|Resolution - Risk Management: Consider a resolution ratifying the actions of the City Manager in purchasing, for and on behalf of Lubbock Power and Light, the City's municipal electric utility, property insurance coverage to include boiler and machinery coverage. The subject insurers are AIG, Argenta, Munich RE, Travelers, Amlin, Guide One, Kiln/Faraday, ARK, Aspen, Alcor, and Chubb as listed in the attachment along with the terms and conditions.
|The City purchases property insurance on behalf of Lubbock Power and Light, the City's municipal electric utility, for its structures, contents, and equipment. The coverages include, but are not limited to:
The City, on behalf of LP&L, currently utilizes a layered coverage program including AEGIS, Axis Surplus Insurance Company, Ren Re Synd. 1458, SCOR UK Company Limited, Syndicate 1221 – Navigators, Inter Hannover, Syndicate 2001- MS Amlin, Syndicate 1200 – Argo, Syndicate 1301 – StarStone, Arch Ins Co (Europe) Ltd., Syndicate 1686 – Axis, Ironshore Bermuda, and Helvetia. The non-generating property deductible remains flat at $1,000,000 per occurrence. Generating property deductibles range from $250,000 to $1,000,000 per occurrence. The current rate for this coverage is $0.4746 per $100 valuation and a premium of $2,183,600.
- Special Form Property Policy, formerly known as All Risk, covers direct physical loss up to $552,526,095, which is the estimated total value of all electric utility structures, contents, and equipment;
- Flood and earthquake coverage to include high hazard zones;
- All property and contents;
- Mobile equipment and vehicles;
- Boiler and machinery insurance provides coverage for the mechanical failure and damage of generating equipment, boilers, heating, ventilating, air conditioning equipment, pumps and other mechanical equipment, excluding wear and tear; and
- Business Interruption coverage.
Current year and proposed premium is a combination of property and boiler and machinery coverage. Bundling both property and boiler and machinery coverages affords the electric utility greater coverage, and allows access to loss prevention services that include state inspections for boilers, infrared thermographic testing, oil analysis, and Doble testing, on electric generating and distribution equipment.
The City's broker secured a layered coverage program with AIG, Argenta, Munich RE, Travelers, Amlin, Guide One, Kiln/Faraday, ARK, Aspen, Alcor, and Chubb. Approving this insurance coverage on a rate basis allows the City Manager the ability to add and remove properties, as necessary, to maintain an accurate property valuation.
Carriers bind insurance coverage October 1, 2021, after notification of City Council approval. Insurance policies are issued after premiums are received from the City. The policy for the insurance coverage is approved by the Texas Department of Insurance as to content. Current insurance policies are available for review in Risk Management.