
Employees and Volunteers as Assureds
Incidental Medical Malpractice
Pollution from Hostile Fire
Property in the Care, Custody, Control
Non-Owned Aircraft
Exclusionsincluding but not
Assault and Battery, except to protect persons or property
limited to:
Ownership, loading or unloading, maintenance, or use of watercraft
over 26 feet in length, except operations performed by independent
contractors
Ownership, loading or unloading, maintenance, or use of aircraft
except operations performed by independent contractors
Property owned by the insured
Asbestos-related claims
Pollution Liability
Nuclear Liability
ERISA
War
Inverse Condemnation, Eminent Domain, Adverse Possession or
Condemnation Proceedings
Terrorism
Mold
24
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITY CASULTY PACKAGE
SECTION III–AUTOMOBILE LIABILITY
APRIL 1, 2014 –APRIL 1, 2015
Carrier:Lloyd’s of London
Limit of Liability:$2,000,000per Occurrenceper occurrence excess the self-
insured retention/ No Aggregate
Liability SIR:$200,000
Limit for Auto Physical $1,000,000
Damage:
Physical Damage SIR:$10,000
Coverage Form:
Public Entity Package Wording (11/11) -Occurrence
Coverages:
Permissive Users
Owned Autos
Hired / Non –Owned Autos
Exclusions
Property owned by the insured
(including but not limited
Employee bodily injuries covered under any Workers’
to):
Compensation or similar law
Racing, demolition contest, or stunting activities
Medical Payments
Uninsured/Underinsured Motorists
No Fault
Terrorism
Mold
Flood & Surface Water
Earthquake
Windstorm
Subject to:
Signed Uninsured Motorists Form
Notes:
This proposalis only a summary of thetermsin the policy. Please review the actual
policy for a complete listing of the terms, conditions and exclusions.
25
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITYCASUALTY PACKAGE
SECTION IV –PUBLIC OFFICIALS
APRIL 1, 2014 –APRIL 1, 2015
Carrier:Lloyd’s of London
Limit of Liability$2,000,000 Per Occurrence excess the self-insured retention
(All Coverages Combined):
Aggregate$4,000,000Annual Aggregate
(All Coverages Combined):
Coverage Form:Public Entity Package Wording –Claims-Made (11/11)
Self-Insured Retention:$200,000 Per Occurrence
Coverage Includes:
Subject to the following sublimits/annual aggregates which are part of
and not in addition to the combined Section IV limit and annual
aggregate:
Errors & Omissions $2M/$4M Annual Aggregate
Employment Practices Liability$2M/$4M Annual Aggregate
Sexual Harassment Liability$2M/$4M Annual Aggregate
Sexual Abuse Liability$2M/$4M Annual Aggregate
Retroactive Date:4/1/2013
Definition of a Claim:Refer to form provided –Refer to form attached
Incident or Claim Refer to form provided –Refer to form attached
Reporting Provision:
Extended Reporting Refer to form provided –Refer to form attached
Period:
Exclusions including but
Intentional breach of contract
not limited to:
Loss resulting from a wrongful act committed prior to the
retroactive date
Any claim brought as a counter claim or cross claim by an assured
against any other assured
Any claim based upon or attributable to the rendering or failure to
render any opinion, treatment, or service unless acting within the
scope of their duties as an assured
Any claim arising out of any pending or prior litigation or hearing,
as well as future claims arising out of any pending or prior
litigation or hearing
26
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITYCASUALTY PACKAGE
SECTION IV –PUBLIC OFFICIALS
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Exclusions including but
Claim, demands or actions seeking relief or redress in any
not limited to:
form other than monetary damages
(Continued)
Terrorism
Mold
Subject to:Sexual Harassment & Sexual Abuse Coverages
Satisfactory policies and procedures to be approved
Confirmation there are no historical losses/incidents
Receipt of satisfactory and completed SexualHarassment
and Sexual Abuse application
Employment Practices Liability
Confirmation that all known EPL/Civil Rights/
Discrimination Incidents/Claims/Pending Litigation have
been reported to current carrier
27
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITY CASULTY PACKAGE
SECTION VI -EMPLOYEE BENEFITS LIABILITY
APRIL 1, 2014 –APRIL 1, 2015
Carrier:Lloyd’s of London
$2,000,000 per occurrence excess the self-insured retention
Limit of Liability:
AggregateLimit:$4,000,000 annual aggregate
Defense Costs:Within the Limit of Liability
Self-Insured Retention:$200,000 per occurrence
Coverage Form:Public Entity Package Wording Claims-Made (11/11)
Exclusions including but
Any negligent acts, errors, or omissions which are
not limited to:
dishonest,fraudulent, criminal, or malicious.
