R2024-298 Resolution Authorizing Property and Liability Insurance Coverage for the City of Decatur, Illinois for the Policy Period October 1, 2024 to October 1, 2025

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Financial Management DATE: 9/16/2024 MEMO: TO: Honorable Mayor Moore Wolfe and City Council FROM: Tim Gleason,City Manager Ruby James, CFO&City Treasurer Brian Hastings,Risk Manager SUBJECT: Items 1 through 8 Risk Management Property,Liability Workers Compensation for the City with Policy Year Starting October 1,2024 through October 1,2025 SUMMARY RECOMMENDATION: City Administration recommends City Council approval of the attached resolutions authorizing insurance coverage for property and casualty, liability,cyber,and workers compensation for the period October, 1,2024 through October 1,2025. BACKGROUND: Property and liability insurance continues to increase in the industry. Two dozen major storms have occurred in the past two years and the insurance industry needs to make up for the losses incurred. Insurance companies are paying out$1.10 to every dollar collected in insurance. This is a large reason everyone is seeing insurance increase dramatically. A.J. Gallagher indicated that Property&General Liability rates are increasing roughly 5'/2%,Auto by 9%,and Excess/Umbrella by 7%. Workers Compensation and Cyber Liability rates are relatively flat with some savings with Directors&Officers(Public Officials in the municipal world). During this year's renewal,a reconciliation was performed between the City's vehicle listing and the insurance company's listing to correct any discrepancies. There was a 26%increase in valuations between what the insurance company was carrying on their inventory vs.what the City had listed due to updating of the fleet in the past three years. In addition,payroll increased 6%over last year's payroll estimates used in the 2023 renewal process,using actual increases and next year's estimates of salary increases for the 2024 renewal process. A.J. Gallagher reviewed the market and obtained the best pricing for the type of insurance the City is seeking. At times changing insurance providers can provide the lowest pricing,but if there are no significant changes in the coverage needed,then staying with the current providers can be an advantage in some years. Auto accident insurance is covered under property and liability insurance. Auto inland marine insurance covers vehicles when they are parked in the lot and not in use. The insurance industry draws a distinction between coverage for when vehicles are in use and not in use. Upon council approval,the City will bind coverage as recommended in this material. The material presented to Council will, if approved,provide suitable and appropriate risk management with not to exceed level of coverage. The City has an insurance broker and advisory arrangement with Arthur J. Gallagher Risk Management Services,through their Decatur office. Under this arrangement,Arthur J. Gallagher provides broker services including the shopping for insurance offerings and pricing, advisory services including evaluation and recommendation of coverage levels and insurance products, advisory services in all risk management matters,and loss mitigation services. This specific arrangement has been in place since 2014,and further includes a broker/advisor relationship with AJ Gallagher and its predecessors approaching 30+years. Existing Coverage—The City's expiring insurance program includes: Property insurance—coverage limit of$200,000,000 per occurrence with a$50,000 SIR or deductible, Auto physical damage insurance—coverage limit of$19.7 million with a$100,000 SIR or deductible.