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HomeMy WebLinkAboutResolution - 2009-R0008 - Purchase Property Insurance - ACE Fire Underwriters Insurance Company - Montford - 01_08_2009Resolution No. 2009-R0008 January 8, 2009 Item No. 5.2 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock or his designee BE and is hereby authorized and directed to purchase for and on behalf of the City of Lubbock, property insurance by and between the City of Lubbock and ACE Fire Underwriters Insurance Company in the amount of $50,000,000 insurance coverage for Montford Darn, pursuant to the terms and conditions attached hereto as Exhibit "A," and in a final form acceptable to the City Manager and City Attorney for a total premium in an amount not to exceed $133,722; and THAT the City Manager or designee may execute any routine documents and forms associated with said insurance coverage. Passed by the City Council this 8th day of January , 2009. e -J� 1110�4 — TOM MARTIN, MAYOR TTEST: Garza, City AS TO CONTENT: n, Director of VED AS kgrmnt-COL & ACE Fire Underwriters Ins Cores 17, 2008 Resolution No, 2009-R0008 John T. Monfford Dam Proposal of Insurance Policy Term 1118109 to 1/18/10 air Prepared by: Robert S. Bookhammer III, ARM-P, CSRM Sr. Client Executive/Sr. Vice President Anne Street, CPCU, AU, CSRM Commercial Account Executive Kim Englett, ACSR Commercial Account Associate 5956 Sherry Lane, Suite 2000 Dallas, TX 75225 Phone: (214) 365-9150 Fax: (214) 365-9141 Please refer to the policy contract for specific terms, conditions, limitations and exclusions. Ell 58 WACHOVIA INSURANCE ►SERVICi'ES Table of Contents Overview ■ Service Team ■ When to Notify Wachovia Insurance Services ■ Partnership Expectations Premium ■ Premium Comparison • Premium Summary ■ Marketing Summary Named Insured Schedule Property Coverages to Consider Insurance Company Financial Ratings 59 IMPORTANT DISCLOSURES Insurance products are offered through Wachovia Insurance Services, Inc. and are underwritten by unaffiliated insurance companies. The coverage and limits presented in this proposal are a simplified outline of the respective insurance policies. The actual policies issued by the insurance company govern the coverage provided, and should be read for coverage terms, limits of liability, definitions, exclusions and conditions pertaining to your specific insurance program. This proposal is based on exposures to loss and other underwriting information provided by the client and made known to Wachovia Insurance Services, Inc. You must report all additions or corrections to these exposures so we may arrange the proper coverage. All property values used in this proposal were provided by the client and should be carefully reviewed and/or appraised for accuracy. Higher limits and additional coverages may be available upon request. Wachovia Insurance Services, Inc. has attempted to place your business insurance with markets that have displayed evidence of being properly managed and of strong financial condition. For more information about Wachovia Insurance Services insurance carrier selection and monitoring, please refer to the Insurance Company Financial Rating section. In the pages that follow, there may be proposals from companies that are identified as Non -admitted or Surplus Lines insurers. This designation means the insurance company is not licensed to do business in your state of domicile. The facts you should consider before placing coverage with a Non -admitted insurance company are as follows: • If the Insurance Company becomes insolvent, the state insolvency fund will not cover any claims. • Non -admitted carriers do not have to file their rates with the state and therefore their rates are not regulated. The use of Wachovia Premium Finance, Inc. is not a requirement for the purchase of insurance. 60 SERVICE TEAM SERVICE TEAM LEADER Bob Bookhammer, ARM-P, CSRM If you have a question about coverage provided Senior Client Executive by your current insurance program or you need Direct Dial Number 214-365-4703 to discuss present or future changes in Email address: protection, please contact: bob. bookhammerCo�wachovia.com POLICY CHANGESIBILLING QUESTIONS Anne Street, CPCU, AU, CSRM If you need to make a change during the policy Commercial Account Executive term or have questions about invoices or Direct Dial Number 214-365-4738 charges on your account, please contact: CLAIMS Marc LaChey, AIC, AIM, ARM If you need to report a claim, find out the status Claim Consultant of a claim, or need Workers' Compensation Direct Dial Number 214-365-4701 First Report of Injury forms, please contact: LOSS CONTROL If you need assistance with a safety program or Scott