Bodily Injury, Personal Injury, or Property Damage.
Any claim based upon the insureds failure to comply with
ERISA or any similar federal, state, or local law.
Any claim based upon failure of investments, including stocks
and bonds, to perform as represented by the insured.
Loss resulting from any negligent acts, errors or omissions
committed prior to the retroactive date.
Terrorism
Mold
Retroactive Date:4/1/2013
Definition of a Claim:Refer to form provided –Refer to policy form
Incident or Claim Refer to form provided -Refer to policy form
Reporting Provision:
Extended Reporting Refer to form provided -Refer to policy form
Period:
.
28
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITY CASUALTY PACKAGE
SECTION VIII –LAW ENFORCEMENT ACTIVITIES
APRIL 1, 2014 –APRIL 1, 2015
Carrier:Lloyd’s of London/Brit
Limit of Liability:$2,000,000 Per Occurrence excess the self-insured retention
AggregateLimit:$6,000,000Annual Aggregate
Defense Costs:
Within the Limit of Liability
Reimbursement of Defense Costs Incurred Prior to Denial or
Declination of Coverage:
-$10,000 Ground Up any one Assured
-$20,000 Aggregate Per Occurrence
-$50,000 Annual Aggregate
Coverage Form:Public Entity Package Wording (11/11)-Occurrence
Self-Insured Retention:$200,000Per Occurrence
Coverage Includes:
Sexual Harassment $2M/$6M
Sexual Abuse $2M/$6M
Exclusions
Any claim or Suit for Bodily Injury, Property Damage or
including but not
Personal Injury including any award of attorneys fees and
limited to:
costs resulting from:
-Any knowing and intentional violation of any subsection of
Title 42 of the U.S. Code, including but not limited to 42
U.S.C 1981 thru 42 U.S.C. 1989 and 42 U.S.C. 1997
-Any knowing and intentional deprivation of any rights
protected under the United States Constitution or the
Constitution of any State, Territory or Protectorate of the
United States
-Any Act which is not reasonably related to the execution
and/or enforcement of the law
-Any Act committed with the knowledge and intent to cause
Bodily Injury, Property Damage or Personal Injury or
which could reasonably be expected to cause Bodily
Injury, Property Damage or Personal Injury unless the act
of the Assured was reasonably necessary to lawfully
prevent injury to persons or damage to Property
However, this Exclusion shall not apply to any vicarious liability
on the part of the Named Assured arising solely out of an act by
any other Assured resulting from Law Enforcement Activities and
excluded herein, but this provision applies only to the liability of
the Named Assured to pay any settlement, verdict or judgment,
providing that the sole liability imposed on the Named Assured
does not arise from any contractual duty to indemnify an Assured.
29
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITY CASUALTY PACKAGE
SECTION VIII –LAW ENFORCEMENT ACTIVITIES
APRIL 1, 2014 –APRIL 1, 2015
(Continued)
Exclusions
Liability arising out of the ownership, maintenance or use,
including but not
including loading or unloading, of watercraft 26 feet and over
limited to:
Damage to or destruction of Property of the Assured
(Continued)
Liability arising out of the ownership, maintenance, loading or
unloading, use or operations of any aircraft, airfields, runways,
hangars, buildings or other properties in connection with
aviation activities
Any obligation forwhich the Assured may beheld liable under
any Workers’ Compensation, unemployment compensation
disability benefits law, employers liability or under any similar
law or to Bodily Injury to any employee or to any liability for
indemnity or contribution brought by any party for Bodily
Injury to any employee
The cost of any investigation, disciplinary or criminal
proceedings against an individual Assured except that the
Underwriters may, at their own option and expense, associate
counsel in the defense of any such investigation, criminal or
disciplinary proceeding. Should the Underwriters elect to
associate counsel, such elections shall not constitute a waiver
or estoppel of any rights the Underwriters may have pursuant
to the terms, conditions, exclusions andlimitations of this
policy
Any claim arising from Wrongful Acts except as provided
under this Section for Discrimination or Violation of Civil
Rights arising out of Law Enforcement Activities
Any Claim arising out of an intentional breach of contract
.
30
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITYCASUALTY PACKAGE
*Premium
Description
Annual Premium–Minimum and Deposit:$210,700.00
FHCF/Florida Hurricane CAT Fund Emergency Assessment 1.3%:$2,739.10
TOTALANNUALPREMIUM:$213,439.10
Minimum Premium:50% of the gross premium.
