Resolution No. 100701
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RESOLUTION NO. 10,070
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE PURCHASE OF A
NEW ONE-YEAR POLLUTION LEGAL LIABILITY INSURANCE
POLICY WITH CHUBB CUSTOM INSURANCE COMPANY FOR PRE-
EXISTING CONDITIONS OF ACQUIRED PROPERTIES AND A
TWO -WEEK EXTENSION OF THE EXISTING POLICY WITH
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE
COMPANY
WHEREAS, the City of Vernon has evaluated its liability
insurance policies in light of the acquisition of properties by the
City; and
WHEREAS, the City's current Pollution Legal Liability
Insurance Policy with American International Specialty Lines Insurance
Company ("American") for insurance for pre-existing conditions of
acquired properties for a premium of $12,540.00 expires on
September 15, 2009; and
WHEREAS, the City desires to renew the policy of insurance
to protect the City; and
WHEREAS, the City employed the services of Arthur J.
Gallagher & Co. Insurance Brokers of California, Inc. ("Arthur J.
Gallagher") to act as the City's broker to structure and obtain the
appropriate insurance coverage for the period September 15, 2009
through September 15 2010; and
WHEREAS, Arthur J. Gallagher recommended that the City enter
into, an arrangement with Chubb Custom Insurance Company ("Chubb") for
the provision of insurance for an annual premium amount of $10,890.00
because it was the lowest quote received and because Chubb had the
highest A.M. Best rating of the insurance companies that provided
quotes; and
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WHEREAS, subsequent to its bid, Chubb identified an
additional site after performing its site review, thereby increasing
the annual premium amount to $11,353.00, exclusive of surplus lines
taxes and fees; and
WHEREAS, due to the volume of documents involved, Chubb's
site review resulted in a delay beyond the September 15, 2009,
American policy expiration date, requiring a two -week extension to the
current policy with American at a cost of $481.00; and
WHEREAS, by memo dated September 14, 2009, the Risk Manager
recommended that the City accept the bid of Chubb; and
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of subsection (a) of
Section 2.27 of the Vernon City Code, it is in the public interest and
necessity to extend and renew the pollution legal liability insurance
for pre-existing conditions of acquired properties with American for a
two -week period, and to enter into a pollution legal liability
insurance for pre-existing conditions of acquired properties with
Chubb for 2009-2010, in order to facilitate the efficient operation of
the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves and authorizes the purchase of a pollution liability policy
for pre-existing conditions from Chubb and the payment of the annual
premium payment to Chubb of $11,353.00, plus applicable surplus lines
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taxes and fees.
.SECTION 3: The City Council of the City of Vernon hereby
approves and authorizes the two -week policy extension of the current
policy with American and the payment of $481.00, plus applicable
surplus lines taxes and fees, for the two -week extension.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to take whatever
action is deemed necessary or desirable for the purpose of implementing
and carrying out the purposes of this Resolution and the transactions
herein approved or authorized.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or her designee, to send a copy of this
Resolution to:
Arthur J. Gallagher & Co.
Insurance Brokers of California, Inc.
Attn. Chris Falbo, Area Vice President
505 N. Brand Blvd., Suite 600
Glendale, CA 91203-3944
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SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
her certification to be entered in the Book of Resolutions of the
Council of this City.
APPROVED AND ADOPTED this 28th day of September, 2009.
r
Hilario Gonzales
Name:
Title: Mayor / 44 l^N Drn-TPr�
ATTEST:
M NUELA GIRON, ity Clerk
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STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerkofthe City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 10,070, was
duly passed, approved and adopted by the City Council of the City of
Vernon at a regular meeting of the City Council duly held on Monday,
.September 28, 2009, and thereafter was duly signed by the Mayor or
Mayor Pro-Tem of the City of Vernon.
Executed this Cday of September, 2009, at Vernon, California.
MANUELA GIRON City Clerk
(SEAL)
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-J►; — .
OFFICE OF THE CITY CLERK
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
September 30, 2009
Arthur J. Gallagher & Co.
Insurance Brokers of California, Inc.
