Purpose

The Authority manages the insurance policies for Lancashire County Developments Ltd (LCDL) with the assistance of the insurance broker Backhouse.

The Authority pays an annual premium to the insurer to cover each class of insurance. In order to keep policy costs to a minimum, the Authority tends to agree to pay an excess before the insurer starts to pay out, these are known as annual deductibles. The Authority also tends to agree with insurers an Annual Stop Loss (ASL) figure which sets a maximum cap on the total amount the Authority will pay in one year. This is the figure agreed where the Authority's total of claims payments made within the deductible, is the maximum paid. Anything over the ASL the insurers pay / refund to the Authority. This protects the Authority from an unusually high bad claims year, multiple medium size claims that add up and large unexpected financial exposure.

Backhouse, the Authority’s appointed insurance broker who has been procured separately, currently provides support for policy management and the associated tendering activity.

The existing LCDL Property Insurance Excluding Building 3.2 & 3.3 contract expires on 31st May 2026.

To ensure continued insurance provision, which is compliant with procurement rules it is recommended that the Authority undertakes an above‑threshold open procurement to establish a new Long‑Term Agreement (LTA) for the LCDL Property Insurance Excluding Building 3.2 & 3.3 policy placement. The anticipated total contract value is £960,000 over a four‑year term. The contract is scheduled to commence on 1 June 2026, with an initial two‑year period and options to extend for up to a further two years.

Establishing a new LTA will provide long‑term stability, support effective risk management and ensure the Authority continues to secure best value for both the Authority and its associated entities.

Decision

Khadija Saeed, Head of corporate finance, on behalf of the John Betts, Director of Finance and Commerce (s151 Officer) took a decision to approve the re-tender of the LCDL Property Insurance Excluding Building 3.2 & 3.3 policy placement contract via an Above Threshold Open tender process, in compliance with the Procurement Act 2023.

The contract will commence from the 1st June 2026, with an anticipated annual value of £240,000. The initial term will be for two years, with the option to extend for any number of defined periods up to a further two years.