No flat cancellations
Forms and Endorsements:
Loss Fund Exclusion
Failure to Supply is excluded
Terrorism Exclusion
TRIA Rejected (TBD)
Security–Underwriters at Lloyds
Minimum Earned Premium
Extension of Medical Director Coverage
Section I property Limitation
Uninsured/Underinsured Motorist Coverage Rejection
Florida PIP Coverage
Section I Auto Physical Damage for Scheduled Vehicles
Non-Waiver of Florida Tort FS 768.28
Binding Requirements/ Subject to:
Signed Authorization to Bind
Signed TRIA accept/reject form
Signed UM/UIM rejection form prior to binding
Gallagher Bassett is the appointed Third Party Administrator.
Terms & Conditions:
Quote based on the 2013 Public Entity wording.
Section II Automobile Physical Damage Valuation is RCV for scheduled vehicles on file with
Underwriters.
Mold coverage is excluded.
Cancellation –At binding, the Assured commits to a Minimum Earned Premium of 50% of
the gross premium. There are no flat cancellations allowed.
*Option:
Increase SIR forAuto Physical Damage to $25,000 for savings of $14,000
31
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PUBLIC ENTITYCASUALTY PACKAGE
(Continued)
Lloyds of London (Brit) Free Risk Management Services:
Brit package clients receive access -at no cost -to the BRIT Insurance TEAMrisk management
platform at Brit's expense (aregular value of at least $30,000 annually). The BRIT Insurance
TEAM platformis a robust online resource offering:
Unlimitedweb-based training courses from a list of approximately 135courses covering areas
such asemployment practices liability, leave-related laws, workplace risk management, human
resources, andyouth-related risks.
Weekly training bulletins and articles about new and/or updated matters of interest.
Comprehensive model handbook.
Self-guided human resources assessments.
Built-in management tools to track and run reports on usage (e.g., completion of training).
Customizability to: have your logo on the landing page ... upload your own policies and
procedures ...determine the access levels for all users.
www.britinsurance.com/team
Much, much more -all free of charge to you -just visit
These services are an extension of Brit's partnership with our clients. We recognize the need for
customized riskmanagement tools, and we provide the BRIT Insurance TEAMplatform to you
with our compliments to help you manage risk.
32
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXCESS WORKERS’ COMPENSATION
APRIL 1, 2014 –APRIL 1, 2015
OPTION
*Revised 03/26/2014
Carrier:
Safety National Casualty Corporation
SpecificLimit:
Part I -Workers Compensation -Statutory
Part II -Employers Liability -$1,000,000 aggregate
per accident
$47,844,862
Estimated Total Payroll:
$1,884,704
Estimated Manual Premium:
*Excess Rate Per $100 of Payroll:.2583
Exclusions included
Punitive, exemplary or compensatory damages
but are not limited to:
Liability assumed under a contract
Bodily Injury to an employee while employed in
violation of law
Bodily Injury intentionally caused or aggravated by you
Self Insured Retention:
$500,000 Each Accident, except $850,000 for Police &
Fire/ Per Occurrence
Audit Terms:Subject to year-end audit
Terms and Conditions include but
Subject to final audit at end of policy term based on
are not limited to:
gross payroll
Includes Claims Expense as part of loss
60 day cancellation notice required of Named Insured
and/or carrier, except 5 day notice by carrier for
nonpayment of premium
Cancellation by Named Insured is subject to the
Minimum and Deposit Premium –100% fully earned
Incidental Longshoremen’s and Harbor Workers
Compensation Act
Maritime Coverage –No Know Exposure
Voluntary Compensation
Same Communicable Disease
Foreign Voluntary WC & EL
including defined Endemic Disease
Endorsements mandated by the coverage state(s) will
automatically be added to your policy regardless of
whether they are shown in the above schedule. In
addition, a change in an endorsement form number may
occur as a result of state filling requirements/updates
arising subsequent to this quote.
33
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
EXCESS WORKERS’ COMPENSATION
APRIL 1, 2014 –APRIL 1, 2015
OPTION
(Continued)
Exclusions include but are
Self-Insurers Assessments
not limited to:
Intentional Torts
Punitive or Exemplary Damages
Bodily Injury to an employee while employed in
violation of law
Damages arising out of coercion, criticism, demotion,
discipline, defamation, harassment or termination of any
employee
Liability assumed under contract
Subject to:
Adjustment at audit
Signed Application
Subject to receipt, review and acceptance of information
contained in SNCC’s Vehicle Supplemental Application
form prior to binding.
