R2020-125 Resolution Authorizing Property and Liability Insurance Coverage for the City of Decatur Illinois for the Policy Period October 1, 2020 to October 1, 2021

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City Of Decatur *!**Gallagher ecaturGallagher •CORE 360' As previously mentioned, the excess liability umbrella market is a product of social inflation. This 'social inflation' is a product of rising litigation which leads to high jury awards.During the past four years,the median average verdict for the top 50 cases in the US has doubled. What this means to us, is carriers are taking aggressive underw riting action. Carriers are reducing limits and increasing premiums. For carriers that used to have minimum premiums for higher limits of$5,000 per million, now have a minimum premum of$7,500-$15,000 per million. In regards to the 20/21 renewal,please be advised that the excess carrier has pointed out that the number of auto units has increased from 258 to 319 per the schedule that w as furnished at renew al.This is solely attributable to the adding of transit vehicles in January of 2020. 1 w as able to negotiate w ith the excess liability carrier to not charge the additional $22,000 of premum for this increased exposure. For the 20/21 renew al,the carrier w ill be charging for the increased exposure. In spite of this, the renew al for this coverage is still very competitive. If the city does not w ish to purchase the additional $5K we recommend the city purchase the $4M limit at$64,700. The 2020/2021 renew alfor crime coverage at a$500,000 limit is flat.We obtained an alternative limit of$1,500,000. This w ould give the City a total crime limit of$2,000,000. The additional premum for this coverage enhancement is nominal and it is recommended that the city purchase the higher limit. After many years of the Illinois w orkers compensation market show ing rate decreases,the market has begun to flatten. For the City's 2020 w orkers compensation renew al,w e sought alternatives. We approached our incumbent carrier Liberty Mutual, and the Illinois Public Risk Fund (IPRF). The IPRF w rites a majority of the municipalities for a number of years.One benefit of the program is that based upon your City's loss ratio, you can earn each year a safety grant. This grant w ill allow you to purchase safety equipment for police, fire,and public w orks at discounted costs.Based upon the significant program savings it is our recommendation that the city move their w orkers compensation coverage to IPRF. In conclusion, the City of Decatur's 2020/2021 renew al pricing, coverages,and limits remained stable and is very competitively priced considering the current market conditions and pandemic. We would like to thank you and your team for your cooperation during this unprecedented global pandemic. We value your loyalty and the relationship our team continues to develop with you on a daily basis. Yours Truly, Michael McHugh Area Senior Executive Vice President In the follow ing pages, w e w ill demonstrate w hat makes our company the best fit for your insurance placement and risk management needs. Thank you again for allowing us to be your partner in this placement. Michael McHugh Wednesday,September 2,2020 4 