Bellamy, CSP, ARM advice on how to reduce losses and Risk Control Senior Consultant consequently the cost of your insurance, please Direct Dial Number 214-365-4753 contact: TELEPHONE NUMBERS Nationwide Toll Free: 800-531-2034 Direct Direct: 214-365-9150 Facsimile Machine Fax: 214-365-9141 OFFICE HOURS 8:00 — 5:00 CST Monday — Friday 61 WHEN TO NOTIFY WACHOVIA INSURANCE SERVICES It is important that you advise Wachovia Insurance Services of any material changes in your operations which may have a bearing on your insurance program. Your insurers have evaluated and accepted the risks on the basis of the information given. Any variation of these details could lead to complication in the event of a loss. These changes may include, but are not limited to: • Changes of personnel affecting responsibility for insurance decisions. • Personnel traveling overseas/on temporary assignment overseas/working on military bases. • Acquisition or creation of new companies or subsidiaries and/or mergers in which you are involved or any legal change in the corporate structure. • Purchase, sale, lease, construction, or occupancy of new premises; real estate alteration, vacating the premises or temporary unoccupancy; extension or demolition of existing premises. This applies for both domestic and foreign locations. • Increase in values of building, business personal property, or inventory for both scheduled and unnamed locations. • Removal of business personal property or stock to new or temporary locations. • Addition of new locations, equipment or vehicles, whether hired, purchases, leased or borrowed. • Changes in processes, occupancy, products, revenue, sales, or business operations. • Addition, alteration or temporary disconnection of fire or burglary protection systems. • Use of owned or non -owned aircraft or watercraft. • Major changes in value or nature of goods being shipped. • Employment of personnel in states in which you were previously not doing business. • Election or appointment of a new C.E.O. or C.O.O., or change in control of either the Board of Directors or the stock ownership of the company. • Changes in ERISA Plan Assets. • Any written contracts executed with contractor, subcontractors, suppliers, or others. 62 Coverage Property TRIA Total Premium PREMIUM OVERVIEW PREMIUM COMPARISON Expiring Renewal Premium Premium $121,570 $121,570 $12,152 $12,157 $133,722 $133,722 63 PREMIUM SUMMARY Coverage Description Premium Property........................................................................................................................... $133,722 TOTAL............................................................................................................................. $133,722 64 COMPENSATION POLICY Transparency regarding our sources of income is critical to maintaining the confidence of our clients. Wachovia insurance Services, Inc. receives the majority of its remuneration for insurance placement or related services from commissions paid by insurance companies or fees paid by the client. All forms of our compensation are described below. Commission Commissions are paid to us by the insurer for the placement or renewal of insurance policies, day-to-day servicing of the account, claims handling and other services. Commissions are generally determined as a percentage of premiums but can also include specified dollar amounts per policy. Commission rates differ by type of policy and insurer. In some instances, insurers may pay us contingent commissions based on factors that are not client -specific including total premium volume, aggregate loss experience or other measures. Generally, we do not know if an insurer will pay us such commission or the amount until after the end of the insurer's underwriting year. • Fee Fees we receive from the client are agreed to in writing by the client and us in a fee for service agreement for the placement of insurance, account servicing, claims handling, and other client services. For those premiums attributed to policies covered under a fee agreement, we will accept no other compensation from the insurer without written consent of the client. • Vendor Payments Wachovia Insurance Services receives payments from vendors (other than insurance companies) for placement of products and services, program oversight, and day -to day servicing of the account. • Interest Wachovia Insurance Services receives interest income on insurance monies in our bank accounts. If we finance or assist with the financing of your insurance premiums, Wachovia Insurance Services may receive income from the premium finance company. • Expense Reimbursement 1 Administrative Service Fee Occasionally, insurance companies will pay