MinimumPremium:
$123,586.00
Terrorism Charge:
Included
Total Annual Deposit Premium:
$123,586.00
In the Appendix section of the Proposal we have enclosed information on MAP Client Services
that you will find a useful risk management resource. Most services are offered without charge.
MAP Client Services –This is an online system that we provide all of our policyholders free
access as additional reference for Management, Analysis, and Prevention to complement their
current risk management program. Included in MAP is Safety Essentials, Workers’ Comp Kit,
Safety Training Source, S:ERVE, and Remedy Interactive. For more detailed information, please
review the attached documents.
Best Doctors –The Cat Care program provides in-depth case review by world-renowned doctors
in the event of a catastrophic injury. The Ask Best Doctors program is pro-active, non-
adversarial, consultative medical review by a Best Doctors expert for injured workers at high risk
for adverse developments in their medical condition. We can provide more details if you are
interested in learning more about either of these programs.
34
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CRIME INSURANCE
APRIL 1, 2014–APRIL 1, 2015
Carrier:Hanover Insurance Company
Limits of Liability:$50,000 Employee Theft Per Loss (including
Faithful Performance)
$50,000 Forgery or Alteration
$10,000 Money & Securities (In/Out)
Deductible:$1,000
ExclusionsGeneral Crime Exclusions:
(including but not limited to):
Partners
Governmental Action
Indirect Loss
Legal Expenses
Nuclear
War & Similar Actions
Employee canceled under prior insurance
Inventory shortages
Loss caused by any employee required by law to be
individually bonded
Damages for which you are legally liable as a result of
-The deprivation or violation of the civil rights of any
person by an employee or
-The tortious conduct of any employee except
conversion of property of other parties held by you
in any capacity
Terms & Conditions:
90 day Notice of Cancellation
45 day Notice of Non-renewal
Total Annual Premium*:$2,500.00
FHCFEA (1.3%):$32.50
Total Annual Premium:$2,532.50
*3rdyear ofannual installments
35
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
COVERAGE RENEWED
OCTOBER1, 2013–OCTOBER1, 2014
Boiler & Machinery:
Equipment Breakdown Limit$67,056,963
Property DamageIncluded
Carrier:
Hartford SteamBoiler
Business Income$1,000,000
Deductible:
Extra ExpenseCombined with BI
Service InterruptionCombined with BI
$ 5,000 Direct Coverages
Contingent Business Income$1,000,000
Except Transformers/MEA$1.50
Off Premises Property Damage$1,000,000
Per KVA, $5,000 Minimum
Perishable Goods$1,000,000
ExceptA/C and Refrigeration
Data Restoration$1,000,000
Systems $25.00 Per Horsepower,
Demolition$2,500,000
$5,000 Minimum
Ordinance or Law$2,500,000
Except ICE/Generator units
Expediting Expenses$1,000,000
$25.00 Per KW, $5,000Min.
Hazardous Substances$1,000,000
Indirect Coverages24 Hours
Newly Acquired Locations$5,000,000
Green$25,000
Mold$25,000
Inland Marine / Hull:
Limit(Scheduled Vessels)$176,500
Protection & Indemnity (P & I) Limit$1,000,000
Deductible:
$2,500 per occurrence AOP
5% per occurrence for Wind
P & I combined single limit any one accident or
(subject to $5,000 minimum)
occurrence including all legal costs, fees and expenses
including collision liability
P & I Deductible:
$5,000 per occurrence for Wind
$2,500 per occurrence BI
$2,500 per occurrence All Other
TULIP:
General AggregateNone
Products Completed Operations Aggregate$1,000,000
Personal & Advertising Injury$1,000,000
Each Occurrence$1,000,000
Fire Damage (Any One Fire)$50,000
Medical PaymentsExcluded
Liquor Liability$1,000,000
36
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CHANGES AND DEVELOPMENTS
It is important that we be advised of any changes in your operations that may have a bearing on the
validity and/or adequacy of your insurance. The types of changes that concern us include, but are
not limited to, those listed below:
1.Changes in any operation such as expansion to another state, new products.
2.Mergers and/or acquisition of new companies.
3.Any newly assumed contractual liability, granting of indemnities, or hold harmless
agreements.
4.Circumstances which may require an increased liability insurance limits.
5.Any changesin fire or theft protection, such as the installation of or disconnection of
sprinkler systems, burglar alarms, etc. This includes any alterations to same.
6.Immediate advice of any changes to scheduled equipment such as contractors' equipment,
electronic data processing, etc.
