AGENDA REPORT
Meeting Date: June 23, 2026
Item Number:
To: Honorable Mayor & City Council
From: Shelley Ovrom, Director of Human Resources
Sharon L’Heureux Dressel, Risk Manager
Subject: AUTHORIZE THE LITIGATION COMMITTEE TO MAKE INSURANCE PROCUREMENT RECOMMENDATIONS; AND
AUTHORIZE THE CITY MANAGER TO BIND INSURANCE COVERAGE
IN THE NOT-TO-EXCEED AMOUNT OF $15,900,000; AND
AUTHORIZE A PURCHASE ORDER TO ALLIANT INSURANCE
SERVICES FOR INSURANCE PREMIUMS AND BROKER FEES FOR
FISCAL YEAR 2026/27 IN T H E N O T -TO-EXCEED A M O U N T OF $15,900,000.
Attachment: None
RECOMMENDATION
Staff recommends the City Council authorize the Litigation Committee (Mayor Craig Corman and Councilmember Lester Friedman) to make insurance procurement recommendations for Fiscal Year 2026/27and authorize the City Manager to bind General Liability, Property, Earthquake, Excess Workers’ Compensation Financial Protection, and Medical Liability insurance, and approve the related purchase order to Alliant Insurance Services for payment of insurance premiums and annual broker fees in the total not-toexceed amount of $15,900,000.
INTRODUCTION
The Risk Management Division of Human Resources is responsible for identifying the City’s exposures and procuring and monitoring insurance coverage that will minimize financial loss to the City. The primary exposures include situations or conditions which Meeting Date: June 23, 2026
may allege liability for injury or damages suffered by another party (e.g., employment practices liability, law enforcement liability, vehicle collisions, dangerous conditions, trip and falls, sewer backups and water main breaks); damage or loss of property from fire, theft, flood or earthquake; and losses associated with employee injury, disability, or death.
DISCUSSION
The City consistently and without interruption purchases insurance for General Liability, Property, Earthquake, Workers’ Compensation, and additional supplemental coverage including, but not limited to, Financial Protections and Medical Malpractice. These policies are renewed annually with an effective date of July 1 and are procured through the City’s insurance broker Alliant Insurance Services.
In 2018, in preparation for presenting insurance renewal options to Council, Staff began the practice of meeting with the Litigation Committee to review marketing efforts, renewal options and recommendations. Continuing that practice, Staff met with the Committee on May 13, 2026, to discuss the state of the market and renewal strategy. Mayor Craig Corman, Councilmember Lester Friedman, Assistant City Manager Ryan Gohlich, City Attorney Larry Wiener, Finance Director Jeff Muir, Human Resources Director Shelley Ovrom, Risk Manager Sharon L'Heureux Dressel, and Conor Boughey, the City’s broker, attended.
The Committee discussed the recommended insurance budget, the existing terms of each line of coverage and the early pricing estimates for renewing all coverage lines at expiring, as presented below. Mayor Corman and Councilmember Friedman directed the City’s Risk Manager and Broker to proceed with renewing all lines at expiring limits and coverage terms, obtain increased limits for network protections to $10,000,000, and agreed to recommend the approval of FY2026/27 insurance coverage as presented with final premiums not to exceed $15,900,000.
Lines of Coverage Fiscal Year 2025/26 and Proposed Fiscal Year 2026/27 Line of Coverage Limits / Deducitble 2025-26
Rating Basis
2025-26
Cost
2026-27
Rating Basis
2026-27
Estimated
Cost
Bound
Exposure
Change
Bound
Cost
Change
Bound %
Change
Excess Liability $46.5M / $3M Ded Application $8,718,109 Application $9,200,000 N/A $481,891 6% Terrorism $50M / NIL Ded Application $34,068 Application $30,954 N/A ($3,114) -9% Property, Boiler &
Machinery
$1.25BIL / $25K Ded $1,211,930,379 $1,257,520 $1,240,038,395 $1,117,486 2% ($140,034) -11% Difference in
Conditions
EQ - $250M Limit / 5% Ded &
Flood $10M Limit / $100K Ded
$1,058,376,641 $4,190,302 $1,098,102,932 $3,355,945 4% ($834,356) -20% Excess Workers'
Compensation
WC - Statutory Limits
SIR $5M for 7706/7720
SIR $1M All Other &
EL $1M Limit / SIR $1M
$124,069,703 $260,695 $131,167,069 $275,608 6% $14,913 6% Med Mal (Fire) Primary $2M / $4M AGG / $5K
Ded & Excess $1M / $1M AGG /
XS Primary $2M
Application $18,404 Application $22,000 N/A $3,596 20%
Financial Protections Crime $5M Limit / $25K Ded &
BBR + Boost + Limit: $10M
Application $85,692 Application $206,238 N/A $120,546 141% Brokerage Fee Commissions are rebated in
exchange for a Brokerage Fee
Contract $165,000 Contract $169,950 N/A $4,950 3%
Total (including estimated subtotal) $14,729,789 $14,378,181 ($351,608) -2% City of Beverly Hills
2026-2027 Estimated Budget
As of: 6/8/26
Meeting Date: June 23, 2026
The City’s insurance broker, Conor Boughey, presented the marketing results, options, and recommendations for Fiscal Year 2026/27 to the Committee.