Wachovia Insurance Services fees to help defray the costs of training and education or to provide services on their behalf for the client. These services can include policy issuance, record retention, risk control, data reporting, or other services not reflected in normal policy commission rates. We may provide these services directly or through a third party. In the event insurance is placed through a Wachovia Insurance Services affiliated company, including wholesale insurance broker E-Risk or Besso Limited, or premiums are financed through Wachovia Premium Finance, Inc., a Wachovia Insurance Services affiliated company, that entity will also receive compensation. If you have any questions or require more information regarding our compensation for the placement of insurance or other client services, please contact your client executive or local office manager. We will disclose to our clients, upon request, all commission or other compensation we receive while acting on our clients' behalf. 65 MARKETING SUMMARY INSURER RESPONSE MARKETfNG SUMMARY TO FOLLOW 66 NAMED INSURED SCHEDULE John T. MontFord Dam 1 City of Lubbock, TX 1 Lake Alan Henry 67 PROPERTY REAL AND PERSONAL INSURANCE CARRIER: ACE Fire Underwriters insurance Company Admitted or Non- Admitted Admitted: CARRIER RATING: A+ XV as of 11/26/07 (Source: A.M. Beso POLICY TERM: January 18, 2009 to January 18, 2010 PREMIUM: $133,722 COVERAGE: The following location(s) will be covered for direct physical loss to insured property in accordance with the policy terms and conditions: John T. Montford Dam PERILS: All risks of direct physical loss or damage including Flood, Earth Movement and Named Windstorm, excluding Boiler & Machinery (Subject to policy conditions & exclusions) LIMIT: $50,000,000 Per Occurrence (Blanket) VALUATION: Replacement Cost, if replaced, otherwise Actual Cash Value DEDUCTIBLE(S): $2,000,000 per Occurrence FORM. ACE Inland Marine — Engineered Risk Manuscript Policy Form, including, but not limited to the following mandatory company forms/endorsements: • ACE USA Pollution & Contamination Exclusion • Electronic Data/Cyber Risk Endorsement • Asbestos Exclusion • Mold/Fungus Exclusion • Nuclear, Chemical & Biological Exclusion Endt. 68 COVERAGES TO CONSIDER In evaluating your exposures to loss, we have been dependent upon information provided by you. If there are other areas that need to be evaluated prior to binding of coverage, please bring these areas to our attention. Specifically, we ask that you review the following items: HIGHER LIMITS: In today's litigious society, many businesses have found it necessary to increase the limits of liability to ensure they are adequate to protect their assets in the event of a loss. Higher limits of liability may be available. Please carefully review the limits to ensure your level of comfort with the limits. 69 INSURANCE COMPANY FINANCIAL RATINGS Wachovia Insurance Services Insurance Carrier Monitoring As a benefit to our clients, Wachovia Insurance Services, Inc. has a rigorous and disciplined process to monitor the financial strength of carriers whose products we sell. This is accomplished through Carrier Financial Strength Committees, made up of representatives from Wachovia Insurance Services and Wachovia Corporation's Legal, Compliance, and Operational and Credit Risk Management areas. There are three committees, one for each major line of business: 1) Property & Casualty, 2) Life and Health, and 3) Annuities. Each Committee meets at least quarterly. Based on analysis of quarterly statutory financial results, ratings provided by independent rating agencies, and financial analysis by Committee members, the Committees approve carriers with whom our sales professionals may place new and renewal business. The Committee also seeks to identify carriers whose financial strength is deteriorating so that we may recommend appropriate proactive action. The Committees are supported by ALIRT Insurance Research Service, LLC, a third -party vendor that specializes in providing analysis and consultative services regarding financial strength of insurance carriers to insurance agents and brokers. Although we take these actions to monitor financial strength of carriers, Wachovia Insurance Services does not guarantee performance of any carrier. At a client's request, Wachovia Insurance Services occasionally may place business with carriers not approved by the Committees. Most typically, these cases would involve specialized products or undersupplied markets where availability of insurance coverage from approved carriers is limited. In these cases, the client is required to sign an acknowledgement stating that the carrier does not meet