TO: Board of County Commissioners
THROUGH: John A. Titkanich, Jr., County Administrator
Kristin Daniels, Budget Director
FROM: Cynthia Stanton, Risk Manager
DATE: April 22, 2025
SUBJECT: Self Insurance Funds and Property & Casualty Insurance Program
_________________________________________________________________________________________
BACKGROUND
In preparation for the May 1, 2025, renewal, staff worked with Arthur J. Gallagher Risk Management Services, Inc. (AJG) to secure the most comprehensive, cost-efficient property and casualty insurance program for the County. The table below summarizes the lines of coverage, limits and renewal costs, followed by the variables impacting the 2025 renewal rates. There was a total overall premium increase of 8.22% for the Indian River County insurance renewal.
Renewal Summary
|
Policy Coverage |
Policy Limits |
Current Prem |
Renewal Prem |
Prem Increase Change % |
|
|
Property (Non-Utility) |
$75 Mil/$35Mil |
$2,105,164 |
$2,032,685 |
-$72,479 |
-3.44% |
|
Property (Utility) |
$60/$20/$15 Mil |
$963,319 |
$1,291,449 |
$328,130 |
34.06% |
|
Flood |
Multi |
$10,220 |
$12,074 |
$1,854 |
18.14% |
|
Equipment Breakdown |
$100 Mil |
$14,390 |
$15,995 |
$1,605 |
11.15% |
|
Terrorism |
$100 Mil |
$21,910 |
$18,000 |
-$3,910 |
-17.85% |
|
NCBR PD & Liability |
$10 Mil |
$38,700 |
$42,000 |
$3,300 |
8.53% |
|
Inland Marine |
$20Mil/$2.5 Mil |
$128,464 |
$138,707 |
$10,243 |
7.97% |
|
Crime |
$1 Mil |
$7,009.40 |
$7,009.40 |
0.00 |
0% |
|
Public Entity Excess Liability |
$2 Mil/$4Mil |
$241,950 |
$261,900 |
$19,950 |
8.25% |
|
Excess Workers Comp |
Statutory Max |
$359,259 |
$403,771 |
$44,512 |
s 12.39% |
|
D&B |
$1 Mil |
$50,160.64 |
$50,429.30 |
$268.66 |
.54% |
|
Hull/P&I |
$1 Mil |
$6,273 |
$8,623 |
$2,350 |
37.46% |
|
Statutory AD&D |
$75,000 |
$13,040 |
$13,040 |
0.00 |
0% |
|
AJG Brokers Fee |
|
$125,000 |
$125,000 |
0.00 |
0% |
|
Total |
|
$4,084,859.04 |
$4,420,682.70 |
$335,823.66 |
8.22% |
ANALYSIS
Since 2020, the commercial property insurance market has demonstrated persistent premium increases, specifically in the state of Florida. As we are all aware, Florida is experiencing an affordability crisis in the procurement of property insurance coverage. Fortunately, the insurance market is starting to soften in the commercial property arena, providing a much-needed reprieve from excessive insurance rates. The FY26 property renewal rate decreased by 17.37% over the expiring rate, allowing the County to negotiate an increase in named storm and flood coverage limits. The total FY26 renewal premium increased 8.22% over the expiring year.
A copy of the detailed Executive Summary prepared by AJG has been provided for your review. The major highlights of the FY26 renewal are as follows:
Property Program: This remains a layered program with multiple carriers. The renewal is based on a 10.89% increase in total insured value of $409.6 million to include new buildings (Traffic Building, Sheriff Building, restroom facilities at Fran Adams Park, Hosie Shuman Park, Kiwanis Park and Victor Hart Park) as well as the North Library expansion and specific locations in the open. The renewal premium is $2,032,685 which is an overall decrease of 3.44% from expiring and includes increased limits from $25 million to $35 million for named storms and flood events on the Non-Utilities Property program.
Utilities Property Program: This remains a standalone policy separate from the non-utility property program. This year’s renewal is based on a total insured value of $297.5 million; a 13.89% increase in values from last year. The total insured exposure increase is mainly driven by the appraisal values received in 2024. The renewal premium is $1,291,449 which is an overall increase of 34.06% resulting from increased insured values and increased flood limits from $10 million per occurrence to $15 million per occurrence.
Excess Workers Comp: The Workers Compensation market continues to be limited in Florida for entities with Police and/or Fire exposures, which are subject to presumption laws. Fortunately, the County has successfully maintained coverage with the same carrier for over 10 years. This year the County received two renewal options from the incumbent carrier:
1. $850,000 deductible with a premium of $403,771 resulting in a 12.39% increase; or
2. $1,000,000 deductible with a premium of $356,096 resulting in a -12% decrease.
Staff recommends option 1 - $850,000 deductible per claim, which is the same as the expiring policy. All terms and conditions remain the same.
BUDGETARY IMPACT
The County's property and casualty coverage is funded through the Self Insurance Fund (502). This is an Internal Service fund that is supported by charges to operational funds of the County. The current fiscal year’s portion of the proposed premium will be funded from account number 50224613-034590 (Self Insurance Fund - Other Insurance). The Self Insurance Fund is supported by all other departments and the premium costs are distributed across all County departments
A copy of Self Insurance Funds and Property & Casualty Insurance Program is available to view in the Board of County Commissioners' Office.
STAFF RECOMMENDATION
Recommended Action
Staff recommend that the Board approve the proposed renewal and authorize staff to bind coverage for May 1, 2025, through April 30, 2026, with a current annual premium of $4,420,682.70. The renewal premium is based upon the current schedule of values, coverage selections and includes the annual broker fee of $125,000.