Excess General Liability
While market conditions have stabilized somewhat compared to the historic hardening experienced in recent years, underwriting remains highly disciplined. Many carriers continue to limit their participation on California public entity programs, provide reduced line sizes, and apply increased scrutiny to loss history, law enforcement exposures, and risk management practices. Capacity remains constrained, particularly for larger limits and accounts with adverse loss experience.
The excess liability market remains firm, and municipalities should continue to expect upward rate pressure. Favorable loss development and demonstrated risk management remain key factors in achieving the most competitive renewal outcomes.
The City’s renewal outlook for FY 2026/27 is favorable, and the City will fare better than many similar agencies in terms of pricing changes. The City’s position in the market results from having already realized the costs of its large losses and gaining the favor of underwriters who are pleased with the City’s efforts to reduce and mitigate losses.
The City currently purchases liability limits of $46,500,000 inclusive of a $3,000,000 selfinsured retention (SIR) with no change in aggregate structure from the prior term. These limits represent the maximum available from domestic carriers, and the utilization of international markets like Lloyds of London. The coverages provided within these policies are Public Officials Error and Omissions, Sexual Misconduct, General Liability, Auto Liability, Employment Liability and Law Enforcement Legal Liability.
For the July 1, 2026, renewal, the Litigation Committee provided direction to continue to obtain lead layer coverage through Safety National at $3 million SIR with excess layers offering the same terms and conditions as expiring coverage. The City purchases a separate Terrorism Insurance policy with broader coverage and lower premium than TRIA (Terrorism Risk Insurance Act) coverage offered by incumbent markets. This structure will provide improved coverage and premium savings. Final quotes for the top layers of the City’s liability tower are pending, with a not-to-exceed total premium of $9,200,000 (a 6% increase year-over-year).
Named Insureds for this policy include:
• City of Beverly Hills
• Beverly Hills Community Charitable Foundation
• The Parking Authority of the City of Beverly Hills
• Beverly Hills Public Financing Authority
Comparison 2025/26 2026/27
Annual Premium $8,718,109 $9,200,00 NTE
Property Insurance
The City obtains its all-risk property insurance coverage through Alliant Property Insurance Program (APIP), a group purchase no risk sharing program consisting of more than 200 California municipalities. All-Risk coverage protects property (real property, fine art, trees, personal property including City vehicles) against all-risks of physical damage or loss. It also includes coverage for related or resulting matters such as business interruption, Meeting Date: June 23, 2026
debris removal, errors and omissions, money and securities, and boilers and machinery. Allrisk property coverage specifically excludes property damage resulting from an earthquake or flood, which is covered under the difference in conditions coverage.
The property insurance market for California public entities remains challenging but has shown signs of stabilization heading into this year’s renewal. Following the significant disruption caused by the 2025 Los Angeles-area wildfires and continued catastrophe losses nationwide, insurers remain focused on wildfire exposure, catastrophe modeling, and portfolio aggregation throughout California. However, compared to the prior fiscal year, additional capacity has entered portions of the marketplace, resulting in increased competition for well-managed risks with favorable loss experience.
The City currently carries limits of $1,250,000,000, covering all locations up to the policy limit with a $25,000 deductible based on Total Insured Value (TIV) of $1.191 Billion. At renewal, APIP may increase the City’s All-Risk property limit, for no additional premium above quoted to $1,500,000,000 for FY2026/27.
For this year’s renewal, the City reported updated Total Insured Values (TIV) of $1,211,930,379, which is a 1.68% increase year over year. The Premium is based on the TIV and the Account Rate, which is $0.103 per $100 of reported values (rate decreased
7.5%). These results show a softening in the property market compared to prior terms.