7.Property, of yours that is in transit, unless we have previously arranged for the insurance.
8.Any changes in existing premises including vacancy, whether temporary or permanent,
alterations, demolition, etc. Also, any new premises either purchased, constructed, or
occupied.
Your insurance program will only be as good as the communications maintained between
you and your insurance broker.
Any specific changes or developments not listed above: ____________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
No Changes and/or Developments
Signature: ________________________________________________________________
Title: ____________________________________________________________________
Date: ____________________________________________________________________
37
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PREMIUM SUMMARY
APRIL 1, 2014–APRIL 1, 2015
CoverageRenewing 04/01/2014(Option # 1)Renewal
Property –Utilities$207,111.00
Property –Municipality$532,307.62
Public Entity Excess$213,439.10
Excess Workers’ Compensation$123,586.00
Crime$ 2,532.50
Total Premium$1,078,976.22
Coverage Renewing 04/01/2014 (Option # 2)
Property –Utilities
$207,111.00
Property –Municipality
$511,504.00
Public Entity Excess
$213,439.10
Excess Workers’ Compensation
$123,586.00
Crime
$ 2,532.50
Total Premium$1,058,172.60
CoverageRenewed10/01/2013
Boiler & Machinery$7,334.11
Hull / Inland Marine$7,264.20
TULIP (Deposit Premium)$5,111.00
Total Premium$19,709.31
PremiumsIncludeall fees and assessments
38
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
Notes and Highlights:
1.Premiums for the above policies are due and payable as billed, in full or as insurance
company installments. Premiums may be financed, subject to acceptance by an approved
finance company. Note: Following acceptance, completion (and signature) of a premium
finance agreement with the specified down payment is required.
2.Quotes are valid until 4/1/14
Gallagher is responsible for the placement of the following lines of coverage:
Property, Boiler & Machinery, Excess Public Entity, Excess Workers’ Compensation, Crime,
Inland Marine,TULIP, Commercial Hull/PI and Excess Auto
It is understood that any other type of exposure/coverage is either self-insured or placed by
another brokerage firm other than Gallagher. If you need help in placing other lines of coverage
.
or covering other types of exposures, please contact your Gallagher representative
Arthur J. Gallagher Risk Management Services, Inc. has made every attempt to identify and bill all
State of Florida taxes and assessments. Given recent market events, we are not able to guarantee the
complete accuracy of these billings until the policies are issued because of recent legislature changes
therefore additional billings may be applied.
39
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CLAIMS REPORTING INSTRUCTIONS
PROPERTY
When and where do you report a claim?
Claims are to be reported as soon as practicable to:
PROPERTY –MUNICIPALITY
Email:apolom@ajg.com
PROPERTY -UTILITIES
Mr. Jim Jezewski, Vice President and Claims Manager
Starr Technical Risks Agency, Inc.
Property Claims Departent
th
Floor
399 Park Avenue, 9
New York, NY 10016
Tel: (646) 227-6348
Fax: (631) 685-3061
Email: jim.jezewski@cvstarrco.com
or
Mr. Will Wood, Assistant Vice President
Tel: (404) 946-1436
Fax: (404) 946-1498
Email: william.wood@cvstarrco.com
CRIME
When and where do you report a claim?Claims are to be reported immediately and reported directly to:
Agnes Polomat Arthur J. Gallagher
Risk Management Services, Inc.
EXCESS PUBLIC ENTITY
When and where do you report a claim?Claims are to be reported immediately and reported directly to:
BRIT Insurance Services, Inc.
Email: USA.claims@britinsurance.com
EXCESS WORKERS’ COMPENSATION
When and where do you report a claim?Claims are to be reported immediately and reported directly to:
Safety National
1832 Schuetz Road
St. Louis, MO 63146
Fax: 314-995-3897
Email: first.report@safetynational.com
Excess Reporting Requirements:The following injuries should be reported immediately:
Fatalities
Paraplegics and quadriplegics
Serious burns, defined as 2nd or 3rd degree burns involving
25% or more of the body
Brain injury
Spinal cord injury
Amputation of a major extremity
Any occurrence which results in a serious injury to two or more
employees
If you experience anydifficulty in Phone, fax or email to Arthur J. Gallagher Risk Management
reporting claims directly to carrier:Services, Inc.
