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25-88345
CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: 2025-2026 Insurance Renewals
Motion authorizing the annual renewal of insurance policies for the City's property, excess liability, workers' compensation, cyber liability, and other miscellaneous coverages for 2025-26 fiscal year, in an amount not-to-exceed $9,206,520.00.
COUNCIL ACTION
Item Type: Consent Item
Approved for July 1, 2025 calendar
EXECUTIVE SUMMARY
Staff seeks Council approval for annual renewal of liability insurance policies for excess liability, property, workers’ compensation, cyber liability and other miscellaneous policies. {{section.number}}{{item.number}}2
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RECOMMENDATION
That the City Council authorize the renewal of the excess insurance policies for the City’s excess liability, property, Workers’ Compensation, cyber liability and other miscellaneous coverages for a total “not-to-exceed” amount of $9,206,520.00.
ANALYSIS
The City is self-insured for various losses, with self-insured retention amounts ranging from $10,000 to $2 million. The following is a brief description of the various lines of insurance coverages the City currently has and intends to renew:
Property
Property insurance covers loss, theft, or damage to City-owned property. An example of this type of loss includes damages caused by fire, wind, vandalism, etc. In order to secure the most advantageous rates for this insurance, the City purchases two separate policies.
The first policy covers property owned by Glendale Water & Power because of the nature of the property and equipment. The broker for this policy specializes in utility operations and can obtain a lower price for this insurance. The second policy provides coverage for all other City property.
Excess Liability
The excess liability policy provides coverage for damages for a loss as a result of an act, or failure to act, by a City of Glendale employee. Examples of this type of loss include automobile accidents, dangerous conditions of public property, police liability, employment claims etc.
This year we have been offered an Individual Member Corridor Deductible (IMCD). This is option is for members with good loss experience and offers a way to maintain a lower premium without increasing the overall Self-Insured Retention (SIR). While the SIR remains at $2M for each and every claim, the IMCD sits above the SIR, and erodes as claims are paid for the policy period. For claims that go above $2M, the City covers the cost of the claim until the $1M IMCD is spent. Once that $1M corridor is exhausted, PRISM resumes full payment for any claim above the City’s $2M SIR. In short, the corridor deductible is like a “buffer zone” the City takes on temporarily. Once that buffer is used up, the regular coverage rules go back into effect and PRISM picks up anything above the City’s $2 million SIR. Utilizing the IMCD will reduce the excess liability premium by approximately $1 million, making it an economical yet risk-justified approach for excess coverage.
Workers’ Compensation
This coverage pays costs for Workers’ Compensation claims that exceed the City’s SIR. {{section.number}}{{item.number}}3
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Fine Arts
The fine art insurance covers losses to artwork owned by the City, as well as the periodic art exhibitions held at the Brand Library and Art Center.
Aviation
Aviation coverage provides protection for the City's liability due to the Police Department’s Helicopter Operations.
Crime
This policy covers losses associated with employee theft, fraudulent activity, and other criminal acts.
Verdugo Crime Lab
This insurance covers losses from a claim in the event an error or omission is made by an employee working at the Verdugo Crime Lab.
Cyber Liability
The cyber liability policy is designed to cover the costs associated with a compromise of electronic data. Examples of this could include unauthorized access to sensitive data, information released as a result of human error or equipment malfunction, intentional theft of data, etc. Recoverable costs include the costs to retrieve lost or stolen data as well costs associated with assessments and training to prevent future losses.
The City’s insurance brokers have been working with PRISM and other carriers to secure the best rates for the City (a copy of the proposed rates is attached hereto). A majority of the policy rates have remained steady (Fine Arts, Aviation, Verdugo Crime Lab). The worker’s compensation coverage had a slight increase, but only due to an increase in payroll, not due to claims or other factors. Finally, as expected, the excess liability policy has the greatest increase, due in part to claims, but mostly due to market conditions. The premium amounts listed are “not to exceed amounts” and the final cost may be less than the maximum amount of $9,206,520.00. Funding for the insurance premiums is currently budgeted for in the Liability, Workers’ Compensation and Department budgets. Additional appropriation of funds is not necessary. GWP property insurance will be charged to GWP (Electric Works Revenue and Water Works Revenue Funds), Fine Arts insurance will be charged to Library (General Fund), and Verdugo Crime Lab will be charged to Police (General Fund) via a journal entry. Aviation insurance will be directly charged to Police and is budgeted for in the Joint Air Support Fund.
STAKEHOLDERS/OUTREACH
N/A
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FISCAL IMPACT
The insurance premiums will cost no more than $9,206,520.00, which was requested as a part of the FY 2025-26 budget, as outlined below. No new appropriation is being requested at this time.
Existing Appropriation
Amount Account String Funding Source
$63,363 46012-6020-GPD-7004-P0000 Joint Air Support Fund $735,238 45630-6140-HRD-5004-P0000 Workers’ Compensation Insurance Fund
$8,407,919 45630-6120-CAD-1004-P0000 Liability Fund
ENVIRONMENTAL REVIEW (CEQA/NEPA)
The action being considered does not constitute a “project” within the meaning of the CEQA Guidelines Section 15378(a) as it has no potential for resulting in either a direct physical change in the environment or a reasonable foreseeable indirect physical change in the environment. Even if it is a project, it is exempt pursuant to 14 C.C.R. § 15061(b)(3).
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
1. Choose not to authorize renewals, but in such event the City would be without insurance which is not recommended.
2. The Council can choose an alternative not identified by staff.
ADMINISTRATIVE ACTION
Submitted by:
Michael J. Garcia, City Attorney
Prepared by:
Ann Maurer, Chief Assistant City Attorney
Veronika Padron, Risk & Insurance Service Analyst
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1. Table of Coverages