Consideration and Approval of FY27 Liability Insurance Renewal Premiums
 

1. Arizona Municipal Risk Retentional Pool (AMRRP) for General Liability, Errors and Omission (E&O), Sexual Abuse and Molestation (SAM), Property, Auto, Marine, Crime, Cyber, Excess, and Workers’ Compensation coverage;
2. Aon Risk Insurance Services West (Aon) for Airport Liability;
3. Aon for International Travel;
4. Industrial Commission of Arizona (ICA) to fund the Firefighters Presumptive Cancer Claims;
5. New automobile insurance premiums; and 6) Flood Coverage.

Upon renewal, the new estimated insurance premiums will total $3,318,882. The request is for an amount not to exceed $3,500,000.

Breakdown of the individual costs by carrier are as follows:
1.a.     $1,538,042*    Liability coverage (AMRRP)
1.b.        $258,436*    Excess coverage (AMRRP)
1.c.       1,258,324     Workers’ Compensation coverage (AMRRP)
2.           $17,821*     Aviation (Aon)
3.             $2,500*     Foreign travel (Aon)
4.         $202,778*     Firefighters Presumptive Cancer Reimbursement Fund (ICA)
5.           $21,000*     New automobiles insurance premiums (AMRRP)
6.           $19,981      Flood coverage for buildings in a flood zone (Flood Nerd)
Total:  $3,318,882*
*Estimated

Staff recommends approval of the premium renewals offered by the current carriers.

The premium payments in the amount of $3,500,000 will be funded by the following accounts as authorized in the FY27 budget:

Vendor: Arizona Municipal Risk Retention Pool
Cost: $1,538,042.00, an increase of 16% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4253
Grant Funded: No
Funding Source: All funds

Vendor: Arizona Municipal Risk Retention Pool
Cost: $258,436.00, an increase of 20% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4253
Grant Funded: No
Funding Source: All funds

Vendor: Arizona Municipal Risk Retention Pool (Workers’ Compensation)
Cost: $1,258,324.00, an increase of 17% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4160
Grant Funded: No
Funding Source: All funds

Vendor: Aon Risk Insurance Services West
Cost: $17,281.00
Account Number Budgeted: 600-09-406-1520-1-4253
FY26 Budgeted Amount: $25,000.00, an increase of 5% from last year’s premium
Grant Funded: No
Funding Source: All funds

Vendor: Aon Risk Insurance Services West
Cost: $2,500.00
Account Number Budgeted: 600-09-406-1520-1-4253
FY26 Budgeted Amount: $2,500.00, a decrease of 0% from last year’s premium
Grant Funded: No
Funding Source: All funds

Vendor: Firefighters Presumptive Cancer Reimbursement Fund
Cost: $202,778.00, an increase of 6% from last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4290
Grant Funded: No
Funding Source: General Fund, Airport Fund, and Water Resource Infrastructure Protection Fund

Vendor: Arizona Municipal Risk Retention Pool
Cost: $21,000.00, an increase of 1% over last year’s premium
Account Number Budgeted: 600-09-406-1520-1-4253
Grant Funded: No
Funding Source: All funds

Vendor: Flood Nerd
Cost: $19,981.14, an increase of 573% over last year’s premium since only 1 of 8 buildings in a flood zone was covered last year
Account Number Budgeted: 600-09-406-1520-1-4253
Grant Funded: No
Funding Source: All funds

None.

Council has previously approved insurance coverage as outlined by the current carriers in prior fiscal years.

No alternative options are recommended at this time.

In 2020, the City of Flagstaff made the decision to explore the feasibility of being a self-insured/self-administered entity rather than being a member of an insurance pool. All primary lines of coverage were marketed, and it was determined that it was financially beneficial for the City of Flagstaff to become a member of AMRRP.

High Performing Governance – Maintain the organization’s fiscal stability through strong financial policies and best practices.

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