Resolution No. 2012-092RESOLUTION NO. 2012-92
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE PURCHASE OF
EXCESS LIABILITY INSURANCE FROM STARR INDEMNITY &
LIABILITY COMPANY THROUGH ARTHUR J. GALLAGHER & CO.
WHEREAS, the City's current Excess Liability Policy, expires
on June 30, 2012; and
WHEREAS, the City used 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 coverages; and
WHEREAS, by memo dated May 23, 2012, the Risk Manager has
recommended that the Excess Liability Policy be purchased from Starr
Indemnity & Liability Company ("Starr") through Arthur J. Gallagher
based on the quote from Starr in the amount of $133,000.,00 for Excess
Liability Policy, exclusive of surplus lines taxes and fees; and
WHEREAS, the City desires to obtain insurance coverage for
Excess Liability Policy with Starr to protect the City; and
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of Section 2.27(b)(1) of
the Vernon City Code, it is in the public interest and necessity to
approve the purchase of the Excess Liability Policy through Arthur J.
Gallagher.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNO N 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 the purchase of the Excess Liability Policy through Arthur J.
Gallagher.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to execute any and
all documents necessary for the purpose of securing the Excess
Liability Policy on behalf of the City of Vernon and to take whatever
actions are 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 4: The City Council of the City of Vernon hereby
approves the payment of the annual premium for the Excess Liability
Policy at the quoted cost of $133,000.00 plus -surplus lines taxes and
fees, if applicable.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or the City Clerk's designee, to send a copy of
this Resolution to:
Arthur J. Gallagher & Co
Insurance Brokers of California, Inc.
Attn. Nasreen Kopecky, Account Manager
15 Enterprise, Suite 200
Aliso Viejo, CA 92656
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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
the City Clerk's certification to be entered in the File of
Resolutions of the Council of this City.
APPROVED AND ADOPTED this 5th day of June, 2012.
Name: William J. Davis
Title:,L4� / mayor Pro-Tem
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STATE OF CALIFORNIA
� ss
COUNTY OF LOS ANGELES
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2012-92, 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 Tuesday, June 5, 2012, and thereafter was duly signed by the
Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this day of June, 201 , at Vernon, California.
i ar G. lap(ag6chio City Clerk
(SEAL)
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OFFICE OF THE CITY CLERK
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
June 7, 2012
Arthur J. Gallagher & Co.
Insurance Brokers of California, Inc.
ATTN: Nasreen Kopecky, Account Manager
15 Enterprise, Suite 200
Aliso Viejo, CA 92656
Re: Excess Liability Insurance from Starr Indemnity & Liability Company
Dear Ms. Kopecky:
Transmitted herewith is a copy of Resolution No. 2012-92 that was approved by City Council on
June 5, 2012.
If you have any questions regarding this matter, please call Mr. Willard Yamaguchi at (323) 583-
8811 ext. 175.
V truly your ,
,ILLARD G. YA A UCHI
City Clerk
WGY:dj
Enclosure
c: Justin Arriola
Ana Barcia
Resolution No. 2012-92
E�7,cfusivefy industrial
RECEIVED
MAY 2 4 2012
CITY CLERK'S OFFICE
DA: May 23, 2012
Staff Report
Risk Management
TO: Honorable Mayor Pro Tern and City Council
FR: Willard G. Yamaguchi, Risk Manager M
RE: Excess Liability Insurance Renewal 2012-13
RECEIVED
MAY 2 3 20112
CITY ADMINISTRATION
M
In the case of liability claims, the City of Vernon is self insured for the initial $2 million of a
claim ("SIR"), after which an excess liability insurance policy is in place for the next $20 million
of said claim. The current carrier is Starr Indemnity ("Starr"). The cost of the current Starr
policy is $135,000.00.
For fiscal year 2012-13, our insurance broker, Arthur J. Gallagher, was able to secure quotes
from Starr, and Navigators and Houston Casualty Company ("Houston") combined with $ 10
million each, based on a $2 million SIR:
Starr Indemnity $133,000.00
Navigators/Houston $142,925.00
Navigators/Houston also submitted bids based on a $1.5 million SIR ($173,684.00) and $1
million SIR ($194,550.00). Starr Indemnity declined to provide quotes based on lower SIR's.
The advantage to a lower SIR policy is that the City would transfer a large liability case over to
the insurance carrier for litigation purposes much sooner and thereby limiting the City's
exposure as attorney fees and costs are included as an expense within the initial SIR.
The disadvantage is simply cost. By staying with the present $2 million SIR, the City can save
$40,000.00 to $60,000.00.
Fiscal Imvact
Adequate funds have been budgeted for this expenditure.
Recommendation
Risk Management recommends the renewal of the Excess Liability insurance policy with Starr
Indemnity at a cost of $133,000.00. A saving of $2,000.00 from the current policy.