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HomeMy WebLinkAbout4.10 Summary ABAG Property Insurance CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: July 11, 1988 SUBJECT Property Insurance - City Facilities EXHIBITS ATTACHED : Summary of ABAG (Arkwright) Property Insurance Coverage RECOMMENDATION Receive report, confirm the administrative action to bind Insurance through ABAG (Arkwright). FINANCIAL STATEMENT: Total Annual Premium $4,105 DESCRIPTION On July 1, 1988, the City assumed ownership of several properties previously owned by the Dublin San Ramon Services District. This change has substantially altered the nature of the City's insurable assets. Prior to July 1, 1988, the majority of the City's assets were in the form of furnishings and equipment. The only City owned structure was the Corporation Yard facility which had a value of $50,000. The remaining buildings occupied by City services were leased from other agencies or private businesses. The acquisition of DSRSD facilities means the City must insure the following locations: Shannon Community Center, Valley Community Swim Center Pool House, Valley Community Swim Center Equipment, Sports Grounds Equipment/Lights, and the Sports Grounds Snack Bar and Restrooms. Staff had provided ABAG PLAN Corporation, the City's current liability coverage provider, with data on the City's property. ABAG has been working with a reputable insurance underwriter to offer property insurance to the members of ABAG. The intent was to obtain favorable rates by presenting the company with a large volume of insurable assets. ABAG entered into discussions with Arkwright Mutual Insurance Company. This company has experience insuring property in larger public entities such as: San Jose, Fremont, Fresno County, Sacramento, Burbank, Glendale, and Long Beach. References indicated a positive experience by these public agencies. The company places a great deal of emphasis on loss control and evaluation of the agency's assets. Staff had previously renewed the City's Property Insurance Policy effective March 1, 1988. The policy covered the contents at City Offices, Shannon Center, and the Corporation Yard. In addition, the Corporation Yard building was covered. The total premium was $2,168. Staff requested that Mr. Ben Fernandez of Cooper and Cook provide a coverage quotation on the increased assets. 1988-89 Property Insurance Proposals Both Cooper & Cook and the proposal by Arkwright were based on the total value of City owned assets including those insured by the policy obtained in March of this year. The two proposals were compared based on similar coverage. The following comparison shows the annual premium based on a $5,000 deductible policy. The total insured assets were estimated at approximately $3.122 million. Cooper & Cook $9,829 ABAG(Arkwright) $4,105 Cooper & Cook also presented a proposal for a $500 deductible policy. The annual premium for this policy was $10,346. The ABAG premium includes an 8% administrative charge. " Staff evaluated the two programs and elected to bind coverage with the ABAG program. The coverage needed to be obtained to insure against a potential loss. ABAG (Arkwright) Program Features The ABAG proposal has several features including the low cost, which made it quite attractive. Also, the consolidation of coverage with a single entity reduces the administrative time dealing with insurance issues. Exhibit A provides a complete outline of the coverage offered. The coverage is quite comprehensive and meets the City's needs. The favorable rates will also be beneficial when the new Civic Center is added to the scheduled of assets. Arkwright has agreed to the same rates for the first three years of the program. This limits changes to the annual premium cost to those caused by an increase in the value of the insured assets. Recommendation Staff would recommend that the City Council confirm the administrative action to bind the 1988-89 property insurance coverage with the ABAG (Arkwright) program. COPIES TO: / � 4I 1 r EXHIBIT A Summary of Arkwright Property Insurance Coverage Offered by ABAG PLAN Corporation FEATURES The coverage includes the following features: • 1. The buildings and contents of the City are covered on a repair or replace basis. No loss will be discounted for depreciation. 2. Boiler and machinery insurance. 3. $1,000,000 of Extra Expense coverage. This includes the costs associated with continuing operations after a covered loss. 4. $1,000,000 of Automatic Coverage. This provides coverage for 90 days on newly acquired locations prior to reporting them to the underwriter. 5. $1,000,000 of Errors and Omissions Insurance. This provides coverage for unintentionally inaccurate reports of values or against accidental omission of property which should be insured. 6. $200,000 of expediting expense. Typically a boiler and machinery coverage, this feature allows recovery of overtime labor and, express transportation to effect repairs quickly. This is very important for losses associated with police departments or other vital services. 7. Debris removal, although some limitations exist regarding the removal of hazardous materials. 8. The underlying coverage includes fidelity bonds as needed. 9. Vehicles are covered if scheduled. 10. There is no "co—insurance' clause in the policy. EXCLUSIONS The following types of properties are excluded: 1. Money (except as covered through fidelity coverage), deeds, accounts, fine arts (except as scheduled into the coverage agreement), furs and precious metals or precious stones. 2. Land, including water, standing timber or animals. 3. Watercraft or aircraft. 4. Dams or dikes. In addition, there are several types of events that are excluded under the agreement: . Nuclear exposures Changes in temperature War Delay or loss of market Utility disruption Flood Earth movement Indirect loss Mysterious disappearance Faulty workmanship Manufacturer's error Wear and tear Settling, cracking or shrinking Contamination Impact damage to docks, piers and wharves Insects or vermin Dishonest acts (unless covered under a fidelity endorsement) SERVICES PROVIDED 1. Loss inspection services. Participating cities will have access to strong loss engineering to help reduce losses and improve the operation of the City. 2. Boiler and machinery inspection. Many pressure vessels in each City must be inspected periodically at some cost to the City. Arkwright/Boston will provide that service in conjunction with their loss inspection services at no additional cost. 3. Appraisal services. Arkwright/Boston will assist in developing an asset management program for each City. 4. Customized services. If special needs arise, such as the construction of a new building or the acquisition of a property, Arkwright engineers will assist the City with plan reviews or inspections as needed.