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Cyber Insurance Placement and Renewal of Excess Liability and Automobile Physical Damage Insurance [2024-2025]
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DESCRIPTION:Cyber Insurance Placement and Renewal of Excess Liability and Automobile Physical Damage Insurance for Policy Period 2024-2025. |
AGENDA NO: Click or tap here to enter text. |
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ACTION REQUEST: ☒ Approval ☐ Review Comment ☐ Information Only ☐ Other |
RECOMMENDATION:
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To ratify the Chief Executive Officer’s action with the placement and renewal of specified insurance coverages for the policy period 8/1/24-7/31/25 in the amount of $5,080,548.11.
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ISSUE/BACKGROUND:
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RTA annually renews its Excess Automobile Liability/General Liability [“Excess AL/GL”] and Automobile Physical Damage [“APD”] insurance coverages on August 1st.The policies are marketed and placed by the RTA insurance broker of record, The Kennedy Financial Group of Louisiana, Inc., and provide optimal coverage at the most competitive cost.
In addition, the broker has recommended Cyber Insurance coverage for protection from data breaches and other cybersecurity issues. RTA requests placement of this specialized coverage with optimal coverage at the most competitive cost.
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DISCUSSION:
It is necessary that RTA proceed with the renewal of the Excess AL/GL and APD insurance coverages through the RTA broker of record, The Kennedy Financial Group of Louisiana, Inc., on a timely basis:
Excess AL/GL: Limits $5,000,000; Excess Retained Amount [“SIR”]: Automobile - $1,500,000 per accident; General - $500,000 per occurrence.
Automobile Physical Damage: Total Insured Value [“TIV”]: $95,131.813 covering all RTA vehicles (revenue and non-revenue) with a $65M flood limit and a $50,000 deductible (except for named windstorm and flood at 3% per affected TIV with a per occurrence minimum of $250,000).
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Relative to Excess Liability [“Excess AL/GL”], the total cost for the expiring Excess AL/GL program [2023-2024] was $2,684,160.
Underwriters willing to write automobile liability for public transportation entities continue to confront significant losses nationwide. The Regional Transit Authority faces additional challenges because numerous markets willing to write automobile liability for buses will simply not insure streetcars. Further, due to hardened market conditions in a post-COVID-19 environment, an increase in premiums is unavoidable.
However, recent improvements in safety, loss control, and risk management at RTA have resulted in a lower premium structure than originally anticipated, with the total cost for the Excess AL/GL
renewal program [2024-2025] of $2,887,569.00.
This represents an increase of $203,409.00, or approximately 7% over last year’s Excess AL/GL premium, a conservative increase given an uptick in renewal exposures, including recent increases
in service and ridership, and the addition of new vehicles to the RTA fleet.
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Relative to Automobile Physical Damage [“APD”], although the declining property market has carriers reducing their capacity in many instances, aggressive broker marketing has actually resulted in a lower renewal premium this year.
The expiring APD insurance for 2023-2024 covered vehicles with a Total Insured Value [“TIV”] of $86,185,141 for a premium of $2,202,363.79.
The current recommended APD renewal for 2024-2025 will cover vehicles with a TIV of $95,131,813, which represents a 10% increase over the 2023-2024 TIV. Notably, however, the total renewal APD premium is now $2,177,341.00, or approximately 1% lower than last year’s APD premium.
The new Cyber Liability coverage, referenced above, shall protect against data breaches and other cybersecurity issues. This coverage is recommended for a competitive cost of $15,638.11 with a $2,000,000 limit and a $10,000 deductible.
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Details of the respective coverages can be found in the Resolution and associated attachments.
FINANCIAL IMPACT:
$5,080,548.11
Funds for these contracts and related endorsements are available from the RTA Operational budget:
Excess Automobile /General Liability: 01-8300-02-9131-169-00-00-00000-00000
Automobile Physical Damage: 01-8300-02-9132-169-00-00-00000-00000
Cyber Liability 01-8300-02-9181-169-89-00-00000-00000
NEXT STEPS:
Proceed with the renewal of insurance coverages as indicated above.
ATTACHMENTS:
1. Resolution for Cyber Insurance Placement and Renewal of Excess Liability and Automobile Physical Damage Insurance Coverages for Policy Year August 1, 2024 to July 31, 2025
2. RTA Comparison Spreadsheet 8/1/24-25 Insurance: Expiring versus Renewal
3. Markets Approached List [Excess AL/GL]
4. Markets Approached List [APD]
5. Markets Approached List [Cyber Liability]
Prepared By: Marc Popkin
Title: Risk Management Counsel
Reviewed By: Gizelle Banks
Title: Chief Financial Officer
7/18/2024
Lona Edwards Hankins Date
Chief Executive Officer