CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
title
Approve the recommendation by Alliant Insurance to award Property, Cyber Liability, and Pollution Liability Insurance Coverage through the Alliant Property Insurance Program for an amount not to exceed $1,111,969 and for a one-year term
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Finance Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In 2022, the City awarded RFP 22-072, Insurance Brokerage and Professional Consulting Services, to Alliant Insurance Services, Inc. As the City’s insurance broker, Alliant works on behalf of the City to procure options on various insurance policies before providing a final recommendation to the City for approval.
As an Alliant client, the City has access to the Alliant Property Insurance Program (APIP), a comprehensive policy structured through a group purchase program providing coverage for the following:
1. All-risk, flood and earthquake insurance for the City’s buildings, infrastructure, and vehicles
2. Boiler and machinery insurance
3. Cyber liability insurance
4. Pollution liability insurance
APIP covers up to $1 billion under a layered and shared framework. This framework combines the services of more than 20 property insurance carriers to reduce costs while maintaining a sufficient level of protection.
As part of APIP, Alliant also provides the City with two additional policies for cyber liability and pollution liability as an underwritten component. Beazley Group (Lloyd’s) will serve as the cyber liability carrier and Ironshore Specialty Insurance Company will serve as a pollution liability carrier.
The City’s current property insurance and related policies will expire on July 1, 2025.
DISCUSSION:
After several consecutive years of increases in property insurance premiums, the 2025-2026 policy renewal is quoted at $1,111,969, a decrease of 4.97% from the prior year. A full year-over-year breakdown is provided in the table below.
|
|
2024-2025 |
2025-2026 |
Change |
|
Total Insurable Values (TIV) |
$721,833,726 |
$736,785,924 |
2.07% |
|
Earthquake TIV |
$721,833,726 |
$736,785,924 |
2.07% |
|
Earthquake Limit |
$50,000,000 |
$50,000,000 |
- |
|
Property Annual Cost |
$1,132,312 |
$1,072,417 |
-5.29% |
|
Cyber Liability Annual Cost |
$30,420 |
$31,771 |
4.44% |
|
Pollution Liability Annual Cost |
$7,389 |
$7,781 |
5.31% |
|
Total Account Rate ($/100) |
0.1621039 |
0.1509216 |
-6.90% |
|
Total Annual Cost |
$1,170,121 |
$1,111,969 |
-4.97% |
Staff recommends approving renewal of the APIP coverage for a one-year term effective July 1, 2025, through July 1, 2026, to avoid any lapse in coverage, which may expose the City to significant financial liability. The proposed policy terms and conditions remain consistent with the existing policy. Alliant reviewed any proposed changes with City staff and posed no significant concerns.
FISCAL IMPACT:
CIP: N/A
Premium payments for property insurance are expensed to the Premiums/Property Insurance account listed below. Staff included $1,287,133 in the 2025 budget for the APIP renewal based on recent annual increases. The requested award of $1,111,969 is $175,164 less than the amount budgeted.
|
Account Number |
Fund Description |
Total Budgeted Amount |
|
60101600-524203 |
Self-Insurance Fund |
$1,287,133 |