R2014-114 ACCEPTING THE BID AND AUTHORIZING CONTRACT Liability Insurance

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Mass Transit Memorandum No. 091714-1 September 17,2014 TO: Honorable Mayor Michael T. McElroy and City Council Members FROM: Ryan McCrady, City Manager Paul McChancy, Mass Transit Administrator SUBJECT: Transit Liability Insurance and Claims Handling Services SUMMARY Staff recommends that Council adopt a Resolution awarding the RECOMMENDATION: annual contract for Transit System liability insurance and claims handling services to Lancer Insurance Co. and Admiral Insurance Co. BACKGROUND: Staff sought bids for a firm to provide liability insurance and claims handling services for the Transit System for one year. The requested insurance would provide minimum coverage of $1,000,000 per occurrence for the primary layer of general liability and commercial auto, and would provide a total per occurrence and aggregate limit of $10,000,000 of liability coverage. The City's Self Insured Retention (SIR)was required to be no more than $250,000. The attached Tabulation of Bids gives a comparison of the two proposals and their premiums that were submitted by two local insurance brokers. Staff reviewed the proposals and determined that both proposals meet all of Transit's specifications and both are from highly rated, national insurance carriers. Combining their primary and excess layers, the proposals were the same in what they provided, with one important exception. The Travelers Insurance proposal requires a deductible (SIR) of$250,000, and the Lancer/Admiral proposal requires an SIR of only$100,000. The Tabulation of Bids shows that the total cost for Lancer/Admiral is $143,884, including the cost of claims handling (TPA). The total cost for the Travelers Insurance bid is $195,125. Staff determined that the Lancer Insurance/Admiral Insurance combined proposal meets all of the Transit System's requirements, and is the best and least expensive proposal. Lancer Insurance and Admiral Insurance have served as the Transit System's liability insurance providers since September 22, 2013, and staff members are very satisfied with the services they provide. Staff finds that these insurance carriers are capable and competent to perform the work and would meet the needs of the Transit System.