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RESOLUTION AUTHORIZING A CONTRACT WITH HARTFORD FIRE INSURANCE COMPANY FOR PROPERTY INSURANCE AT THE COST NOT TO EXCEED $171,045 TO BE PAID TO MARSH & McLENNAN AGENCY LLC, AGENT FOR HARTFORD FIRE INSURANCE COMPANY
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CITY PROPOSAL:
RESOLVED, that the proper city officials are hereby authorized to enter into a contract for property insurance with Hartford Fire Insurance Company from February 16, 2017, through February 16, 2018, insuring city-owned structures, miscellaneous equipment and business personal property, and certain Duluth economic development authority (DEDA), Duluth airport authority (DAA), and Duluth Steam property at the initial cost of not to exceed $171,045 payable to Marsh & McLennan Agency LLC, agent for Hartford Fire Insurance Company, payable from the following accounts: Self Insurance Fund 610, Dept./Agency 036 (Insurance Account ), Cost Center 1651 (Insurance-General City) $82,826.25, Cost Center 1652 (Insurance - Water & Gas) $8,107.15, Cost Center 1653 (Insurance - Sewer) $2,499.53, Cost Center 1654 (Insurance - Stormwater) $1,409.67, Cost Center 1656 (Insurance - DEDA) $16,934.18, Cost Center 1659 (Insurance -DAA) $46,784.52, and Cost Center 1664 (Insurance - Steam) $12,483.70, Obj. 5360 (Insurance).
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes a one-year contract from February 16, 2017 through February 16, 2018, with Hartford Fire Insurance Company for property insurance in the amount of $171,045 to be paid to Marsh & McLennan Agency LLC, agent for Hartford Fire Insurance Company. DEDA, DAA and Duluth Steam will reimburse the city for their portion of the cost. City officials are also authorized to purchase additional insurance as necessary at a cost of 52.4 cents per thousand dollars of insured value plus required state and engineering fees.
The Purchasing Division issued an invitation to bid on November 28, 2016, and received five bids. The City Investigator and Claims Agent reviewed the bids and recommended contracting with Hartford Fire Insurance Company, as they offered the best coverage at the best price. The bids received are as follows:
Hartford Fire Insurance Co. $171,045.00
Chubb Insurance $189,267.00
Great American/Homeland/Landmark American $239,902.88
League of Minnesota Cities $143,270.00
FM Global (our current carrier) $193.039.00
The League of Minnesota Cities provided the lowest cost, but the coverage did not meet the City’s needs.
The premium cost has increased from 51 cents per thousand dollars of insured value to 52.4 cents per thousand dollars of insured value from 2016 to 2017. However, the additional costs include improved deductible for flood coverages, and a guaranteed renewal price for one additional year.