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STRATEGIC OUTCOMES |
ACTION |
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Department: |
☐ Safe & Prosperous |
☒ Motion |
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Finance |
☐ Active & Appealing |
☐ Resolution |
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☒ Respected & Responsible |
☐ Ordinance - Introduction |
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Division: |
☐ Connected & Engaged |
☐ Ordinance - Adoption |
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Procurement |
☐ Unique & Creative |
☐ Public Hearing |
TITLE:
title
Ratification: Renewal of City Insurance Coverage for Fiscal Year 2027
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SUMMARY RECOMMENDATION:
Summary Recommendation
Authorize binding of insurance coverage for Property, Public Liability (including Employee Benefits, Public Officials, Employment Practices, Liquor, Law Enforcement and Auto), Excess Liability, Crime/Dishonesty, Excess Workers Compensation, Cyber Liability, Automobile Damage, Drone, and Deadly Weapon and Crisis Response coverage for Fiscal Year (FY) 2027 for the total amount of $2,186,866.79 to: Alliant Insurance Services, Inc., of Phoenix, Arizona (City Attorney-RFB-23-110) (Richard W. Files/Robin Wilson)
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STRATEGIC OUTCOME:
This action supports the City Council strategic outcome of Respected and Responsible by obtaining required and proper insurance coverage for City assets.
REPORT:
To protect the City of Yuma and its taxpayers, the City purchases insurance coverage through policies of insurance every fiscal year. The City’s insurance broker, Alliant Insurance Services, Inc. (AIS), evaluates the City’s insurance needs and obtains quotes/proposals each year for the City of Yuma’s insurance coverage. For the last several years, the City Attorney’s Office has identified three overarching goals when obtaining insurance for the City: (1) no reduction in coverage limits; (2) no increase in the self-insurance retention (SIR) amount; and (3) a total Premium that is about equal to the prior year’s premiums. These goals are somewhat ambitious as every year private insurance carriers leave the marketplace, leaving less competition in a litigious climate, especially litigation against governmental entities.
Despite continued challenges in the public entity insurance market, the City's FY 2027 renewal achieved all three of the City's insurance objectives. The recommended program maintains existing coverage limits, does not increase any SIR, and reduces the overall premium by approximately 4.3 percent ($96,772.21) compared to FY 2026.
Based on the analysis and the City’s stated goals, AIS is providing a recommendation for the City’s insurance policies for FY 2027. All insurance companies recommended have A.M. Best’s rating of A (Excellent) or A+ or A++ (Superior) and a minimum of $50 million in Policyholders’ Surplus. A thorough insurance marketing effort for both property and liability coverage, including primary and excess/umbrella liability, was conducted during this renewal period. This process included all incumbent carriers on the FY 2026 placements. The objective was to canvas the marketplace, identify multiple coverage options, and generate potential savings for the City by line of coverage.
The recommended quote for Property Coverage, is Alliant Property Insurance Program (APIP), which includes: Boiler and Machinery, Inland Marine, Flood, Earthquake, Auto Physical Damage and Cyber coverage; Obsidian (Metis) for General Liability and MSIG Specialty (PRISM) for Excess Liability Coverage. The recommended Excess Workers’ Compensation carrier is Safety National, the recommended Crime coverage carrier is American International Group (AIG), the recommended Cyber liability coverage carrier is Beazley Insurance Company (through APIP), the recommended Drone coverage carrier is Global Aerospace, and the recommended Alliant Deadly Weapon and Crisis Response Program is offered through Underwriters at Lloyd’s of London.
All the coverage remains consistent with the FY 2026 policies of insurance.
SUMMARY OF COVERAGE:
Property Coverage: Property all-risk coverage includes City-owned real property, City-owned lease property, and real properties operated by the independent Housing Authority of the City of Yuma (HACY). For FY 2027, there are 149 insured properties, many of which consist of multiple units. Under this insuring agreement, the Property coverage deductible remains at $25,000. The insuring agreement also provides for flood and earthquake coverage, subject to a $100,000 deductible. Total Insured Values $714,167,213 (Building, Contents, Business Interruption and Rent Coverage, Public Art). Coverage also includes Boiler and Machinery and Inland Marine coverage.
City Equipment coverage includes all (non-auto) City Equipment valued over $15,000 with a $25,000 deductible. For insuring FY 2027, City Equipment Value limit is $12,063,652.
City Auto Physical Damage coverage includes all City Vehicles with a $25,000 deductible except a $50,000 deductible applies to all police vehicles valued under $250,000; $100,000 for All Vehicles with Replacement Cost Value (RCV) of $250,000 to $750,000; $250,000 for All Vehicles with RCV in Excess of $750,000 Per Occurrence for Off Premises Vehicle Physical Damage. On-Premises/In-Yard coverage is subject to the All Risk (Basic) deductible in the amount of $25,000 for insuring FY 2027, there are 596 covered vehicles for auto liability and City Auto Physical Damage Value limit is $40,176,369.
