In a recent emergency meeting, the Forest Park City Council addressed the urgent need for property casualty and loss insurance renewal, with a deadline set for Friday. Gallagher, the city's insurance broker, presented a comprehensive overview of the current insurance market, highlighting significant challenges due to rising costs and a difficult risk environment for governmental entities.

Matt Simmons, Senior Director at Gallagher, explained that the insurance market is experiencing unprecedented difficulties, driven by factors such as climate change and social inflation, which have led to increased liability and property costs. He noted that Georgia is currently the most challenging jurisdiction for governmental risk, resulting in a general trend of rising premiums across the board.

The council discussed transitioning to a protected self-insurance model, which would allow the city to manage its claims more proactively while purchasing excess liability coverage. This model is not new to the city, as it already employs self-insured strategies for employee benefits and workers' compensation.

Simmons provided a detailed analysis of the city’s loss experience over the past decade, revealing an average annual loss of approximately $619,000, primarily influenced by a spike in auto-related claims in 2020. He emphasized that while the city is currently in a favorable year, the historical loss data has impacted the insurance market's willingness to underwrite governmental risks.

The proposed insurance program includes a mix of coverage limits, with $1 million for auto liability and $5 million for general liability and law enforcement liability. The council was informed that the transition to a self-insured model could yield favorable financial results, with a projected 6.9% increase in fixed insurance costs, but an overall net reduction of 0.4% when factoring in exposure increases.

The urgency of the meeting stemmed from the necessity to ratify the insurance renewal before the impending deadline, ensuring the city remains protected against potential liabilities. The council's decision to adopt the agenda with this emergency addition reflects the critical nature of the discussions surrounding the city's insurance strategy and financial management.