Title:
Consider and take action on a resolution authorizing a two-year professional services agreement with Arthur J. Gallagher & Co for risk advisory and insurance brokerage services in an amount not to exceed $98,455 (Director of Human Resources)
Background:
Approval of this item will authorize the City to enter into an agreement with Arthur J. Gallagher & Co. to provide Risk Advisor and insurance brokerage services.
The City issued Request for Proposals No. 26-019 seeking qualified firms to provide risk advisory and insurance brokerage services for the City. Proposals were evaluated based on criteria that included experience with public entities, service model, qualifications, cost, and innovative approaches to risk management. Arthur J. Gallagher & Co. was selected as the highest-ranked firm following the evaluation process.
Arthur J. Gallagher & Co. demonstrated extensive experience providing risk management and insurance brokerage services to public sector clients and presented a comprehensive approach aligned with the City’s risk management needs. The proposed scope of services includes insurance marketing and placement, claims advocacy, risk analysis, contract review, and ongoing advisory services. Gallagher also submitted the most cost-effective proposal among the finalist firms. The proposed first-year annual fee is $48,500, with a 3% annual increase, resulting in a total two-year cost not to exceed $98,455.
Under the City’s previous arrangement, the risk advisor was compensated through insurance company commissions. Under the proposed agreement, Arthur J. Gallagher & Co. will be compensated through a flat annual fee paid directly by the City and will not receive commissions, contingencies, overrides, or other incentives from insurance companies. This flat-fee structure provides greater transparency, cost predictability, and accountability, and removes any potential conflict of interest by ensuring the advisor’s compensation is not tied to premium...
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