Coverage terms largely remain the same. The chart below shows costs for coverage compared to expiring.
City of Beverly Hills 2025-2026 2026-2027 Variance
Total Insurable Values (TIV)*: $ 1,211,930,379 $1,240,038,395 2.31% Property Premium: $1,203,569 $1,059,062 -12%
Cyber Liability Premium: $41,194 $45,373 10.14%
Pollution Liability Premium: $12,755 $13,050 2.31%
Total Account Rate ($/100): 0.1037617 0.0901 -13.15%
Total Annual Cost: $1,257,520 $1,117,485 -11.13%
The Litigation Committee provided direction to maintain the current $25,000 deductible and policy limits of $1,250,000,000. This direction will result in an expected not-to-exceed cost for Property Insurance of $1,117,485.
Named Insureds for the All-Risk Property policy include:
• City of Beverly Hills
• Beverly Hills Community Charitable Foundation
• The Parking Authority of the City of Beverly Hills
• Beverly Hills Public Financing Authority
Difference in Conditions – Earthquake (Includes $10 Million for Flood) The City currently purchases Earthquake limits of $250,000,000 with a 5% per unit/property deductible (minimum of $100,000/property) and a $5,000,000 maximum deductible per occurrence. This coverage also includes a $10,000,000 limit for Flood. The TIV for earthquake does not match the TIV for property insurance because the values for autos, fine art, and trees, which are covered under All-Risk policy, were removed.
The Difference in Conditions (DIC)/Earthquake market for California public entities remains stable, with ample capacity and carrier competition. Underwriters continue to closely evaluate seismic modeling, construction characteristics, and concentration of values, particularly for Meeting Date: June 23, 2026
municipalities located in Southern California. While pricing remains stable for accounts with favorable loss experience and updated valuations, insurers continue to maintain underwriting discipline given the significant earthquake exposure throughout the state. Overall, the earthquake market remains more competitive and predictable than the broader property market, with sufficient capacity available to meet the needs of most public entity insureds.
The City reviews seismic modeling reports to evaluate the City’s likelihood and predict severity of losses related to earthquakes. Catastrophic incident modeling or a “Probable Maximum Loss” (PML) study is an insurance industry tool used for determining earthquake and hurricane exposures. The modeling takes into consideration the property location, value, construction type, fault lines, soil condition and other factors that help evaluate the susceptibility to loss for the City’s owned properties. Modeling conducted using the City’s values support a recommendation to continue to purchase limits of at least $200,000,000.
Last year the Litigation Committee discussed the modeling information, concerns about uninsured catastrophic loss and the costs to purchase additional limits and provided direction to obtain additional limits within the city’s budget. This resulted in a $250,000,000 limit, whereas expiring was $200,000,000. The final 2026/27 premium includes these same limits as well as the increased total insured values of $1,098,102,932 which includes trending and City reported updates for property values. The quoted year-over-year premium for $250,000,000 resulted in a 19% reduction.
Named Insureds for this policy includes:
• City of Beverly Hills
• Beverly Hills Community Charitable Foundation
• The Parking Authority of the City of Beverly Hills
• Beverly Hills Public Financing Authority
Excess Workers’ Compensation
For the period July 1, 2003 - June 30, 2018, the city retained, without the benefit of any excess coverage, 100% of its workers’ compensation exposure. The City began purchasing excess workers’ compensation insurance from Safety National on July 1, 2018.
The city continues to obtain per occurrence statutory limits for State-mandated coverage and through Safety National with a $1,000,000 (non-safety) and a $5,000,000 (safety) self- insured retention*. The city’s workers compensation coverage includes two types of coverage for workers compensation which includes state-mandated medical care and costs, lost wages, disability benefits, ongoing care and legal fees for work-related injuries and employers’ liability ($1,000,000/occurrence). Employers’ Liability protects the employer against instances in which an employee’s injury or disease is not subject to the workers’ compensation laws which make workers’ compensation an employee’s sole remedy. As in prior years, renewing coverage includes a negotiated reduction in minimum premium, which will allow the City to receive a rebate up to 10% of paid premium if the City experiences a reduction in payroll during the policy year. Workers Compensation is rated by City Payroll, which was up 4% this year. The premium is quoted with an increase of 7% due to a small rate increase of 3%.
The Litigation Committee provided direction to maintain coverage per the expiring terms and recommends binding coverage at the quoted amount of $275,608.
