HomeMy WebLinkAboutAGENDA REPORT 1995 0607 CC REG ITEM 11E44° -11 6
ITEM I' s E .
CITY OF MOORPARK
CITY COUNCIL AGENDA REPORT
TO: The Honorable City Counci
FROM: Richard Hare, Deputy City
DATE: May 31, 1995 (Meeting of
oowARK, CAUFORNA
c� cound� meeting
of 194
A ON: _a4 C14: kW
SUBJECT: Consider Changing the Insurance Requirements in City Professional Service
Contracts for Professional Liability Insurance including Errors and Omissions
Coverage
Discussion
The City currently requires that architects and engineers working on building designs and other
structures have a professional liability insurance policy which includes errors and omissions
coverage. The requirement stipulates that the insurance be written on an "occurrence basis"
which covers when the cause of the claim occurs. Research into the availability of this type of
coverage indicates that it is no longer available. Professional liability policies are now being
written on a "claims made" basis. That is, if a claim is made during the period of the policy it is
covered by the insurance policy.
This research was initiated after attempting to qualify an architect for the Mayflower Market
project. Both of the top two firms were having difficulty finding the required insurance coverage.
Contacts were made with insurance underwriters in Los Angeles and New York and it was
determined that "occurrence based" policies were no longer being written for in the professional
liability market.
It is in the City's interest to transfer the risk to the design architect in the areas that the City is
unable to control, such as design or the exercise of professional judgement. In order to
accomplish this the City requires professional liability insurance. A claims made policy required
for one year provides some protection to the City from any errors or omissions made by the
design architect, but in a subsequent year if a problem comes to light the City does not have the
buffer of the architects professional liability policy if the architect decides not to renew coverage.
Staff recommends that the professional services contract for design work, inspection, project
management, engineering, architectural or other professional functions related to streets, bridges,
facilities or buildings be amended to allow professional liability insurance to be written on a claims
made basis and that the contractor will maintain the coverage for two years after completion of
the project. This will afford some protection beyond the current year. The language of the
contract will allow the policy to be written on an occurrence basis in the event the market changes
in the future.
RHAmpk\PLI_E&O.INS
Recommendation
Authorize the amendment of the professional services contracts currently used by the City to
allow professional liability insurance on a claims made basis with certification by the contractor
that they will maintain coverage for two years after completion of the project.
RH:\npk\PLI_E&O.INS