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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: June 3, 2026
To: Honorable Mayor and City Council Members
From: Andrea Russell, Director of Human Resources
Department: Human Resources
Subject: Annual Renewal of the City’s Risk Management Insurance Policies for FY 2026/27 (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Approve the annual renewal of the City’s excess general liability insurance, excess workers’ compensation insurance, crime insurance and cyber insurance; and
2. Authorize the City Manager or designee to execute all related documentation.
City Manager's Comments
The City Manager recommends approval of the annual renewal for the listed insurances.
Executive Summary
The City purchases insurance policies through Public Risk Innovation, Solutions, and Management (PRISM), a member-directed risk sharing pool of public agencies committed to providing risk coverage programs and risk management services, which drive member stability, efficiency, and best practices. Staff is recommending renewing insurance coverage for the specific policies noted below:
•Excess Workers’ Compensation Program
•General Liability 2 Program (GL2)
•Master Crime Program
•Cyber Liability Program
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Background
The City is one of the 70% of California cities that have pooled membership within PRISM. Members within a pooled insurance plan typically experience lower rate increases year-over-year as opposed to standalone coverage. PRISM seeks quotes from both domestic and international markets in order to fill the program insurance needs. When the final quote is selected, PRISM works with actuaries and underwriters to determine the premium allocation for each member based on their individual loss experience and exposure data.
The General Liability market continues to see the same factors that have created extreme hard market conditions - nuclear verdicts and settlements driven by (among other things):
•Legal system abuse
•Changes in the regulatory and legal environment
•Growing distrust of large corporations/government
•An increasing propensity to sue
•Courts/Juries favoring plaintiffs
•An extremely aggressive and organized plaintiffs’ bar
The dramatic increase in severity losses that the industry has experienced over the last decade has caused the hard market conditions we continue to face has similarly impacted PRISM’s GL programs as well. PRISM members have experienced the same sort of extreme large loss activity as others throughout the market, resulting in higher premiums in recent years. However, the ability to collectively retain more risk and the combined purchasing power of the group continues to produce a dramatically better result than what could be achieved through individual placements in the market. In what is a dramatically shrinking insurance market in terms of available capacity, just the fact that PRISM is able to purchase reinsurance, opens up additional markets that individual risks can’t access. As the liability environment that we operate within continues to re-set, PRISM remains the best solution for California public entities.
The Excess Workers’ Compensation (EWC) market has its own set of problematic issues to hurdle. While EWC is currently the more stable line of coverage, the aging workforce, medical inflation, presumptions such as cancer, heart and posttraumatic stress, and the pandemic have disrupted the WC environment.
While accident frequency in workers’ compensation has been steady, claim severity continues to trend upwards. This is especially true for catastrophic injury cases where the costs are rising dramatically and predicting future costs continues to be challenging.
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PRISM’s EWC Program size is an advantage. The size of the EWC Program creates stability and offers economies of scale that could not be realized without being in a large pool. Because of this, PRISM has been able to secure unique reinsurance agreements largely due to the Program’s premium volume.
Discussion
Excess Workers’ Compensation Program
The City purchases excess workers' compensation insurance to cover employees if they are injured on the job. Coverage includes reimbursement for payments above the City’s self-insured retention (SIR). This includes compensation for temporary disability benefits at statutory rates, medical benefits, and some allocated expenses.
The City’s current excess workers’ compensation coverage cost is $909,248 and has a $1 million self-insured retention (SIR) with a limit remaining at statutory coverage.
Statutory coverage provides payment for claims up to the amount required by law, without limits. The FY 2026/27 premium is decreasing by at least 10% ($818,000).
Excess General Liability Program
The City purchases excess general liability insurance to protect against catastrophic incidents such as: bodily injury, property damage, personal injury, public officials’ errors and omissions liability, automobile liability and employment practices liability.
The City’s current excess general liability insurance coverage cost is $2,300,085 and has a $5 million self-insured retention (“SIR”) with a limit of $25 million. The FY 2026/27 premium is increasing by up to 27% ($2,919,000) while Program premium projections assume increases of up to 40%.
Master Crime Program
The City purchases master crime insurance to protect against illegal acts committed by employees while on the job including theft, forgery, inside premises (theft of money and securities/robbery), computer fraud, money orders and counterfeit paper currency, and outside premises.
The City’s current master crime coverage cost is $13,190 and has a $2,500 self- insured retention (“SIR”) with a limit of $15 million. The FY 2026/27 premium is increasing by up to 21% ($15,900).
Cyber Liability Program
The City purchases cyber liability insurance for reimbursement coverage in response to information security and privacy liability, website media content liability, cyber extortion and first party data protection.
The City’s current policy cost is $21,512 and has a $100,000 SIR with a limit of $12 million. The FY 2026/27 premium is increasing by up to 85% ($39,800) while Program premium projections assume increases of up to 85%.
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The following chart summarizes the City’s current actual cost for insurance coverage, assuming no changes to coverage, deductibles and or retention.
Insurance Type
FY 25/26
Actual
Premium
FY 26/27
Maximum
Estimated
Cost
Maximum
Percentage
Change
Excess Workers’ Compensation $909,248 $818,000 -10%
Excess General Liability $2,300,085 $2,919,000 27%
Master Crime $13,190 $15,900 21%
Cyber Liability $21,512 $39,800 85%
Total Estimated Insurance
Premium Costs
$3,244,035 $3,792,700 16.9%
2021-2025 Strategic Targets and Goals
Approving the renewal of the City’s various insurance policies aligns with Strategic Target No. 1: Improved Operational and Financial Capacity, specifically, Goal e:
minimize risk and litigation exposure by maintaining sufficient coverage to provide protection to the City.
Fiscal Impact
The financial impact to the City would not exceed $3,792,700. The insurance premiums are budgeted and paid from both the Workers Compensation Fund and Liability Insurance Fund. The FY 2026/27 Proposed Budget has a total of $5,631,291 budgeted across both funds to cover these premiums.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1. Approve the annual renewal of the City’s excess general liability insurance, excess workers’ compensation insurance, crime insurance and cyber insurance; and
2. Authorize the City Manager or designee to execute all related documentation.
Attachments
Attachment 1 - Insurance Renewal PowerPoint
Attachment 2 - 2026/27 Budget Estimates
Ward:
All Wards
Synopsis of Previous Council Actions:
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July 2, 2025 The Mayor and City Council approved the annual renewal of the City’s Property insurance, excess general liability insurance, excess workers’ compensation insurance, crime insurance and cyber insurance.
CC : Eric Levitt, City Manager