FROM: Robert Thompson, General Manager
Originator: Wally Ritchie, Director of Finance
SUBJECT:
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FY 2026-27 PROPERTY-LIABILITY INSURANCE RENEWALS
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GENERAL MANAGER'S RECOMMENDATION
recommendation
RECOMMENDATION: Recommend to the Board of Directors to:
Approve the Orange County Sanitation District FY 2026-27 Property-Liability Insurance Renewals included in the FY 2026-27 and FY 2027-28 Budget for the not-to-exceed amounts specified below:
Property and Boiler & Machinery - Not to Exceed
$2,870,413
Excess General Liability Insurance - Not to Exceed
$1,485,347
Excess Workers' Compensation Insurance - Not to Exceed
$ 518,000
Earthquake Insurance - Not to Exceed
$ 166,381
Cyber Liability
$ 159,829
TOTAL
$5,199,970
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BACKGROUND
Orange County Sanitation District's (OC San) Financial Management staff and OC San's operational insurance broker, Alliant, began the renewal process in January and received final quotes in June. After negotiating with the insurance carriers, Alliant was able to secure competitive rates for OC San without compromising the quality of coverage provided. The insurance market has been in a state of flux due to reduced reinsurer capacity, weather extremes, sea level rise, wildfires, catastrophic losses, social inflation, and cybersecurity threats around the world and in the state of California. There is a lot of uncertainty in the market and insurers have taken losses for previous years and, as a result, insurance costs will increase to absorb the losses.
The uncertainty in the market due to the above-mentioned factors will impact the insurance rates. As such, OC San will need to pay higher rates to obtain the same coverage limits. The current extreme degree of uncertainty in the insurance industry means significant rate increases, at least in the short term, until the numbers play out for the insurance industry over the next few years.
The proposed cost of insurance coverage for FY 2026-27 is $5,199...
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