Pennsylvania General Services Secretary Don Cunningham recently announced a new insurance contract that slashes the Commonwealth’s premiums to $5.8 million from almost $10 million over a two-year period, while reportedly providing far superior coverage.
The new policy with Lexington Insurance Co. provides coverage for about $11 billion of Commonwealth-owned real estate, raising coverage amounts from $134 million to a more appropriate $250 million, while also providing $100 million in terrorism coverage. The Commonwealth previously had no coverage in the event of acts of terrorism.
“For the first time, we forced brokers as well as underwriters to submit competitive bids,” Cunningham said. “The taxpayers of Pennsylvania are clearly the winners today, as competition drives down costs by almost 50 percent while more than doubling service.”
Additional savings were achieved by combining Pennsylvania’s property coverage with its boiler and machinery coverage, and by significant reductions in brokers’ commissions. Also noteworthy is that for the first time ever, the brokerage component will include participation by the Zigmund Co., a certified Pennsylvania woman-owned business.
At the same time, DGS also achieved additional savings and enhanced coverage for the Philadelphia Regional Port Authority. The PRPA, with DGS’s help, was able to double the amount of property insured and obtain $100 million in terrorism coverage while maintaining the same $1 million in premiums it previously paid.
The new policies will reportedly provide both DGS and the PRPA with greater control over the agencies’ real property and will ensure that the Commonwealth’s valuable assets are fully protected in the future.
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