TITLE
Recommendation to authorize City Manager, or designee, to purchase property insurance for City of Long Beach buildings, contents, and vehicles through the Alliant Insurance Services, Inc., Property Insurance Program (APIP), for a total premium not to exceed $8,516,406, and purchase of earthquake (difference in conditions coverage), at a premium of $198,300 with the Insurance Company of The West, for the period of July 1, 2023 to July 1, 2024. (Citywide)
DISCUSSION
The Human Resources Department requests City Council authorization to renew “all risk” property insurance and earthquake insurance coverage. The property market continues to harden with the market capacity being cut, there are fewer carriers willing to write the coverage and as a result premiums continue to increase. Carriers are being more conservative in deploying limits on any risk due to higher inflation and skyrocketing natural disaster losses. These combined effects are resulting in the hardest market cycle in a generation. Many of the catastrophic losses that were seen in 2017 through 2023 such as wildfires, hurricanes, hailstorms, and floods, continue to include higher than expected loss development. The Coronavirus pandemic has also added to the challenging market. The City of Long Beach’s (City) broker, Alliant Insurance Services, Inc. (Alliant), has approached the market with a comprehensive tactic seeking coverage in the current APIP program as well as outside of the program.
Property Insurance
Through its property insurance broker, Alliant, the City annually purchases “all risk” property insurance to cover perils such as fire, vandalism, and flood damage to City buildings, contents, and vehicles. This insurance provides coverage for all risks, subject to exclusions and limitations. The proposed property insurance policy provides replacement cost coverage with limits of up to $1 Billion, subject to a $1.5 million per occurrence deductible, and a limit of $10 million aggregate i...
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