Wachovia Insurance Services' normal ratings standards and that Wachovia Insurance Services does not guarantee performance of any carrier. When carriers are removed from approved status; typically due to concerns over financial strength or lack of competitive products; the Committee works with Wachovia Insurance Services to communicate this decision to all affected parties. Plans are designed and implemented to ensure the orderly migration of affected clients to alternate insurance carriers. Objective Assessments Help Insurance Buyers Make Informed Decisions As your insurance broker, one of our objectives is to provide you with information and assessments published by rating agencies on the financial stability of the insurers currently underwriting your coverage's, or of those insurers we recommend you consider. Wachovia Insurance Services uses information published by independent rating agencies A.M. Best and Standard & Poor's, among other factors as described above, to assess which insurer's to recommend. The A.M. Best rating for the carriers represented in this proposal are as follows: ACE Fire Underwriters Insurance Company A+ XV 70 Wachovia Insurance Services Recommendation Guideline Financial Strength Ratings q++ AAA Superior Recommended, Very Strong q+ A AAA Excellent Recommended, Strong A- AA AA- B++ q+ Good Acceptable wJ B+ q reservations A- I B I BBB+ Fair, Vulnerable to I Not recommended C B- BBB BBB- conditions C++, C+ BB+ Marginal, Unacceptable BB Financial security BB- may be adequate C, C- B+ Weak, vulnerable Unacceptable B B- D, E, F CCC Poor, Extremely Unacceptable CC Vulnerable or C Failed 71 Financial Size Ratings A.M. Best also assigns categories to insurance companies to indicate levels of statutory surplus and related funds. While financial size is not solely indicative of an insurer's financial stability, Wachovia Insurance Services advises clients to select insurance companies with a minimum Financial Size Rating of VII ($50 million to $100 million adjusted surplus funds). AM Best Adjusted Policyholder AM Best Financial Size Surplus Financial Category (in millions) Size Category - Adjusted Policyholder Surplus (in millions) / II 11 1 $750 111 /$1,000 1 1$1,500 $111 1 11 Above $2,000 '0 11 1 -�� 72 JOHN T. MONTFQRD DAM / CiTy of LUBBOCK, TX / LAKE ALAN HENRY PROPERTY INSURANCE RENEWAL PROPOSAL JANUARY 18, 2009 TO JANUARY 18, 2010 CARRIER: ACE FIRE UNDERWRITERS INSURANCE COMPANY PREMIUM: $121,570 plus $12,152 Terrorism RATE: 0.1696 BEST'S RATING: A XV 73 Executive Summary INTRODUCTION NAPCO LLC is pleased to continue our partnership with Wachovia Insurance Services and the John T. Montford Dam/City of Lubbock, and we are grateful to have been given the opportunity to provide our Property Insurance Renewal Proposal. NAPCO prides itself on providing our clients with the highest level of professional program design, marketing and service delivery. Our goal is to continue our long-term business partnership with Wachovia Insurance Services and John T. Montford Dam/City of Lubbock. We recognize that in order to achieve this goal, we must continue to establish trust and commitment to positively impact our mutual relationship. BRIEF MARKET UPDATE The insurance market was recently thrown into the national spotlight with one of the largest insurance companies, AIG, coming extremely close to collapsing. With the global financial turmoil stemming principally from the credit crisis, the rippling effect has reached into our industry and affected stability and ratings of many insurance companies. In response to AIG"s questioned stability, reports indicate that most companies are well capitalized and meet or exceed local regulatory capital requirements. The companies continue to operate normally to meet obligations to policyholders. Premiums had continued on a downward slide during the third quarter of 2008. However, with investment declines accelerating, coupled with higher underwriting losses, carrier profitability is being quickly eroded. 