2002-25080 Reso
RESOLUTION NO. 2002-25080
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING
THE PURCHASE OF ALL RISK PROPERTY INSURANCE
(FINE ARTS) FOR THE BASS MUSEUM OF ART AND THE
CITY IN GENERAL, FOR AN ANNUAL PREMIUM OF
$29,200.00 FOR A ONE-YEAR PERIOD, WITH AN OPTION
TO RENEW FOR TWO (2) ADDITIONAL YEARS,
PROVIDED THE ANNUAL RATE DOES NOT INCREASE BY
MORE THAN TWENTY PERCENT (20%) PER YEAR, AS
PROPOSED,WITH LLOYDS UNDERWRITERS.
WHEREAS, as proposed by Arthur J. Gallagher and Co., the City's broker of record,
the Administration herein recommends the purchase of All Risk Property Insurance (Fine
Arts) for the Bass Museum of Art and the City in general, with L10yds Underwriters, for a
total annual premium of $29,200.00 for a one-year period, with option to renew for two (2)
additional years, provided the annual rate does not increase by more than twenty percent
(20%); and
WHEREAS, funding is available from the Self Insurance Fund Number
540.1792.000390.
NOW, THEREFORE, BE IT DULY RESOLVED THAT THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, hereby approves the
purchase of All Risk Property Insurance (Fine Arts), for the Bass Museum of Art and the
City in general, for an annual premium of $29,200.00, for a one-year period, with option to
renew with L10yds Underwriters for two (2) additional years, provided the annual rate does
not increase by more than twenty percent (20%).
PASSED AND ADOPTED this 11th day of
ATTEST:
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City Clerk
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PORMaLNGWII
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Nay-ZO-ZaOZ 10:08am From-ARTHUR J, GALLAGHER-~IA~I I
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FAX
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To:
Attn:
Fax No:
Subject:
Date:
Pages:
City of MiaJlli Beach
Cliff Leonard
(305) 673-7023
City of Miami Beach- Bass Museum ReDewal
No'Vember 13,2002
[ 2 ], including this COVet sheet.
Dear Cliff:
We are pleased to provide you with the Renewal Proposal for the City of Miami
Beach Bass Museum that expires on December 31, 2002,
please note that the premium has increased from $23,375 expiring to $29,200 at
renewal. This increase is due primarily to current market conditions and also for
$3,620,000 increased in exhibit exposure at the Bass Museum and related traIlSit.
Traditionally the Museum exhibit rate/premium is higher than the storage
rate/premium.
please note that due to changes in the marketplace, there are limited markets for
this type of specialized coverage and many are subject to high minimum
premiums. We have not seen any other market that is able to provide the
coverage at the pricing and terms included with this proposal.
Please feel free to contact our office should you have any questions or if we can
be of additional assistance.
Sincerely,
/5~~~
Lisette de Diego
cc Jori Vander V oart
From the desk 01 ..
Ueette M. de Dlel.o
ARTHUR J. GALLAGHER &. en.
8200 Northwest 4111 Street, SuitB 210
Miami, Fl. 33H 6
Direct 01al;(3051 63e-3'~2
fax: 13051 592-40<.9
Email;l.isette_dediego@Jajg.cCITI
Noy-2D-2DD2 lD:D8am From-ARTHUR J, GALLAGHER-MIAMI I
~D559314D8
T-027 P.D02/002 F-7(3
...
City of Miami Beach Bass Museum
Renewal proposal-12131fl002-1213112OO3
Carrier:
Underwriters at Lloyds
A.M. 881t's Rating;
Terml and Conditions:
A-XY
~ per expiring terms and conditions. summarized below. but including the
increase in limits to accommodate the permanent collection artwork valued at
$3,620,000 in transit and on long-term exhibition at the Museum.
L.ocation covered:
1) Bass Museum- Permanent Collection including -Happy Mother"
Note: Ina-eased from $500,000 to $3,620,000 to accommodate the permanent
collection at the Bass.
2) The FortresS (Storage)- $12.900,000
tiQ!l: Decreased by $3,100,000 due to artwork to be moved to the Bass for
exhibit.
3) Permanent Collection at Palm Beach Fortress- $1,000,000
4) Sculpture located outside 1700 Washington Avenue- $2,000,000
5) Holocaust Memorial-1933 Meridian Avenue- $2,500.000
6) All Other Locations- $1,000,000
7) Loan Collecllon.of Others at the Bass- $3,000,000
8) In Transit- $2,500,000- ~: Increased to $3,100,000 to accommodate the
one lime transit of the permanent collection from Fortress storage to the Bass.