Phone: 561-998-6799
Fax: 561-995-6708
Email: agnes_polom@ajg.com
40
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CARRIER RATINGS AND ADMITTED STATUS
Proposed CarriersA. M. Best’s RatingAdmitted / Non-Admitted
Lloyd’s of LondonA+ XVNon-Admitted
Ironshore Specialty Insurance CoA XIVNon-Admitted
First Specialty Insurance CorporationA+ XVNon-Admitted
International Insurance Co of HannoverA+ XVNon-Admitted
Ironshore Europe LtdA XIVNon-Admitted
Sompo Japan Insurance of AmericaA+XVNon-Admitted
Lexington Insurance CoA XVNon-Admitted
ACE AmericanA+ XVAdmitted
Hanover Insurance CompanyA XIVAdmitted
Safety National Casualty Corp.A XIAdmitted
If the above indicated coverage is placed with a Non-Admitted Carrier, the carrier is doing business in the state as a
surplus lines or non-admitted carrier. As such, this carrier is not subject to the same regulations which apply to an
admitted carrier nor do they participate in any insurance guarantee fund applicable in that state.
*
The above A.M. Best Rating was verified on the date the proposal document was created.
Guide to Best Ratings
Rating Levels and Categories
Financial Size Categories
LEVELCATEGORY
A++, A+Superior
(In $000 of Reported Policyholders’ Surplus Plus
A, A-ExcellentCdiil R Fd)
FSC IUp to 1,000FSC IX250,000 to
B++, B+Good
500000
FSC II1,000 to 2,000FSC X 500,000 to
B, B-Fair
750000
FSC III2,000 to 5,000FSC XI 750,000 to
C++, C+Marginal
1000000
FSC IV5,000 to 10,000FSC XII1,000,000 to
C, C-Weak
1250000
DPoor
FSC V10,000 to 25,000FSC XIII 1,250,000 to
Under Regulatory 1500000
FSC VI25,000 to 50,000FSC XIV1,500,000 to
E
Supervision
2000000
FSC VII50,000 to 100,000FSC XV2,000,000 or
FIn Liquidation
FSC VIII100,000 to 250,000
SSuspended
Best’s Insurance Reports,published annually by A.M. Best Company, Inc., presents comprehensive reports on
the financial position, history, and transactions of insurance companies operating in the United States and
Canada. Companies licensed to do business in the United States areassigned a Best’s Rating which attempts to
measure the comparative position of the company or association against industry averages.
A Best’s Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing
insurance obligations. It is not a warranty of a company’s financial strength and ability to meet its obligations to
policyholders. View the A.M. Best Important Notice: Best’s Credit Ratings for a disclaimer notice and
complete details at http://www.ambest.com/ratings/notice.
Best’s Credit Ratings are under continuous review and subject to change and/or affirmation. For the latest
Best’s Credit Ratings and Best Credit Reports (which include Best Ratings), visit the A.M. Best website at
. See Guide to Best’s Credit Ratings for explanation of use and charges. Copies of the
http://www.ambest.com
Best’s Insurance Reports for carriers listed above are also available upon request of your Gallagher
representative.
41
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CARRIER RATINGS AND ADMITTED STATUS
(Continued)
Best’s Credit Ratings reproduced herein appear under license from A.M. Best and do not constitute, either
expressly or impliedly, an endorsement of (Licensee’s publication or service) or its recommendations, formulas,
criteria or comparisons to any other ratings, rating scales or rating organizations which are published or
referenced herein. A.M. Best is not responsible for transcription errors made in presenting Best’s Credit
Ratings. Best’s Credit Ratings are proprietary and may not be reproduced or distributed without the express
written permission of A.M. Best Company.
Gallagher companies use A.M. Best Company’s rating services to evaluate the financial condition of insurers
whose policies we propose to deliver. Gallagher companies make no representations and warranties concerning
the solvency of any carrier, nor does it make any representation or warranty concerning the rating of the carrier
which may change.
42
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
43
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CLIENT AUTHORIZATION TO BIND
Client Name: City of Boynton Beach
After careful consideration of your proposal dated March 26, 2014, we accept your insurance
program subject to the following exceptions/changes:
Please check the desired coverages:
Property –UtilitiesExcess Public Entity
$62,370,298Policy Limit$25,000SIR on PD/Auto Option
Terrorism / TRIAAsPerExpiring
Terrorism / TRIA
Property –Municipality
$97,932,276Policy Limit
Terrorism / TRIAExcess Workers’ Compensation
$500,000/$850,000 SIR
$90,000,000 Policy Limit
Terrorism / TRIA
Crime
AsPerExpiring
Provide Quotations or Additional Information on the Following Coverage Considerations
YesNoCyber Liability
It is understood this proposal provides only a summary of the details; the policies will contain the
actual coverages.
