Title
Purchase of Property and Casualty Insurance Policies for the City of Phoenix (Ordinance S-45741)
Description
Request to authorize the City Manager, or his designee, to purchase various property and casualty insurance policies on behalf of the City for July 2019 through June 2020. Further request authorization for the City Controller to disburse funds, not to exceed $8,286,036.
Report
Summary
Competitive quotes were sought from all viable commercial insurance markets to assure the best coverage and cost available. The total estimated cost for all insurance policies is $8,286,036, up from $7,307,075 in the current year. The increase of $978,961 is due to: 1) an increase in the value of property insured; 2) increasing Network Security and Cyber insurance limits; and 3) an increase in the Excess Liability premium. The Excess Liability increase is due, in part, to the City's first claim to exceed the Self Insurance Retention Fund (SIR) making it less desirable for insurance companies to provide insurance. Further, the insurance market is driving the City to increase the SIR from $7,500,000 to $10,000,000, which requires the City to pay up to the first $10,000,000 of each individual claim. The recommendation to increase the Network Security and Cyber Insurance is due to the recent security threats that have been experienced related to technology with other entities.
Funds for policies purchased specifically for the Aviation and Police departments are available from those departments. Citywide insurance policies are purchased from the Risk Management Self-Insurance Fund or the Workers' Compensation Self-Insurance Fund and are then allocated to each department. Funds are available for the payment of these insurance allocations in each department's budget.
Insurance Policy Type Department Estimated Cost
Blanket Property and Boiler and Citywide $4,044,921.00
Machinery Insurance
Excess Liability Insurance Citywide $2,820,000.00
(Multiple Layers)
Excess Workers' Compensation Citywide $305,000.00
Insurance
Network Security and Cyber Citywide $472,000.00
Police Aircraft Liability and Hull Police $119,000.00
Insurance
Aviation Airport Liability Aviation $475,000.00
Insurance
Miscellaneous Property and Casualty Citywide $50,115.00
Insurance
Financial Impact
The amount will not exceed $8,283,036, comprised of funds from the Risk Management Self-Insurance Fund and various departments.
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher and the Finance Department.