ATTN: Chris Falbo, Area Vice President
505 N. Brand Blvd., Suite 600
Glendale, CA 91203-3944
Re: Pollution Legal Liability Insurance Policy with Chubb Custom Insurance Company
Transmitted herewith is a copy of Resolution No. 10,070 that was approved by City Council on
September 28, 2009.
If you have any questions regarding this matter, please call Mr. Willard Yamaguchi at (323) 583-
8811 ext. 175.
Very truly yours,
Ako"
y GirX 6t4�
City Clerk
NG:dj
c: Willard Yamaguchi
Karina Rueda
Resolution No. 10,070
Exclusively Industrial
�EP 2� 1 2009 STAFF REPORT
CITY CLERK'S OFFICESTAFF
Management
DATE: September 14, 2009
TO: Honorable Mayor and City Council
FROM: Willard G. Yamaguchi, Risk Manager W 1
RE: Pollution Liability Renewal for Pre-existing Conditions
September 28, 2009 Agenda
ao
APPROVED 'EP 218 `09 C[TY CORM
The City has a pollution liability policy for newly acquired properties owned by the City in the
event that a condition arises at a site. The current underwriter is American International
Specialty Lines. The cost of the premium was $12,540.
For 2009-10, Risk Management obtained quotes from AISL ($12,540), Chubb ("Chubb")
Custom Insurance Company ($10,890), Great American Insurance Company ($12,164), and Ace
Environmental Risk ($14,123). Chubb provided the most competitive bid at $10,890 and has the
additional advantage of having the highest A.M. Best rating of the four companies quoting.
After we informed our broker on August 1 Oth that we accepted Chubb, Chubb then requested to
copy and review environmental reports pertaining to two properties, held by our Health
Department, prior to renewal. Due to the tremendous volume of documents involved, it was not
practical for Chubb to copy said documents and instead chose to review said documents on site.
On. September 10, 2009, Chubb identified an additional site that needed to be included on the
pollution schedule and reviewed the corresponding documents on September 14, 2009. The
additional site resulted in an increase in the original quote. The new quote is $11,353. Chubb's
delay required a 2-week extension to the current policy at a cost of $481, which is based on a per
diem basis.
Recommendation
Risk Management recommends that the City accept the bid from Chubb Custom Insurance
Company in the amount of $11,353 for pollution liability policy for pre-existing conditions and
the extension of the current policy in the amount of $481, for a total of $11,834, exclusive of
surplus lines taxes and fees. $13,000 has been budgeted for this expense.
WGY/ab
cc: Donal O'Callaghan
Rory Burnett
C FUVED
S E P 1 5 2000
BY: �' �o :'s W%
L
RECEIVED
SEP 2 1 2009
CITY CLERK'S OFFICE Inter Office Memorandum
Risk Management
Date: September 15, 2009
To: Donal O'Callaghan, City Administrator
From: Willard G. Yamaguchi, Risk Manager wv6
Subject: Pollution Liability Renewal for Pre-existing Conditions
September 28, 2009 Agenda
For 2009-10, Risk Management obtained the following quotes pollution liability insurance for
pre-existing conditions:
American International Specialty Lines ("AISU) $12,540
Chubb Custom Insurance Company ("Chubb") $10,890
Great American Insurance Company $12,164
Ace Environmental Risk $14,123
Chubb was selected based upon their pricing and for the fact that they had the highest.A.M. Best
rating of the four companies quoting.
After we informed our broker on August l oth that we accepted Chubb, Chubb then requested to
copy and review environmental reports pertaining to two properties, held by our Health
Department, prior to renewal. Due to the tremendous volume of documents involved, it was not
practical for Chubb to copy said documents and instead chose to review said documents on site.
On September 10, 2009, Chubb identified an additional site that needed to be included on the
pollution schedule and reviewed the corresponding documents on September 14, 2009. The
additional site resulted in an increase in the original quote. The new quote is $11,353. Chubb's
delay required a 2-week extension to the current policy at a cost of $481, which is based on a per
diem basis.
Recommendation
Risk Management recommends that the City accept the bid from Chubb Custom Insurance
Company in the amount of $11,353 for pollution liability policy for pre-existing conditions and
the extension of the current policy in the amount of $481, fora total of $11,834, exclusive of
surplus lines taxes and fees. $13,000 has been budgeted for this expense.
WGY/ab
C F. P 15 2009