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7 Insurance Policies
AqendaItem#7...—-S.TRUCKEEDONNERPublicUttlityDistrictACTIONTo:BoardofDirectorsFrom:BrandonPerryDate:May14,2019Subject:ConsiderationofExtensionofCurrentInsurancePoliciesforProperty,Equipment,Earthquake,Flood,GeneralLiability,Auto,Excess,Cyber,Pollution,andCrime1.WHYTHISMATTERISBEFORETHEBOARDTheDistrict’sannualproperty,equipment,earthquake,flood,generalliability,autoliability,excess,cyber,pollution,andcrimeinsurancecoverageendsJune1,2019andrequiresBoardapprovalforrenewal.2.HISTORYDuetothecomplexityofitsinsurancerequirements,theDistrictutilizesinsurancebrokerageservices.InMarch,2018,theDistrictBoardofDirectorsawardedthecontractforinsurancebrokerageservicesforannualproperty,liabilityandcybercoveragetoInterWestInsuranceServicesforuptoathree-yearterm(2018-2020).3.NEWINFORMATIONTheDistrictworkedwithMattBauerandTonyPozaswithInterWesttocompletethenecessarylettersandapplicationstoobtaincompetitivebidsfortheinsurancepackage.InterWestsolicitedquotesfromover35insurancecompaniesforthepolicyperiodJune1,2019-June1,2020andconsideredcarriersbasedoninsuranceneeds,priceandratingofthecompany.Duetobusinessreasons,SpecialDistrictRiskManagementAuthority,rescindeditsoriginaloffertoquotethepolicy.Thiswasdueprimarilytothehighfireexposureinthearea.TDPUDpropertyisvaluedatapproximately$74M.MostcarriersthatlnterWestapproachedrefusedtoquoteTDPUDbasedonreasonsincludingincreasedriskintheareaofpropertycoverage.ThisisprimarilyduetotheperceivedthreatofwildfiresfollowingmajorfiresinCaliforniain2018.StaffreceivedaquotefromInterwestutilizingJointPowersRiskandInsuranceManagementAuthority(JPRIMA)foraperiodofJune1,2019toApril1,2020.CoverageviaJPRIMAisfora3yearterm. TheproposedpremiumfromInterwestfortheJPRIMApolicyis$669,969.00,whichisanapproximately125%increasefromtheprioryear’scost.Additionally,theperiodofcoverageisdecreasedfrom12monthsto10monthsforthiscostincrease.Basedonreceivingonlyonequotefortheinsurancerenewalforthisperiod,andthesubstantialincrease,staffrequesteda1monthextensiononthecurrentpolicyinordertoobtainadditionalquotes.TheseadditionalquotesarebeingrequestedfromlnterWestandACWAIJPIA.TheadditionalproposalwillbefromtheAssociationofCaliforniaWaterAgenciesJointPowersInsuranceAuthority’s(ACWA)JointPowersInsuranceAuthority(JPIA).CoverageviaACWAIJPIAisfora3yearterm.InterWestdoesnothaveaprovideragreementwithACWAIJPIAtoprovideinsurancecoverage.StaffcontactedACWAIJPIAforaquotethatwillbeavailablebetweenMay15thandMayy7thRequirementsforobtainingcoveragefromACWAIJPIAincluderatificationofagreementstojointheACWAandACWAIJPIA.Additionally,bothorganizationshavetoapprovetheadditionofTDPUDtotheirJPA.TheestimatedpremiumfromACWAIJPIAis$273,133.00whichisadecreaseofapproximately8%increasefromtheprioryear’scost.StaffwillapplyforACWAmembershipandnecessaryapprovalsifneededtoobtainsuchinsurance.ThisamountdoesnotincludemembershipormanagementfeesfromACWAIJPIA.4.FISCALIMPACTTheapprovedFY19budgetdoesincludefundsforthisinsurancecontract.AlladditionalfundsneededwillbeincludedintheformationoftheFY20budget,currentlybeingcompiledforBoardconsideration.5.RECOMMENDATIONAuthorizetheGeneralManagertoexecuteacontractextensionofupto2monthswithTravelersInsuranceandInterWestinordertoobtainadditionalquotesforcoveragewiththebestpossibletermsandconditionsfortheDistrict.---‘-r--6i...BrandonPerryMichaelD.HolleyHumanResourceIRiskManagerGeneralManager