Liability and Excess Liability Coverage: Liability and Excess Liability Coverage totals $15 million with a $10 million base liability policy ($10 million aggregate) and a $5 million excess liability (umbrella) policy. Coverage examples include liquor liability, employee benefits, public entity management, employment practices, law enforcement liability and automobile liability.
For insuring FY 2027, the City’s SIR (deductible) for Liability coverage remains $300,000 per occurrence.
Cyber Coverage: The City’s Cyber Coverage for FY 2027 is a $2 million limit base policy with a reduced $50,000 retention. Coverage examples include third-party liability coverage, regulatory defense and credit card payment liabilities and costs, as well as first party coverage for data restoration expenses, cyber extortion loss and e-storage extortion, business interruption and Beazley Breach Response services.
Excess Workers’ Compensation Coverage: The City is self-funded through an SIR (deductible) for its statutorily mandated workers compensation insurance. Excess insurance will limit the City exposure to workers compensation claims above the SIR. The FY 2027 excess workers compensation coverage for presumptive losses for firefighters remains the same, with a City SIR of $2,000,000. The other workers’ compensation coverage also remains the same, with a City SIR of $700,000 for police and fire employees, and $600,000 for all other City employees.
Crime/Dishonesty: Crime insurance coverage provides for situations such as employee theft, depositor forgery and alteration, theft, disappearance and destruction (money, securities and other property), computer and funds transfer fraud coverage and credit, debit or charge card forgery. Crime coverage has policy limits of $1,000,000 with a $10,000 deductible. The policy also endorses coverage for Impersonation Fraud for a limit of $100,000 and a deductible of $25,000 and Toll Fraud Coverage for a limit of $100,000 and deductible of $5,000.
Drone: Drone insurance coverage provides coverage for incidents stemming from the use of unmanned aircraft. The liability limit is $2,000,000 with 10% retention. The FY 2027 policy also adds Hull Coverage, providing physical damage protection for the City’s drone fleet.
Deadly Weapon: Deadly Weapon and Crisis Response coverage provides $500,000 in coverage for qualifying violent incidents occurring at City-owned facilities. The policy carries no retention.
For reference, the table below summarizes the total premium costs.
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Type of Coverage |
Insurer |
Premium |
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Property, Liability, Excess Liability, Vehicle Auto Damage |
APIP (various); Obsidian; MSIG Specialty (PRISM) |
$1,675,336.57 |
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Cyber Liability |
Beazley (APIP) |
$46,440.00 |
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Excess Work Comp |
Safety National |
$434,289.00 |
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Crime and Dishonesty |
AIG |
5,944.00 |
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Drone |
Global Aerospace |
$18,058.00 |
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Deadly Weapon and Crisis Response |
Underwriters at Lloyd’s of London |
$6,199.22 |
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$2,186,266.79 |
The recommended insurance program reduces the City’s total annual premium by $96,772.21 (4.3%) from the FY 2026 coverages, while maintaining existing coverage limits and self-insured retentions. The reduction was achieved despite increased insured property values and continued pressure on the municipal insurance marketplace resulting from inflation, replacement costs, and significant public entity liability losses nationwide.
The City's existing insurance policies expired at midnight on June 30, 2026. To ensure uninterrupted insurance coverage, the City Administrator authorized binding of the recommended policies effective 12:01 a.m. on July 1, 2026. Approval of this item ratifies that action and confirms the insurance program for the policy period ending at midnight on June 30, 2027.
FISCAL REQUIREMENTS:
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CITY FUNDS: |
$ 2,186,266.79 |
BUDGETED: |
$ 2,250,330.00 |
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STATE FUNDS: |
$ 0.00 |
AVAILABLE TO TRANSFER: |
$ 0.00 |
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FEDERAL FUNDS: |
$ 0.00 |
IN CONTINGENCY: |
$ 0.00 |
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OTHER SOURCES: |
$ 0.00 |
FUNDING ACCOUNT/FUND #/CIP: |
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TOTAL |
$ 2,186,266.79 |
Insurance Reserve and Workers’ Compensation |
FISCAL IMPACT STATEMENT:
Sufficient budget capacity is provided in the City Council FY 2027 approved budget to renew this coverage.
ADDITIONAL INFORMATION:
SUPPORTING DOCUMENTS NOT ATTACHED TO THE CITY COUNCIL ACTION FORM THAT ARE ON FILE IN THE OFFICE OF THE CITY CLERK:
NONE
IF CITY COUNCIL ACTION INCLUDES A CONTRACT, LEASE OR AGREEMENT, WHO WILL BE RESPONSIBLE FOR ROUTING THE DOCUMENT FOR SIGNATURE AFTER CITY COUNCIL APPROVAL?
☒ Department
☐ City Clerk’s Office
☐ Document to be recorded
☐ Document to be codified
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Acting City Administrator: |
Date: |
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John D. Simonton |
7/7/2026 |
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Reviewed by City Attorney: |
Date: |
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Richard W. Files |
7/6/2026 |