CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the recommendation by Alliant Insurance Services to award Excess Liability Insurance Coverage through the Alliant National Municipal Liability Program for an amount not to exceed $431,083 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.
The City maintains a self-insurance policy of up to $2 million against costs associated with bodily injuries, property damage, public officials’ errors and omissions, employment practices liability, and personal injury. Excess liability coverage provides additional protection against the same claims beyond the City’s self-insured limits. As an Alliant client, the City has access to the Alliant National Municipal Liability (ANML) program, a comprehensive policy structured through a group purchase program providing coverage for claims.
The City’s current excess liability insurance policy expires July 1, 2025.
DISCUSSION:
The City currently maintains $10 million in excess liability coverage through the ANML program, which is underwritten by Great American Insurance Company and Starstone Specialty Insurance Company. Alliant quoted the renewal of this coverage at $332,719, an increase of 12.4%. The increase is attributable, in part, to a significant change in the City’s claims history resulting from the Amor case.
The $10 million excess limit had not been reviewed in several years. For the 2025-2026 renewal, staff asked Alliant to evaluate the cost of additional coverage given the landscape of ever-increasing awards for the types of claims covered under this policy, particularly in the state of Illinois.
Alliant secured a quote for an additional $5 million in excess liability coverage through Arch Insurance. This provides the City with a total of $15 million in excess liability coverage beyond our $2 million self-insured retention (SIR). A full year-over-year breakdown is provided in the table below.
|
|
2024-2025 |
2025-2026 |
Change |
|
ANML Program - $10M Excess of SIR |
$296,152 |
$332,719 |
12.4% |
|
Arch Insurance - $5M Excess |
N/A |
$98,364 |
- |
|
Total Annual Cost |
$296,152 |
$431,083 |
45.6% |
Staff recommends approving renewal of the ANML coverage, with the additional $5 million excess 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
Excess liability insurance coverage is expensed to the Premium/General Liability account listed below. Staff included $325,766 in the 2025 budget for excess liability coverage renewal. The requested award of $431,083 exceeds that amount by $134,931. That additional amount can be accommodated by the property insurance premium being $175,164 under budget.
|
Account Number |
Fund Description |
Total Budget Amount |
|
60101600-524201 |
Self-Insurance Fund |
$331,800 |