Report to Carson Reclamation Authority
Thursday, September 09, 2021
Discussion
SUBJECT:
Title
CONSIDER RENEWAL OF A PROPERTY INSURANCE POLICY PROCURED THROUGH MARSH/JLT SPECIALTY INSURANCE SERVICES, INC. AND AUTHORIZE THE EXECUTIVE DIRECTOR TO BIND THE POLICY
Body
I. SUMMARY
This action is continued from the September 7, 2021 Regular Meeting and authorizes the Executive Director to approve and bind a renewal of a Property Insurance Policy on behalf of the CRA. Since the end of 2017 the Authority has had a Builder's Risk ("BR") policy on the Site instead of property insurance because of the ongoing construction of the remedial systems (premium paid for by the CRA) and the vertical construction (premium paid for by CAM). Last year the Board approved the renewal of the BR policy for a year; that policy's term ends on September 12, 2021 and no renewals are available.
The policies were presented by the Broker to the insurance markets for renewal quotations in August 2021, under new terms: with the work stoppage on Cells 2, the coverage would be for property insurance on already-constructed improvements until the resumption of construction. Faring, the developer of Cells 3, 4, and 5 would develop and procure their own Builder's Risk and GL programs for those cells. If construction resumed during the term the property policy would convert back to a BR policy.
As of September 7 and later, the publication of this staff report, quotes for the renewal have not been received by the CRA. The Broker has indicated that due to significant changes in the property insurance market, the CRA is seeing a significant increase in quoted premium for the same coverage, which was slightly more than $80,000 in 2020. This is similar to the experience in the D&O market in June. There are fewer carriers in the property insurance market and the carriers' appetite is smaller, meaning coverage is made from a "tower" of smaller-limit insurers rather than, say, a single carrier wh...
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