The City self-funds loss exposures that are predictable, where it is not cost effective to purchase commercial insurance, and where losses do not threaten its financial stability.  However, there are potential issues that present significant exposure to the City's financial stability, are somewhat unpredictable, and lend themselves to being commercially insured. 

The lines of coverage which are commercially insured include: Property & Contents (including boiler & machinery, auto physical damage, flood damage and cyber liability), public agency general liability, employee dishonesty and tenant users liability (to protect the city and protect those renting our facilities).  With the assistance of its broker (Wells Fargo Insurance Services, USA), the City markets these coverages with an eye on value (broadest coverage for the most competitive premium).  

The City continues to work to control losses and limit exposure through the Risk Committee and working with departments to identify potential exposures.  The total premiums proposed for this renewal cycle show a year-to-year increase of 7% ($39,585) from the current fiscal year.  This increase may be tied to the City’s claims history, growth in the City’s pool of insured vehicles/equipment and the general insurance market which is seeing double-digit increases in property coverage rates this cycle due to the multiple natural disasters that occurred in the last 12 months across the United States. 

The total estimated premium depicted on the attached spreadsheet may be adjusted upward or downward, depending on variations in actual exposures throughout the course of the policy year.

COVERAGE CHANGES
The City has not sought any changes to coverages for the coming fiscal year.  We continue to have discussions regarding our coverage needs on a going-forward basis.  

1. The City Council may approve the item as recommended.
2. The City Council may reject the recommendation of staff.
3. The City Council may choose not to approve the purchase of insurance policies for 2018-2019, but direct the City Manager further.

I move to approve the purchase of various commercial insurance policies to protect the financial interests of the City in an amount not-to-exceed $608,638 for FY 2019 and authorize the Contracts and Risk Manager to execute the policy documents.