Title: IN1 Property Insurance Broker Contract

Recommendation:
I recommend that the School Board extend the Property Insurance Broker contract with the firm of Arthur J. Gallagher & Company, for the one-year period of September 20, 2005, to September 20, 2006, at an annual fee not to exceed $120,000.00.

Description:

• The annual fee was renegotiated last year to provide that any property insurance commission paid to the   Broker will reduce the $120,000 fee paid by the District.  In some instances a carrier will quote a price/rate for a particular layer/portion of the insurance, which automatically includes commission to the Broker and these carriers will not lower the premium (price/rate) to account for zero commission.  Therefore, when this occurs, Arthur J. Gallagher will now accept the commission and reduce their fee to the School District by an equal amount, thereby increasing the cost savings to the School District.   Last year the District paid no fee to Arthur J. Gallagher & Company.  Additionally, Gallagher will provide a letter from their subsidiaries stating any commissions earned by these subsidiaries on the District's account.

• Arthur J. Gallagher & Company was the highest rated responsive proposer to the Request for Proposals (RFP #01C-018S) for Property Insurance Broker services and approved by the School Board on September 19, 2001.

• The Request For Proposal (RFP) in 2001 allowed for a contract with renewals to the highest rated proposer.  This will be the fourth one-year renewal and we do not believe a new RFP would find a more qualified broker for our property insurance requirements.
 
• Arthur J. Gallagher & Company will arrange and place property insurance and boiler and machinery coverage for the District.

• A previous independent review of our property insurance program by the Siver Insurance Consultants rated our program as both "competitively priced and appropriate for the District".

• Arthur J. Gallagher & Company has made a specialty of providing coverages for Florida political subdivisions, including Miami-Dade and Broward County schools.

• Arthur J. Gallagher & Company has experience with clients who sustained major weather related catastrophic losses, such as Miami-Dade schools and Hurricane Andrew, and therefore would be instrumental in assisting PBCSD should we have to navigate large claim losses with our carriers and FEMA (Federal Emergency Management Association).

Financial Impact:
The annual financial impact to the District for this contract is not to exceed $120,000. The source of funds is the General Funds budget.

For Additional Information, contact:
Joseph M. Moore (moorej@palmbeach.k12.fl.us) \Dianne L. Howard

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