Title
[Contract] Authorizing City’s Insurance Broker to Renew the City’s Contracts for Insurance [Two-Thirds Vote Required]
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FileID
File ID: 2026-01354
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Location
Location: Citywide
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Recommendation
Recommendation: Pass a Motion by two-thirds vote: 1) waiving the 10-day publication requirement contained in City Code Section 4.04.020 and Council Rules of Procedure Chapter 7, Section E.2.d for all agreements greater than $1,000,000; and 2) authorizing the City Manager or designee to authorize Alliant Insurance Services, Inc., the City's insurance broker, to secure additional insurance policies for the Special Liability Insurance Program, Medical Malpractice Insurance, Deadly Weapon Crisis Response Insurance and estimated broker fee, for a revised amount not-to-exceed $26,374,712.31.
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Contact
Contact: Natalie Dempsey, Risk Manager, (916) 808-8587, ndempsey@cityofsacramento.org, Department of Human Resources
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Attachment A Fiscal Year 2026/27 Insurance Premiums
3-Attachment B Schedule of Insurance
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Description/Analysis
IssueDetail
Issue Detail: The City is exposed to a broad range of complex risks that have the potential to result in significant or catastrophic losses. The City utilizes professional insurance brokerage services to place a variety of commercial insurance policies to protect the City from these losses. The City currently contracts with Alliant Insurance Services Inc. (Alliant) to perform this function. Alliant provides the City of Sacramento with insurance broker services, including marketing and placing coverage, negotiating renewal terms, advising on coverage limits and program structure, coordinating policy documentation, and providing ongoing coverage-related support.
On June 23, 2026, Council passed a motion authorizing the renewal of the City’s contracts for insurance for Fiscal Year 2026-2027. This action included authorizing Alliant Insurance Services, Inc., the City’s broker, to secure annual insurance policies for Excess Liability, Excess Workers' Compensation, Property, Fine Arts, Aircraft, and other insurance including Crime, Pollution, Underground Storage Tank, and Airport Liability, for an estimated amount not-to-exceed $26,009,461.24.
Several additional insurance policies were still under review and consideration in June 2026, and the City has now received the quotes for the additional insurance policies for the Special Insurance Liability Program (SLIP), Medical Malpractice Insurance, and Deadly Weapon Crisis Response Insurance. These additional policies will safeguard the City’s financial stability against liability. The new total not-to-exceed amount, including Alliant’s broker fees, is $26,374,712.31. Alliant’s broker fee for Fiscal Year 2026/27 is estimated to be $200,000, representing an approximately 6.2% increase from the prior year’s fee of $188,337.50.
SLIP insurance is anticipated to cost $139,000 and provides special liability insurance to support the operation of the Sacramento Regional Driver Training Facility, a facility operated in cooperation with County of Sacramento, and special events liability coverage for City Council and community events. The cost of the special events coverage is shared 50% with Youth, Parks, and Community Enrichment so small community events do not need to acquire individual policies.
The Medical Malpractice coverage through PRISM’s Medical Malpractice Program is anticipated cost to cost $15,357, and the coverage will support City programs and operations such as the Co-Response Crisis Intervention Team (CCIT), Mobile Integrated Health Unit (MIH), and, most recently, the Physical Therapist position within the Fire Department.
The Deadly Weapon Crisis Response Program (ADWCRP) will provide dedicated protection in the event of a deadly weapon crisis. In addition, the coverage may function as a retention buy-down for the City’s liability program. This means the ADWCRP coverage may apply before the City’s primary liability coverage is triggered, reducing the City’s potential self-insured exposure under its liability retention. The anticipated cost for this program is $11,524.17.
Attachment A provides a summary of all FY 2026/27 insurance policies and premiums. Attachment B provides a comparison of insurance policies and premiums from Fiscal Years 2025/26 and 2026/27.
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PolicyConsiderations
Policy Considerations: Failure to secure adequate insurance coverage leaves the City financially vulnerable to catastrophic losses, potentially resulting in substantial and unbudgeted financial obligations.
The Sacramento City Code Section 4.04.020 and Council Rules of Procedure (Chapter 7, Section E.2.d) mandate that unless waived by a 2/3 vote of the City Council, all labor agreements, and all agreements greater than $1,000,000 shall be made available to the public at least ten (10) days prior to council action. This provision will be waived by City Council.
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations: This report concerns administrative activities that will not have a significant effect on the environment and does not constitute a “project” as defined by CEQA [CEQA guidelines Sections 15061(b)(3); 15378(b)(2)].
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: Excess liability insurance renewal continues to be extremely challenging for the City and public entities throughout California and the nation. The public entity liability insurance market continues to harden due to a combination of factors, including escalating claim frequency and severity, increasing plaintiff settlement demands, larger jury verdicts, nuclear and thermonuclear verdicts (those over $100M). For example, in 2024 there were a record 49 U.S. verdicts in excess of $100 million.
Another significant factor contributing to the current market conditions is “social inflation,” a term used to describe social and behavioral trends that expand the tort liability of parties alleged to be responsible for harms and their insurers. Social inflation is often associated with increasing jury awards, broader interpretations of liability, growing public distrust of institutions, aggressive litigation strategies, and a willingness by juries to award substantial damages. These trends have contributed to larger settlements and verdicts, increasing the overall cost of claims for insurers and public entities alike.
The City participates in the General Liability 2 (GL2) program through Public Risk Innovation, Solutions, and Management (PRISM), a member-directed risk-sharing pool that enables public entities to collectively purchase excess liability coverage and leverage greater buying power than would otherwise be available in the commercial insurance market.
By the City maintaining appropriate insurance coverage, the City safeguards its financial stability against severe liability, automobile, and Workers’ Compensation losses.
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FinancialConsiderations
Financial Considerations: Sufficient funds will be available in the Department of Human Resources FY 2026/27 operating budget for the Risk Management Fund (6502) and Workers’ Compensation Fund (6504) for coverages through June 30, 2027.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Alliant is a qualified LBE.
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