2008 has also seen higher global non -catastrophe losses plus claims from two major hurricanes. The silver lining is that insurers had built up large amounts of surplus over two years of quiet wind seasons in the United States. Profits of $65.9 billion in 2006 and $61.9 billion in 2007 brought the property/casualty industry to what the Insurance Information Institute (111) refers to as the "cyclical peak." This year's hurricane season, though active from a storm -count standpoint, was of little consequence until late August when Hurricane Gustav slammed into the Gulf Coast, reaching Category 4 at one point, and bringing back memories of Hurricane Katrina, almost three years ago to the day. Even though claims payouts are expected to be in the billions, the storm fortunately failed to make a direct hit on New Orleans. Two weeks later, Hurricane Ike made landfall as a massive Category 2 hurricane along the Texas and Louisiana coasts. One of this storm's threats was its storm surge, which the National Hurricane Center initially estimated to be as much as 25 feet; however;, it topped out at only 13 feet. That was still enough to cause overflows at flood walls and barriers, resulting in significant flood damage to Galveston. The day after Ike's landfall, most of Houston remained without power, thereby contributing to a high number of business interruption claims. Ike also caused heavy rainfall and strong wind damage as its effects continued through Illinois, Indiana, Missouri, Ohio, Tennessee, Kentucky, and Arkansas. Hurricane Ike's damage is being estimated at $13-21 billion, of which $10-15 billion is estimated for wind and storm surge in Texas and Louisiana. This updated range of insured losses makes Ike the third most costly US hurricane after Katrina and Andrew. 74 At this point, much of the marketing activity taking place is suggesting that pricing softness has leveled off. However, good accounts with excellent loss histories and detailed underwriting information, when presented properly, may still see reductions. Accounts that do not fit into this portfolio may experience flat renewals or are being asked to take higher retentions. While the credit crisis and claims activity of this season may eventually alter underwriters' perspectives and/or rating philosophies, the market is still willing to remain responsive and demonstrates stability. Ultimately, the insurance industry is loss and capacity driven, so the market may eventually turn since stockholder returns are down due to soft pricing practices, losses, and decreased investment income. The volatile stock market will increase pressure on carriers to produce true underwriting profit. As was seen in the post Katrina -Rita -Wilma market, today's reduced capital (due to huge investment losses + underwriting loss) and thus reduced policyholders surplus may cause rating agencies to more strongly dictate the degree of writings that a carrier can take on (which affects both overall premium and amount of catastrophe exposure that can be written) and still maintain an acceptable rating. As a result, underwriters (particularly reinsurance underwriters) may rekindle their apprehensiveness for catastrophe risk and maintain a semblance of underwriting discipline. Should the market turn to higher pricing - as a result of reduced profitability, increasing need for higher priced reinsurance, or rating agency scrutiny - we may again see smaller primary layers of coverage, the re -introduction of "buffer layers", and the Bermuda market becoming more active with their capacity. THE MARKETING EFFORT The price of "insurance" has historically fluctuated depending on the state of the market coupled with how the market perceives John T. Montford Dam/City of Lubbock's particular exposures and excellent individual loss history. Our primary objective remains constant -- to assist you using a controlled marketing approach in order to manage these fluctuations. By focusing on market additions and exploring alternative programs, our goal is to design and implement a property insurance program which protects John T. Montford Dam/City of Lubbock's physical assets and earnings while optimizing John T. Montford Dam/City of Lubbock's total cost of risk (retention + risk transfer costs). The key element in our approach to John T. Montford Dam/City of Lubbock's program was to maintain the optimal balance of pricing and coverage - in a changing marketplace — through negotiations with incumbent carriers. This strategy takes advantage of today's favorable pricing and coverage environment due, in large part, to the past two years of minor industry catastrophe losses. In keeping pace with the changing market conditions, our overall objectives included: Working closely with Wachovia Insurance Services to secure accurate and up-to- date information. Containing John T. Montford Dam/City of Lubbock's risk transfer and risk retention costs through effective program design. VIR Providing John T. Montford Dam/City of Lubbock's with aggressive, yet professional representation in the insurance market, by accessing the allocated standard, surplus lines and reinsurance capacity assigned to NAPCO. Designing an efficient and effective program through capturing underwriter's (comfort zone) capacity enhancing John T. Montford Dam/City of Lubbock's flexibility to react to market swings. Maximizing carriers' net and treaty