R2012-173 ACCEPTING THE BID AND AUTHORIZING CONTRACT WITH THE TRAVELERS COMPANIES, INC.

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Mass Transit Memorandum No. 091112-1 September 11, 2012 TO: Honorable Mayor 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 liability insurance and claims handling services for the Transit System to the Travelers Companies, Inc. 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 coverage of $1,000,000 per occurrence for general liability and commercial auto, and would provide $9,000,000 of excess liability coverage. The City's Self Insured Retention was stated as $250,000. Staff reviewed the three proposals that were submitted and determined that two proposals met all of Transit's specifications. The third proposal failed to provide the required excess liability coverage and therefore was eliminated. Note that one proposal combines Lancer Insurance and Admiral Insurance to provide the required coverages. The attached sheet gives a comparison of the two proposals and the premiums. This shows that the total cost for Travelers is $152,746 and the total cost for Lancer/Admiral is $150,682. Staff examined all of the pros and cons of the two proposals and finally determined that the benefits of the claims handling offered by Travelers far outweighs the small difference in total cost. Travelers has provided both liability insurance and claims handling for the Transit System since 2004, and staff has had an excellent relationship with the company and with their Decatur broker, Arthur J. Gallagher Risk Management Services, Inc. (formerly Behnke & Company, Inc.) Staff finds that Travelers is capable and competent to perform the work and would continue to meet the needs of the Transit System. POTENTIAL No known objection. OBJECTION: INPUT FROM Scott Clark, Risk Manager OTHER SOURCES: Gregg Zientara, Finance Director Richard Foiles, General Manager DPTS STAFF REFERENCE: Paul McChancy, Mass Transit Administrator BUDGET/TIME The costs of liability insurance and claims handling services are IMPLICATIONS: included in the current budget(Fund 74).