TRANSMITTAL LETTER FOR BOARD MEETING OF NOVEMBER 7, 2024
COMMITTEE ON PROCUREMENT
Mr. Brian Perkovich, Executive Director
Title
Issue purchase order to Alliant Insurance Services, Inc. for Furnishing Marine Liability and Hull Insurance for District marine vessels in an amount not to exceed $38,365.00, Account 101-25000-612290, Requisition 1626430
Body
Dear Sir:
At the Board Meeting of December 1, 2022, in accordance with Contract 22-RFP-12, the Board of Commissioners awarded a purchase order to Mesirow Insurance Services, Inc. (Mesirow), whose name was changed to Alliant Insurance Services, Inc. (Alliant) as of May 31, 2024, to serve as the District's broker-of-record for the handling of marine insurance and related services for a three-year period. In this capacity, Mesirow has responsibility for securing quotes from the insurance market for specified insurance policies. The current marine insurance coverage will expire on December 11, 2024.
On October 11, 2024, the District received quotes and market responses which Alliant solicited pursuant to the detailed specifications for marine insurance for a one-year period from December 11, 2024 to December 11, 2025 to provide insurance coverage for liability arising out of the operation of the District’s fourteen marine vessels used for pollution control, monitoring of water quality along Lake Michigan and the District’s waterways, as well as debris clearance. An annual aggregate liability limit of $10,000,000.00, subject to a deductible of $10,000.00 per claim, and hull coverage for physical damage to the vessels on an agreed amount basis of original cost, was requested.
For the 2024 placement, eight insurance carriers were approached. One carrier provided quotes at the limits and retention levels requested, which include a quota share arrangement with another carrier for a portion of the Excess Limits to be provided. Six carriers declined to offer quotes, citing either the inability to provide the limits requested, or the inability to provide competitive pricing.
The quotes were evaluated by Alliant, the Risk Manager, and the Senior Risk Analyst. It is recommended that the District purchase, through Alliant, a program with total Liability Limits of $10,000,000.00, subject to a deductible of $10,000.00, and hull coverage for physical damage to the vessels on an agreed amount basis per original cost, as quoted by Mitsui Sumitomo Insurance USA, Inc. with participation by Markel American Insurance Company. The program structure for the 2024 Marine Insurance would be as follows:
Primary Layer: Mitsui Sumitomo Insurance USA, Inc., Liability Limit of $1,000,000.00, subject to a deductible of $10,000.00, and hull coverage for physical damage to the vessels on an agreed amount basis per original cost, at a cost of $17,771.00
First Excess Layer: Total Liability Limit of $4,000,000.00 excess of the $1,000,000.00 Primary Layer at a total cost of $11,910.00, comprised of Mitsui Sumitomo Insurance USA, Inc. (lead carrier) with a Liability Limit of $2,000,000.00, 50% quota share of $4,000,000.00 excess of $1,000,000.00 and Markel American Insurance Company with a Liability Limit of $2,000,000.00, 50% quota share of $4,000,000.00 excess of $1,000,000.00
Second Excess Layer: Mitsui Sumitomo Insurance USA, Inc., Liability Limit of $5,000,000.00 excess of $5,000,000.00, at a cost of $8,684.00
For the recommended program, the overall premium is $38,365.00 which is an increase of $1,748.00 (4.77%) in premium over the prior year program.
All insurance carriers being recommended for this placement are licensed/allowed to do business in Illinois and have A.M. Best Company ratings of A (Excellent), XV ($2.0 Billion or greater) or better.
The Diversity Section has reviewed this contract for Alliant Insurance Service, Inc., which serves as the District’s intermediary as required by the State of Illinois for the purchase of marine liability and hull insurance, and determined that it has met the requirements of Appendix A. The Minority-owned Business Enterprises (MBE), Women-owned Business Enterprises (WBE) and/or Small Business Enterprises (SBE) goals are: 20% MBE, 10% WBE and 10% SBE.
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 in an amount not to exceed $38,365.00.
Funds are available in Account 101-25000-612290.
Requested, Thaddeus J. Kosowski, Director of Human Resources, TJK: BLW
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Marcelino Garcia, 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 7, 2024
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