Board Agenda - May 02, 2006

m. RFP #3706, Commercial insurance

Presenter: Danny Modisette

Purpose: A - Request decision - closure required

Time: No time limit

Description:

We routinely market commercial insurance every three to five years, to ensure the district is receiving adequate protection for potential loss at the most reasonable premium in the market. Service, industry rating and cost are some of the measures we use to determine the best provider of the coverages the district requires. This RFP included commercial general liability, business auto, inland marine (computers, musical instruments, business machines, etc.), commercial crime and pollution (underground storage tanks). Guaranty Insurance Group currently insures the district's property, auto, general liability, inland marine, crime and pollution. We are recommending Guaranty as the agency to provide crime and pollution.

However, to further reduce the district's premiums, we are recommending that the inland marine products be covered under the property policy (through F. M. Global Insurance Company) for $41,894, a savings of approximately 66% from last year's premium. The crime policy ($7,375) through Travelers Insurance Company, covers theft of checks, monies and other funds by employees or others. Pollution coverage ($6,596) through Great American Insurance Company, protects the district's underground storage tanks.

We are recommending Independent Insurance Group as the agency to provide service for Commercial General Liability and Business Auto through Republic Insurance Group. Republic is a Dallas based insurance company, founded in 1913. It is publicly traded and has a local claims office.

Commercial General Liability: Although the district has tort immunity, general liability is maintained for legal defense for claims against the district to which it has no legal liability. Included in this coverage is employee benefits liability. The premium is $97,487, a reduction of 17% from the 2005/2006 policy. "

Business Auto: The district has the least amount of immunity with transportation of students or accidents involving a motor vehicle. Because we will no longer transport students out of state to Camp Classen, effective 7/1/06, we are reducing the level of coverage to the state minimum. The premium of $254,064 represents a savings of approximately 28% from last year's premium. All insurance carriers recommended are rated superior or excellent according to the Best Rating Guide, as required by this RFP.

Recommendation:

To approve Guaranty Insurance Group through Travelers Insurance, Great American Insurance and F.M. Global Insurance for crime, pollution and inland marine (transferred to property) coverage and Independent Insurance Group through Republic Insurance for commercial general liability and business auto coverage, effective 7/1/06 through 7/1/07.

Business Impact:

The commercial insurance premium will be reduced by 33% from 2005/2006 for a savings to the district of approximately $196,828.

Summary:

Appendix:

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