We confirm the values, schedules, and other data contained in the proposal are from our records
and acknowledge it is our responsibility to see that they are maintained accurately.
We agree that your liability to us arising from your negligent acts or omissions, whether related
to the insurance or surety placed pursuant to these binding instructions or not, shall not exceed
$20 million, in the aggregate.Further, without limiting the foregoing, we agree that in the event
you breach your obligations, you shall only be liable for actual damages we incur and that you
shall not be liable for any indirect, consequential or punitive damages.
By:
SignatureSpecify: owner, partner or corporate officer
Print Name
Date:
44
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
SURPLUS LINES DISCLOSURE AND ACKNOWLEDGEMENT
Arthur J. Gallagher Risk Management Services, Inc.
At my direction, has placed my coverage in the
surplus lines market. As required by Florida Statute 626.916, I have agreed to this placement.I
understand that superior coverage may be available in the admitted market and at a lesser cost and that
persons insured by surplus lines carriers are not protected by the Florida Insurance Guaranty Association
with respect to any right of recovery for the obligation of an insolvent unlicensed insurer.
I further understand the policy forms, conditions, premiums, and deductibles used by surplus lines
insurers may be different from those found in policies used in the admitted market. I have been advised to
carefully read the entire policy.
CITY OF BOYNTON BEACH
Named Insured
Signature of Insured’s Authorized RepresentativeDate
ALL BOUND ON FILE (SEE ATTACHED SCHEDULE)
Name of Excess & Surplus Lines Carrier
PROPERTY / CASUALTY
Type of Insurance
04/01/2014
Effective Date of Coverage
45
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
PROPOSAL DISCLOSURES
The following disclosures are hereby made a part of this proposal. Please review these disclosures prior to signing
the Client Authorization to Bind or e-mail confirmation.
Proposal The proposal is an outline of certain terms and conditions of the insurance proposed by the insurers,
Disclaimerbased on the information provided by your company.It does not include all the terms, coverages,
exclusions, limitations and/or conditions of the actual policy contract language.The insurance policies
themselves must be read for those details.Policy forms for your reference will be made available
upon request.
We will not be operating in a fiduciary capacity, but only as your broker, obtaining a variety of
coverage terms and conditions to protect the risks of your enterprise.We will seek to bind those
coverages based upon your authorization; however, we can make no warranties in respect to policy
limits or coverage considerations of the carrier.Actual coverage is determined by policy language, so
read all policies carefully.Contact us with questions on these or any other issues of concern.
Compensation One of the core values highlighted in The Gallagher Way states, “We are an Open Society,” and our
Disclosureopen society extends to the compensation Gallagher receives. For more information on Gallagher’s
compensation arrangements, please visit http://www.ajg.com/compdisclosure. In general, Gallagher
may be compensated as follows:
Gallagher Companies are primarily compensated from the usual and customary commissions or fees
received from the brokerage and servicing of insurance policies, annuity contracts, guarantee contracts
and surety bonds (collectively “insurance coverages”) handled for a client’s account, which such
commissions and fees may vary from company to company and insurance coverage to insurance
coverage. As permitted by law, Gallagher companies occasionally receive both commissions and fees.
In placing, renewing, consulting on or servicing your insurance coverages, Gallagher Companies may
participate in contingent commission arrangements withintermediaries and insurance companies that
provide for additional contingent compensation if underwriting, profitability, volume or retention
goals are achieved. Such goals are typically based on the total amount of certain insurance coverages
placed by Gallagher with the insurance company and/or through the intermediary, not on an individual
policy basis. As a result, Gallagher may be considered to have an incentive to place your insurance
coverages with a particular insurance company.
Gallagher Companies may also receive investment income on fiduciary funds temporarily held by
them, such as premiums or return premiums.
Gallagher Companies may access other facilities, including wholesalers, reinsurance intermediaries,
captive managers, underwriting managers and others that act as intermediaries for both Gallagher and
other brokers in the insurance marketplace.
Gallagher Companies may own some of these facilities, in whole or in part. If such a facility was
utilized in the placement of a client’s account, the facility may have earned and retained customary
brokerage commission or fees for its work.
Gallagher assists its customers in procuring premium finance quotes and unless prohibited by law may
earn compensation for this value added service.
