That the City Council authorize the City Manager to renew the City’s excess Workers’ Compensation reinsurance policy with Midwest Employers Casualty Company and a Self-Insured Retention (SIR), or deductible, of $1 million per claim for all employees at an annual premium cost of $181,814 for the period of March 20, 2026, through March 20, 2027.

The City’s current excess Workers’ Compensation policy will expire on March 20, 2026.  In an effort to secure the lowest cost renewal option, staff directed the City’s broker, Schrimmer Insurance, to solicit bids from reinsurers. Current market conditions across the nation have made it challenging to find insurance carriers who are willing to quote workers’ compensation policies for cities, especially due to the risk of exposure from public safety operations. For this reason, Schrimmer Insurance was only able to secure one proposal from the City's current carrier, Midwest Employers Casualty Company. Representatives from Schrimmer indicated that the cost of insuring police personnel continues to be a significant factor in obtaining competitive quotes.
                                                                                                                                         
Midwest Employers Casualty Company has an excellent rating and financial strength and its proposal includes a $1 million Self Insurance Retention (SIR), or deductible, for all employees (including police), and no policy limit at an annual premium of $181,814.  This proposal represents a premium increase of 1%, or $1,803 compared to the City’s current annual premium of $180,011.

Staff recommends renewing the City’s excess Workers’ Compensation reinsurance with Midwest Employers Casualty Company.  This will provide coverage for all City employees with a $1 million SIR and an annual premium of $181,814 with no cap on the policy limits. 

The City’s excess Workers’ Compensation insurance premium history for the last ten years is listed below:

2016-2017	$120,876
2017-2018	$122,888
2018-2019	$115,363
2019-2020	$106,080
2020-2021	$109,896
2021-2022	$187,988
2022-2023	$212,282
2023-2024	$230,050
2024-2025	$230,709
2025-2026	$180,011
2026-2027	$181,814

Sufficient funds for workers’ compensation insurance premiums have been included in the adopted Fiscal Year 2025-2026 risk management budget. Staff recommends acceptance of the pricing proposed by Midwest Employers Casualty Company with a $1 million SIR at an annual premium cost of $181,814.

This recommended action achieves the following goal of the La Habra General Plan: 
General Plan Goal LU 17.1 Adequate Community Supporting Uses.

This recommended action achieves the following element of the City of La Habra's FY 2025/2026 Goals and Objectives: Goal 2-Management of Public Revenues and Fiscal Assets/Objective A