Program Year SIR Non-Safety SIR Safety Premium
2024/25 $1,000,000 $5,000,000 $244,687
2025/26 $1,000,000 $5,000,000 $260,695
2026/27 $1,000,000 $5,000,000 $275,608
* $1,000,000 self-insured retention is the minimum available from an excess carrier.
Meeting Date: June 23, 2026
Medical Malpractice (Nurse Practitioner Program Exposures) The City’s current excess general liability coverage is limited to incidental medical malpractice related to emergency services and excludes coverage for nurse practitioners (NP) and the scope of the NP program. While each NP is required to carrier their own coverage ($1M per occurrence/$3M aggregate) and name the city as an additional insured, the City is without coverage if sued for the professional acts of NP under the supervision of the Beverly Hills Fire Department.
The city began to purchase medical malpractice coverage in FY2021/22 with limits of $2,000,000 (with a $5,000 deductible) and increased limits in FY2022/23 to a $5,000,000 limit (with $5,000 deductible) above all NP in the program. Specifically, this option covers the professional liability exposure to the City arising out of the acts of the nurse practitioners, excess of any insurance they obtain. This program has six nurse practitioners and their professional acts under the supervision of the Beverly Hills Fire Department would be addressed by this placement. The existing coverage terms are provided by two $2.5 million dollar layers of insurance. For 2026/27the renewal premium is still being negotiated and should not exceed $22,000 which is a great result as the NP utilization continues to expand.
Comparison 2025/26 2026/27
Annual Premium $21,270 $22,000 NTE
The Litigation Committee provided direction to renew coverage at expiring as quoted. This direction will result in an expected not-to-exceed cost for Medical Malpractice insurance of $22,000.
Named Insureds for this policy include:
• City of Beverly Hills
Financial Protections
The City’s Financial Protections coverage includes municipal crime and network protection coverage. Municipal crime coverage is provided through the Alliant Crime Insurance Program (ACIP) which is a group purchase program insured by Lexington. As with the city’s All-Risk insurance program, this is a group purchase program with no risk sharing and no possibility of assessment. Coverage includes fraudulent instruction, employee theft, and vendor theft, loss of third-party property, impersonation fraud, and faithful performance of duty.
The ACIP (municipal crime) renewal premium for Fiscal Year 2026/2027 is $22,002. The total limit remains $5,000,000 with a $25,000 deductible per claim. Last year, the Committee provided direction to increase the fraudulent impersonation sublimit under ACIP from $250,000 to $500,000 and otherwise bind coverage at expiring and as quoted. The Committee recommended the city continue purchasing this option and renew all coverage at expiring for FY2026/27.
The Financial Protections line item on the Summary of Renewal Pricing also includes network coverage, which is renewing with a small rate reduction in line with market trends. Last year this placement greatly reduced in premium due to marketing and the City’s resiliency efforts.
The Committee directed the Risk Manager and Broker to maintain current Financial Protections coverage and increase network protection limits to $10,000,000. This adjustment costs $162,234, bringing the total FY2026/27 Financial Protections premium to $206,238.
Meeting Date: June 23, 2026
Financial Protection
Comparison
2024/25 2025/26 2026/27
Annual Premium $75,296 $85,692 $206,238
Named Insureds for these policies include:
• City of Beverly Hills (existing)
• Beverly Hills Community Charitable Foundation
• The Parking Authority of the City of Beverly Hills
• Beverly Hills Public Financing Authority
Broker Fees
Alliant Insurance Services does not receive commission fees on the lines of coverage procured for its public entity clients. In alignment with the existing agreement, the Brokerage Fee for FY2026/27 will increase by 3% to $169,950. This represents the first increase to the base fee of $165,000 since 2019.
Conclusion
Understanding the complexity and timing constraints associated with renewing the City’s policies (July 1, 2026 is the effective date of the insurance renewals and the insurance must be bound not later than June 30, 2026), the Committee recommended that staff provide Council with an overview of the insurance marketing strategy and program recommendations in order for Council to authorize the Committee to review and approve staff recommendations and provide City Manager authority to bind insurance coverage for Fiscal Year 2026/2027.
FISCAL IMPACT
The City’s Fiscal Year 2026/27 Proposed Operating Budget includes insurance premiums not to exceed $15,900,000 ($15,570,000, General Liability Fund and $330,000 Workers' Compensation Fund, respectively). If the budget is approved by City Council on June 23, 2026, this amount will be available to pay insurance premiums.
Shelley Ovrom,
Director of Human Resources
Approved By