Published : Monday, August 26, 2019 | 4:55 AM
Pasadena’s municipal liability insurance premiums are ballooning.
The Pasadena City Council is expected to approve Monday a recommendation to renew the City’s excess municipal liability insurance coverages from September 1 through July 1, 2020, with the total amount not to exceed $1,270,947 for all premiums, surcharges, taxes, and fees.
The prorated renewal premium for this ten-month period represents a 307 percent increase, compared to $414,172, for the expiring policies, an Agenda Report prepared by the City Attorney shows.
The recommendation will be deliberated on by the City Council’s Finance Committee earlier Monday before it is passed on to the full City Council for approval.
The report said the premium increase is brought about by significant increases in California municipal liability risk, particularly law enforcement liability claims that are escalating on a national basis.
Pasadena purchases excess municipal liability insurance to protect the City and its operating companies against catastrophic loss and to comply with various agreements. The City’s insurance broker, Arthur J. Gallagher and Company, assists the City and its various operating companies to access insurance markets and manage the cost and coverage of the insurance program.
The broker works with City staff to determine the City’s exposure, purchase an appropriate level of coverage, go to market on behalf of the City, and seek a broad range of coverage from highly rated carriers, according to City documents.
Premiums for all renewal policies will be paid to Gallagher, as the City’s insurance broker, which then distributes them to the various insurance carriers that supply the coverage.
To fund the prorated excess renewal premium of $1,270,947, the budget requires additional appropriations amounting to $959,436.
Monday’s discussion will also include a proposal to amend the fiscal year 2020 operating budget by that amount, Pasadena’s City Attorney said in the report.