Title
Purchase of Property and Casualty Insurance Policies for the City of Phoenix (Ordinance S-46789)
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 2020 through June 2021. Further request authorization for the City Controller to disburse funds, not to exceed $12,438,000.
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 $12,438,000, up from $9,064,186 in the current year. The increase of $3,373,814 is due to: (1) a high demand for insurance coverage in the property and excess liability coverage and a reduced supply of capacity by the commercial insurance market throughout the country; (2) the City has experienced two large property losses over the last 10 years that exceed $36 million; (3) the City experienced its first loss that pierced the excess liability insurance; (4) claims are increasing in frequency and severity throughout the country; and (5) insurers are struggling to overcome underwriting losses.
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's budget. Funds for policies purchased specifically for the Aviation and Police departments are available from those departments.
Insurance Policy Type Department Estimated Cost
Blanket Property and Boiler and Citywide $5,630,000.00
Machinery Insurance
Excess Liability Insurance Citywide $5,110,000.00
(Multiple Layers)
Excess Workers' Compensation Citywide $326,000.00
Insurance
Network Security and Cyber Citywide $490,000.00
Police Aircraft Liability and Hull Police $145,000.00
Insurance
Aviation Airport Liability Aviation $597,000.00
Insurance
Miscellaneous Property and Casualty Citywide $140,000.00
Insurance
Financial Impact
The amount will not exceed $12,438,000, comprised of funds from the Risk Management Self-Insurance Fund, and are included in the Fiscal Year 2020-21 budget.
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher and the Finance Department.