CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
title
Approve the recommendation by Alliant Insurance Services to award Property, Cyber Liability, and Pollution Liability Insurance Coverage through the Alliant Property Insurance Program for an amount not to exceed $996,847.65 and for a one-year term
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Director of Finance
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In 2022, the City awarded Contract 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 June 30, 2026.
DISCUSSION:
Due to instability within the insurance sector, the City has experienced significant increases in property insurance premiums in recent years. However, after several years of increases, the City will see a reduction in the property insurance premium for a second consecutive year. The 2025-26 policy decreased by nearly 5% from the prior period; while the proposed 2026-27 policy decreases by over 10% from the current policy. A full year-over-year breakdown is provided in the table below.
|
|
2025-26 |
2026-27 |
Change |
|
Total Insurable Values (TIV) |
$736,785,924 |
$759,622,160 |
3.09% |
|
Earthquake TIV |
$736,785,924 |
$759,622,160 |
3.09% |
|
Earthquake Limit |
$50,000,000 |
$50,000,000 |
- |
|
Property Annual Cost |
$1,072,416.57 |
$953,900 |
-11.05% |
|
Cyber Liability Annual Cost |
$31,771.25 |
$34,925.08 |
9.92% |
|
Pollution Liability Annual Cost |
$7,781.04 |
$8,022.28 |
3.10% |
|
Total Account Rate ($/100) |
0.1509216 |
0.1312294 |
-13.04% |
|
Total Annual Cost |
$1,111,969.86 |
$996,847.65 |
-10.35% |
Staff recommends approving renewal of the APIP coverage for a one-year term, effective July 1, 2026, through June 30, 2027, 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 $1,223,165 in the 2026 budget for the APIP renewal based on recent annual increases. The award requested is within the amount budgeted for this expense in 2026.
|
Account Number |
Fund Description |
Total Budgeted Amount |
|
60101600-524203 |
Self-Insurance Fund |
$1,223,165 |