capacity, minimizing the need for facultative reinsurance, further insulating the program from market swings. TFRRORISNI Terrorism Risk Insurance Act of 2002 (TRIA) / TRIA Extension Act of 2005 / Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA) The tragic events of September 11, 2001 caused Congress to pass the Terrorism Risk Insurance Act of 2002 (TRIA). The Act provides that all property and casualty insurers must offer their policyholders the opportunity to purchase coverage for acts of terrorism, while providing a temporary program that, in the event of major terrorist attack, allows the insurance industry and federal government to share losses according to a specific formula. TRIA was signed into law on November 26, 2002 and renewed again for two years in December 2005. Passage of TRIA enabled a market for terrorism insurance to begin to develop because the federal backstop effectively limits insurers' losses, greatly simplifying the underwriting process. TRIA was extended for another seven years to 2014 in December 2007. The following describes various aspects of the Act, including amendments incorporated by the recent TRIPRA: ♦ Under the Act, Insurers are obliged to offer coverage for certified acts of terrorism through December 31, 2014. We have shown these premiums separately as required under the Act. ♦ An act of terrorism is defined as any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States: I. To be an act of terrorism; 2. To be a violent act or an act that is dangerous to human life, property or infrastructure; 3. To have resulted in damage within the United States or outside the United States in the case of certain aircraft or vessels, or on the premises of a United States mission; and 4. To have been committed by an individual or individuals as part of an effort to coerce the civilian populations of the United States or to influence the policy or affect the conduct of the United States Government by coercion. ♦ No act will be certified as an act of terrorism if: • It does not meet the above criteria; • The act is committed as part of the course of war declared by Congress; • Losses resulting from the act, in the aggregate for insurance subject to TRIA, do not exceed $5,000,000. ♦ The following are some of the more significant changes in the recent extension of the Act: 76 • The definition of a certified act of terrorism was revised to eliminate the requirement that the individual(s) are acting on behalf of any foreign person or foreign interest. For policies in effect prior to December 26, 2007 with terms ending after January 1, 2008, insurers are not required to offer the expanded coverage of "domestic" acts of terrorism. • Requires clear and conspicuous notice to policyholders of the existence of the $100 billion aggregate cap to policyholders. • The insurer's deductible remains at 20 percent of an insurer's direct earned premium, and the federal share of compensation is 85 percent of insured losses that exceed insurer deductibles. • The program trigger is at $100 million for all additional program years. • The industry as a whole must cover a certain amount of the losses through deductibles and copayments. This amount is $27.5 billion in 2007. If this retention is found to be below this amount, the federal government can recoup the difference between the actual amount it paid and the required retention by applying surcharges not to exceed 3 percent of premium. Insurers do have to comply on policies with an inception date of December 26, 2007 and forward. The Department does recognize that with the late date of passing the Act, insurance companies may not have the necessary wordings to address this change and have given them until March 31, 2008 in order to reach the compliance demanded to meet the Act. This may result in some late documentation, although all insurance companies are striving to comply as soon as possible. Non- Certified Acts of Terrorism This coverage is available from many carriers now, though usually only if TRIPRA is purchased. As with TRIPRA, pricing and forms vary considerably from company to company. Some merely do not attach a terrorism exclusion; some have a special endorsement attached to the policy form. Additional information is available upon request. CONCLUSION Once again, your NAPCO team extends its thanks for the privilege of partnering with Wachovia Insurance Services and John T. Montford Dam/City of Lubbock on this program. We appreciate all the help and information supplied to us by both Wachovia Insurance Services and John T. Montford Dam/City of Lubbock. Beyond taking great pride in the program we have negotiated on your behalf, we truly value our business relationship with Wachovia Insurance Services and John T. Montford Dam/City of Lubbock and look forward in continuing to add value in your Property Insurance Renewal Program. 