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 with AIG, Argenta, Helvetia, HDI, SCOR, QBE, CNA Hardy, Aspen, Chubb, Travelers, Lancashire, Munich, Amlin, Liberty (XS), Faraday, Kiln, Ark, Arch, Convex, Munich (XS), Alcor, Chubb Bermuda and Talbot Syndicate 1183, for which the premium shall not exceed a rate of $0.6303 per $100. |
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: • Special Form Property Policy, formerly known as All Risk, covers direct physical loss up to $553,233,054 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. The City, on behalf of LP&L, currently utilizes a layered coverage program including AIG, Argenta, Munich RE, Travelers, Amlin, Guide One, Kiln/Faraday, ARK, Aspen, Alcor, and Chubb. 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 0.5557 per $100 valuation and a premium of $3,070,600. Current year and proposed premium is a combination of property and boiler & machinery coverage. The bundling of the property and boiler and machinery coverages affords the electric utility greater coverage and allows access to loss prevention services that include state inspections for their boilers, infrared thermographic testing, oil analysis, and Doble testing on electric generating and distribution equipment. The City’s broker was able to secure coverage at a rate of 0.6303 per $100 valuation at a premium of $3,486,958 with AIG, Argenta, Helvetia, HDI, SCOR, QBE, CNA Hardy, Aspen, Chubb, Travelers, Lancashire, Munich, Amlin, Liberty (XS), Faraday, Kiln, Ark, Arch, Convex, Munich (XS), Alcor, Chubb Bermuda and Talbot Syndicate 1183. 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, 2022, 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. |