Report to Carson Reclamation Authority
Wednesday, October 04, 2023
Discussion
SUBJECT:
Title
CONSIDER RENEWAL OF A PROPERTY INSURANCE POLICY WITH STARR TECHNICAL RISKS AGENCY, INC. WITH A LIMIT OF $58,631,848 AND WITH A $5,000,000 EARTHQUAKE SUBLIMIT AT A TOTAL PREMIUM NOT TO EXCEED $515,164 PROCURED THROUGH MARSH USA, INC.; AND AUTHORIZE THE EXECUTIVE DIRECTOR TO BIND THE POLICY
Body
I. SUMMARY
This action is the renewal of the Property Insurance Policy (PIP) previously acquired by the CRA in October 2021 and renewed in October 2022, and authorizes the Executive Director of the CRA to approve and bind a renewal of the PIP on behalf of the CRA.
The proposal contained herein for the CRA Board's approval is for the full requested limit of $58,631,848, up from the previous estimated value of $39,599,519. All insurers in the current property insurance environment have required their insureds to update the total insured value (TIV) of their properties, and a result the CRA had to undertake a replacement cost exercise for the Landfill Operations Center, the installed remedial systems, and the on-site inventory. The past several years has seen significant construction cost escalation. The insurance carrier proposed is the current insurer, Starr Technical Risks Agency, Inc. and the premium is $515,164, up from last year's $304,678, which will provide for coverage for a year. The rate is 14.2% percent higher than last year's, which was 9.2% higher than 2021's, but the 69.1% increase in the total cost is the higher rates compounded by the significantly increased TIV for the same coverage.
However, pursuant to the Insurance Administration Agreement between Carson Goose Owner, LLC (CGO) and the CRA, approved by the CRA Board in September, CGO is obligated to pay for the CRA's costs of the PIP premium as a "bridge" policy covering the CRA until construction can commence and the CRA can be covered by a Builder's Risk policy.
II. RECOMMENDATION
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