77 . N NAPCOLLC AUTHORIZATION OF PROPERTY INSURANCE This authorization of insurance may not comply with the specifications submitted for consideration. Please read this authorization carefully and review the policy forms for the actual coverages provided. Please provide written instructions to NAPCO in order to effect such coverage with the insurance companies outlined herein. This insurance quotation will be terminated and superseded upon delivery of the formal Confirmation of Insurance issued to replace it. Named Insured: John T. Montford Dam / City of Lubbock, TX / Lake Alan Henry Mailing Address: P.O. Box 2000 Lubbock, TX 79457 Policy Period: January 18, 2009 to January 18, 2010 at 12:01 AM local time of the insured address. Coverages: Property Damage, Newly Acquired Property, Debris Removal, Pollutant Clean- u , including Terrorism, and as more fully defined in the cow poliq form. ' Perils: All risks of direct physical loss or damage including Flood, Earth Movement wand Named Windstorm, excluding Boiler & Machinery. Territory: Limits of Liability: This policy covers within the fifty (50) states comprising the United States of America and the District of Columbia. $ 50,000,000 per occurrence, except: _ The following sublimits do not increase the above -stated per occurrence limit of liability: $ 50,000,000 per occurrence as respects Property Damage; $ 10,000,000 per occurrence and in the annual aggregate as respects Flood; $ 10,000,000 per occurrence and in the annual aggregate as respects Earth Movement; 5% of the amount of loss, subject to a maximum of $2,500,000 per occurrence as respects Debris Removal. $ 2,500,000 per occurrence as respects Newly Acquired (90 Days Reporting); $ 1,000,000 per occurrence as respects Valuable Papers; $ 1,000,000 per occurrence as respects Accounts Receivable; $ 1,000,000 per occurrence as respects Demolition and Increased Cost of Construction; $ 1,000,000 per occurrence as respects Intake Tower and Outlet Works; $ 100,000 per occurrence as respects Transit; $ 100,000 per occurrence as respects Intake Bridge; $ 25,000 per occurrence and in the annual aggregate as respects Pollutant Clean-up and Removal; And as more ll de�rned in the company�olicy arm. 78 Page 6 of 8 .. N NAPCOLLC AUTHORIZATION OF PROPERTY INSURANCE This authorization of insurance may not comply with the specifications submitted for consideration. Please read this authorization carefully and review the policy forms for the actual coverages provided. Please provide written instructions to NAPCO in order to effect such coverage with the insurance companies outlined herein. This insurance quotation will be terminated and superseded upon delivery of the formal Confirmation of Insurance issued to replace it. Deductibles: $2,000,000 per occurrence. Valuation: Form: Real and Personal Property - Replacement Cost if replaced, otherwise Actual Cash Value. And as more fully defined in the expiring ACE Engineered Risk Manuscript Per the expiring ACE Inland Marine - Engineered Risk Manuscript Policy Form, including, but not limited to the following mandatory company forms/endorsements: • ACE USA Pollution and Contamination Exclusion + Electronic Data/Cyber Risk Endorsement • Asbestos Exclusion • Mold/Fungus Exclusion • Nuclear, Chemical and Biological Exclusion Endorsement Cancellation: Notice of Cancellation or Non -Renewal: - 60 Days Written Notice. - 10 Days Written Notice for Non -Payment of Premium. Other Conditions: TIV: • Loss of Revenue Endorsement — Not Covered • Fire Department Service Charge — Not Covered • Expediting Expense —Not Covered • Extra Expense — Not Covered • Loss Adjustment Ex ep nses —Not Covered Annual Premium: $ 121,570 Property Premium 12,152 Premium for Optional Terrorism Coverage $ 133,722 Total {plus anyapplicable taxes/surcharg Minimum Earned: 1 25% Insurers: ACE Fire Underwriters Insurance Company (Admitted) Best's A+ XV Page 7 of 8 79 Account Team Marketing Broker: Contact John M. Carlsen Phone No. 732-603-2061 E-Mail jcarlsenLcINAPCOilc.com Account Manager: Jennifer Ryan 732-603-2083 ityan@a,NAPCO11c.com Placement Associate: Marco Perci 732-603-2070 mperci@NAPCOlic.com a r %AI NAPCO LLC 333 Thornall Street, 90 Floor, Edison, NJ 08818 Tel: 732-549-5222 Fax: 732-549-0221 www.ngpcollc.com IN NAPCOLLC NAPCO has used due care in the preparation of this document. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. NAPCO shall owe no liability who tsoe ver to any person for any loss or damage caused by or resulting from any error in such information. 80