TRANSMITTAL LETTER FOR BOARD MEETING OF NOVEMBER 15, 2018
COMMITTEE ON PROCUREMENT
Mr. John Murray, Acting Executive Director
Title
Issue purchase order to Mesirow Insurance Services, Inc. for Furnishing Marine Liability and Hull Insurance for District marine vessels in an amount not to exceed $21,371.00, Account 101-25000-612290, Requisition 1506134
Body
Dear Sir:
At the Board Meeting of December 21, 2017, in accordance with Contract 17-RFP-32, the Board of Commissioners awarded a purchase order to Mesirow Insurance Services, Inc. (Mesirow) to serve as the District's broker-of-record for the handling of marine insurance and related services for a three-year period. The current marine insurance policies will expire on December 11, 2018.
On October 25, 2018, the District received certain bid quotations/market responses which Mesirow had solicited pursuant to the Detailed Specifications for Marine Insurance for a one-year period from December 11, 2018 to December 10, 2019 to provide insurance coverage for liability arising out of the District’s fourteen marine vessels used for pollution control, monitoring of water quality along Lake Michigan and the District’s waterways, and occasionally for tours. An annual aggregate liability limit of $10,000,000.00 and hull coverage for physical damage to the vessels on an Agreed Amount basis per original cost subject to a deductible of $10,000.00 per claim was requested.
For the 2018 placement, seven insurance carriers were approached. Two carriers provided a firm quotation at the limits and retention levels requested. Two carriers provided pricing indications. Three carriers declined to offer a quotation, indicating that the risk is either currently outside of their underwriting guidelines or they cannot be competitive with pricing.
It was determined that optimal program design, coverage, and pricing for Marine Liability and Hull coverage was offered by Continental Insurance Company at the rate of $21,370.00, which is a 2.7% reduction in premium over the prior year. The Continental Insurance Company policy provides excellent coverage terms and conditions, including physical damage to the District’s fourteen vessels up to the values reported for each, which currently totals $1,207,395.00. It should be noted that changes in the schedule of marine vessels for the District can affect premium, with the requirement to pay at the time of the change. To administratively accommodate this potential, we have added $1.00 for 2019.
The quotations/market responses were evaluated by Mesirow, the MWRD Risk Manager, the Director of Human Resources, and a representative from the Procurement and Materials Management Department. It was determined that the District should place this coverage with Continental Insurance Company at the rate of $21,370.00.
The company is licensed to do business in Illinois, complied with the terms and conditions of the bid specifications, and has an A.M. Best Company rating of A (Excellent), XV ($2.0 billion or greater), with a financial outlook of Stable.
In view of the foregoing, it is recommended that the Director of Procurement and Materials Management be authorized to issue a purchase order to Mesirow Insurance Services, Inc. in an amount not to exceed $21,371.00.
The estimated expenditures for 2018 and 2019 for Mesirow Insurance Services, Inc. are $21,370.00 and $1.00, respectively.
Funds for the 2018 expenditure in the amount of $21,370.00 are available in Account 101-25000-612290. Funds being requested for 2019 are contingent on the Board of Commissioners’ approval of the District’s budget for that year.
Requested, Beverly K. Sanders, Director of Human Resources, BKS:RAJ
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for November 15, 2018