Deductible ('s) :
$5,000, except noll!d below:
Fire. Theft WlIldslOm'! and Vandalism suijeet to the followina deductible:
$100,000 as respects 'Holocaust' sculpture
$5,000 as respect to the 'Happy Mother' and the 'Mermaid'
Flood losses subiecl to the followinG deductible:
$5,000 as respect!; to the 'Happy Mother'
$25,000 as respect 10 the 'Mermaid"
$200,000 as respect to the Bass Museum
$100,000 as respects to Legal Uabilily
Premium:
$29,200
Notes:
1) The Renewal quotation is subject to re-5urvey by I\IIaX5On Young AssoCiateS, Inc. and compUance to any
recommendations made by the Surveyor.
2) Expiring premium is $23.375- Increase due to market conditiOns and increase in exposure at the Bass
Museum.
3) Due to changes in the marketplace, tIlere are limited markets for this type of coverage and many are subject
to high minimum premiums. No other market is available to provide the coverage at ll1e pricing and tanns
inctulled with lhis proposal.
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
m
-
Condensed Title:
Resolution authorizing the purchase of All Risk Property Insurance (Fine Arts) from L10yds Underwriters
for the Bass Museum of Art and the City in general for an annual premium of $29,200 with option to renew
as recommended by Arthur J. Gallagher and Co., the City's Broker of Record.
Issue:
Property Insurance (Fine Arts) for the Bass Museum of Art and the City in general is necessary to protect
the interest of the City. Coverage applies to art owned and on loan to the City at all locations. The city
budgets $45,000 to cover the premium costs. Self.insurance is not recommended as the current estimated
value of all art is $27,000,000.
Item SummarvlRecommendatlon:
Approve the purchase of Property Insurance (Fine Arts) for the Bass Museum and City in general from
L10yds Underwriters.
Advisory Board Recommendation:
I Not Applicable
Financial Information:
Source of Amount Acoount Approved
Funds: 1 $29,200. 540.1792.000390
~ 2
3
4
Finance Dept. Total
City Clerk's Office Legislative TraCking:
I Cliff Leonard
SI n-Offs:
Department Director
AGENDA ITEM C 7r
DATE I).-II~O:J-...
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.ci.miami-beach.fl.us
COMMISSION MEMORANDUM
From:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez t, A ~
City Manager (f"-O
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROVING THE PURCHASE OF ALL
RISK PROPERTY INSURANCE (FINE ARTS) FOR THE BASS MUSEUM
OF ART AND THE CITY IN GENERAL, FOR AN ANNUAL PREMIUM OF
$29,200.00, FOR A ONE-YEAR PERIOD, WITH AN OPTION TO RENEW
FOR TWO (2) ADDITIONAL YEARS, PROVIDED THE ANNUAL RATE
DOES NOT INCREASE BY MORE THAN TWENTY PERCENT (20%) PER
YEAR, AS PROPOSED, WITH LLOYDS UNDERWRITERS.
Date: December 11, 2002
To:
Subject:
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
FUNDING SOURCE
Funds are available from the Account Number 540.1792.000.390.
ANALYSIS
The City's Bass Museum property insurance needs are covered by All Risk Property
Insurance (Fine Arts). This insurance provides coverage at the Bass Museum, its storage
facilities, various sculptures located outside the museum, and art on loan to the Bass
Museum and the City. This policy also covers the Holocaust Memorial as required by
contract between the City and the Holocaust Memorial Committee, Inc.
The current policy with L10yds Underwriters expires on December 31,2002. The annual
premium for the expiring policy is $23,375. The City's broker, Arthur J. Gallagher Co.,
following Administration directions, has identified a replacement policy L10yds Underwriters.
The new policy, which would be effective on January 1, 2003, provides for All Risk
Property Insurance with the only changes being an increase in property values, and
premium rate (attached renewal quote). The new annual premium is $29,200 representing
an annual increase of $5,825.00 (this represents a 25% increase).
The increase in premium is due to current market conditions and change in risk. The Bass
Museum will be moving approximately $3.6 million of the Permanent Collection from
storage back to the museum. The museum is considered a greater risk by insurance
underwriters as compared to offsite storage as it is open to the general public and
exposure for an island community is greater for direct damage due to hurricane and flood.
As a result of changes in the marketplace, there are limited markets for this type of
specialized coverage and many are subject to high minimum premiums. Arthur J.
Gallagher and Co., has advised that L10yds Underwriters is the only market able to provide
the required coverage, pricing and terms. The City has been able to continue this level of
coverage due to a long-term relationship with L10yds Underwriters and an excellent loss
history.
The policy provides for annual renewal. The Administration is seeking authorization to
renew the policy for two additional years provided that the annual rate does not increase
more than twenty percent. The Administration has reviewed with the City's broker and they
concur that the twenty percent cap for the renewal rate is reasonable.
The Administration recommends that purchase of the All Risk Property Insurance (Fine
Arts) for the Bass Museum of Art and the City for an annual premium of $29.200. with
option to renew, as proposed.
GMG:MDB:CL
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