If you have specific questions about the compensation received by Gallagher and its affiliates in
relation to your insurance placements, please contact your Gallagher representative for more
details. In the event you wish to register a formal complaint regarding compensation Gallagher
receives from insurers or third parties, please send an e-mail to
Compensation_Complaints@ajg.com or send a letter to:
AVC Compliance Officer
Arthur J. Gallagher & Co.
th
Floor
Two Pierce Place, 20
Itasca, IL 60143
47
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
Proposal Disclosures
(Continued)
Terrorism Act If this proposal contains options to purchase TRIA/TRIPRA coverage, the proposed
DisclaimerTRIA/TRIPRA program may not cover all terrorism losses.While the most recent legislation
eliminated the distinction between foreign and domestic acts of terrorism, a number of lines of
coverage excluded under the TRIEA legislation passed in 2005 remain excluded, including
commercial automobile, burglary and theft insurance; surety insurance, farmowners multiple
perils and professional liability (although directors and officers liability is specifically
included) . If such excluded coverages are required, we recommend that you consider
purchasing a separate terrorism policy. Please note that a separate terrorism policy for these
excluded coverages may be necessary to satisfy loan covenants or other contractual
obligations. The Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) includes a
$100 billion cap on insurers’ aggregate liability.
TRIPRA is set to expire on December31, 2014. There is no certainty of extension, thus the
coverage provided by your insurers may or may not extend beyond December 31, 2014. In the
event you have loan covenants or other contractual obligations requiring that TRIA/TRIPRA
be maintained throughout the duration of your policy period, we recommend that a separate
“Stand Alone” terrorism policy be purchased to satisfy those obligations.
Confidentiality We consider as confidential any information presented by Arthur J Gallagher Risk
StatementManagement Services, Inc. in response to your “request for proposal,” as well as subsequent
verbal and written communications between our organizations. We ask that other brokers not
have access to our material and that information presented in this proposal be shared only with
those who have a need to know within your company. We make our commitment to you that
information already received from you, and additional to follow, will be treated with the same
high level of respect and confidentiality.
Actuarial The information contained in this proposal is based on the historical loss experience and
Disclaimerexposures provided to Arthur J Gallagher Risk Management Services, Inc.. This proposal is
not an actuarial study. Should you wish to have this proposal reviewed by an independent
actuary, we will be pleased to provide you with a listing of actuaries for your use.
Pro-If you elect to bind coverage with a non-admitted carrier. Surplus lines taxes must be collected
Rata/Undecided and remitted to your Home State, as defined in The Non-admitted and Reinsurance Reform
State Surplus Act. Your Home State has not yet established a process for the remittance of the non-Home
Lines Billing State portion of the tax. We intend to bill the surplus lines taxes for the non-Home States, and
Disclaimerhold these taxes until a process for remittance is established and payment to the non-Home
State may be made. If no such process is established by the Home State, and the risk of future
claim by the non-Home Sate is determined to no longer exist, then the taxes will be returned to
you.
48
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc
CITY OF BOYNTON BEACH
CONTINGENT AND SUPPLEMENTAL COMMISSION DISCLOSURE
Effective October 1, 2009, Arthur J. Gallagher & Co., and its subsidiaries operating as insurance
agents/brokers under the corporate holding company known as Arthur J. Gallagher Brokerage &
Risk Management Services, LLC, resumed participating in contingent commission arrangements
which are routinely offered by insurance companies and intermediaries to agents and brokers, after
voluntarily foregoing the benefit of this type of compensation since January 1, 2005. Contingent
commission arrangements provide for additional compensation if certain underwriting, profitability,
volume or retention goals are achieved. Such goals are typically basedon the total amount of certain
insurance coverages placed by Gallagher with the insurance company and/or through the
intermediary, not on an individual policy basis. As a result, Gallagher may be considered to have an
incentive to place your insurance coverages with a particular insurance company.
During the time Gallagher’s retail operations did not accept contingent commissions, some insurance
markets and intermediaries, including Gallagher owned intermediaries, modified their commission
schedule with Gallagher, resulting in an increase in some commission rates. The additional
commissions, commonly referred to as “supplemental commissions”, are known at the effective date
of the policy, but some intermediaries and insurance companies are paying the commission increase
apart and later from when the commission is normally paid at policy issuance.
without
Unlike contingent commissions, supplemental commission payments are determined regard
to any performance factors which are contingent on future growth, retention, profitability, etc.
Contingent and supplemental commission ranges from less than 1% up to 10% of written or earned
premium on eligible lines of business (not all lines of business qualify).
NOTE
: Upon request, your Gallagher representative canprovide more specific market information
regarding contingent and supplemental commission related to your insurance coverage.
49
N:\PUBLPROP\Boynton Bch City\2014\Proposal\PROPOSAL for LEXINGTON.doc