Metro - File #: 2023-0013

• File #: 2023-0013
• Type: Program
• Status: Passed
• File created: 1/10/2023
• In control: Finance, Budget and Audit Committee
• On agenda: 4/19/2023
• Final action: 4/27/2023
• Title: AUTHORIZE the Chief Executive Officer to negotiate and purchase All Risk Property and Boiler and Machinery insurance policies for all Metro properties at a not to exceed premium of $8.5 million for the 12-month period May 10, 2023, through May 10, 2024.
• Sponsors: System Safety, Security and Operations Committee
• Indexes: Budget, Budgeting, Expo Line Operating Project (Project), General Overhead (Project), Gold Line Operations (Project), Insurance, Los Angeles International Airport, Los Angeles Union Station, Maintenance practices, Metro Rail A Line, Metro Rail B Line, Metro Rail C Line, Metro Rail E Line, Metro Rail K Line, Metro Rail L Line, Non-revenue Vehicles, Operations and Maintenance, Operations Maintenance (Project), Operations Transportation (Project), Owned Property (Project), Program, Program Management, Project management, Protection, Purchasing, Rail Operations - Blue Line (Project), Rail Operations - Green Line (Project), Rail Operations - Red Line (Project), Rail Operations Control Center, Rail Operations-Crenshaw Line (Project), Regional Connector Transit Corridor Project, Rolling stock, Station operations, Terrorism, Transit System, Union Station Property Management (Project), Westchester

Date	Action By	Action	Result
4/27/2023	Board of Directors - Regular Board Meeting

Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
APRIL 19, 2023

Subject
SUBJECT: PROPERTY INSURANCE PROGRAM

Action
ACTION: APPROVE RECOMMENDATION

Heading
RECOMMENDATION

Title
AUTHORIZE the Chief Executive Officer to negotiate and purchase All Risk Property and Boiler and Machinery insurance policies for all Metro properties at a not to exceed premium of $8.5 million for the 12-month period May 10, 2023, through May 10, 2024.

Issue
ISSUE

The All Risk Property and Boiler and Machinery insurance policies expire on May 10, 2023.

Background
BACKGROUND

Metro's insurance broker, USI Insurance Services ("USI"), is responsible for marketing the property insurance program to qualified insurance carriers. In this challenging hard market, quotes are currently being received from, and negotiations are ongoing with, carriers with A.M. Best ratings indicative of acceptable financial soundness and ability to pay claims. Premium indications are based on current market expectations. Final pricing, however, is not yet available as USI continues to broker the most competitive pricing for Metro.

Metro established a Excess Commercial Property Insurance program to protect against insured losses. Each year, Risk Management meets with USI to prepare for the upcoming marketing process and secure the data required to approach underwriters and obtain the most competitive coverage and premium available.

Initial discussions begin in the first quarter of the fiscal year through an evaluation of market conditions to determine the availability of coverages and what premium levels are indicated. Once established, an annual stewardship meeting is conducted in September to review what data will be required, including new infrastructure, such as rolling stock (bus, rail, and non-revenue vehicles), real property (buildings and facilities), business personal property (equipment, furniture), and newly completed projects as the agency accepts each. Risk Management obtains statu...