Report to Mayor and City Council
Tuesday, October 06, 2020
Consent
SUBJECT:
Title
CONSIDER THE RENEWAL OF A BUILDER'S RISK POLICY THROUGH AMERICAN INTERNATIONAL GROUP UK LIMITED, PROCURED THROUGH MARSH/JLT SPECIALTY INSURANCE SERVICES, INC., AT A PREMIUM AMOUNT NOT TO EXCEED $82,611.30
Body
I. SUMMARY
In January, 2017 the CRA procured insurance policies in the area of Comprehensive General Liability ("GL") and Builder's Risk ("BR") for the period of one year. These policies are different from the Pollution Legal Liability ("PLL") and Contractor's Pollution Liability ("CPL/PLI"), in that they do not insure the pollution risk, but rather they insure traditional risks that typically occur on a project. The policies were expired in 2018, and were replaced by a comprehensive "wrap" insurance program developed jointly with Macerich, called an Owner Controlled Insurance Program ("OCIP").
The CRA's share of the Builder's Risk policy, which would be renewed by this action, excludes Cell 2, which is the responsibility of CAM under the wrap agreements. This protects the investments the CRA or its predecessors have made in the construction of civil or remedial infrastructure on Cells 1, 3, 4, and 5.
The annual premium is $82,611.30 (renewal quote attached as Exhibit 1). If one or more cells are going to be developed (such as Cells 3, 4, and 5 under FBD Carson) after the annual premium has been renewed then these cell(s) will come off this annual policy and a new BR policy will be offered for these cells, with values based on their total construction costs and for the entire length of the construction term of the cells to be developed. This was part of the negotiation of the Insurance Administration Agreement with FBD Carson - how those two policies would reconcile in a new BR wrap since there would be new construction value from the vertical development constructed on top of already-existing, CRA-owned infrastructure.
Once that new BR policy is in place a retu...
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