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Cypress to increase general liability self‑insured retention to $300,000 to reduce premiums
Summary
The council approved raising the city's general liability self‑insured retention (SIR) from $150,000 to $300,000 effective July 1 to reduce projected premiums; staff estimated near‑term savings and presented a 10‑year claim analysis.
The Cypress City Council on April 28 voted to raise the city’s general liability self‑insured retention (SIR) from $150,000 to $300,000 effective July 1, 2025.
City staff explained that Cypress has been a member of the California Insurance Pool Authority (CIPA) since 1978 and that the current SIR level was set in 1986 and has not changed. Staff reported the city’s SIR is the lowest among CIPA members and that many peer agencies have higher SIRs; Yorba Linda is another grandfathered member at $250,000 and Irvine recently approved $500,000.
Staff presented a 10‑year loss history analysis and CIPA premium estimates. The finance department and city clerk said increasing the SIR could reduce next fiscal year’s premium estimate from roughly $657,000 to $485,000 — about $170,000–$200,000 in savings — while the city’s 10‑year losses suggested only three claims would have exceeded a $300,000 SIR, with an estimated additional liability of approximately $186,000 across that period.
City staff cautioned past losses do not guarantee future results but recommended the increase based on the combination of historical loss experience and projected premiums. Council members discussed risk and fiscal prudence, and then moved, seconded and approved the staff recommendation unanimously.
Ending: The change takes effect July 1, 2025; staff said any future large claims will be paid within the new SIR and that premium savings could be used to offset potential increased retained exposure.
