Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the County Insurance topic
No spam. Unsubscribe anytime.
Rising liability and property premiums force county to raise self‑insured retention; HR reports $4.5M premium reduction
Summary
Human Resources risk staff told the Board of Supervisors that liability, workers’ compensation and property insurance costs have risen sharply in recent years and that the county acted to raise its self‑insured retention (SIR) to reduce next year’s premium. HR said the move trims the excess liability premium estimate by about $4.5 million.
Human Resources risk staff presented a detailed briefing on sharply rising insurance premiums and the county’s strategy to contain next year’s costs.
What HR reported - Premium trend: premiums for the county’s three major insurance programs (general liability, workers’ compensation and property) rose from roughly $6.2 million in FY 2019–20 to about $22.6 million in FY 2024–25, HR said. - Excess general liability exposure: the county’s estimated excess general liability (GL) premium at a $1 million self‑insured retention (SIR) was presented as about $18 million for fiscal 2025–26 (staff noted year‑to‑year market volatility). - Causes: staff cited several market forces that have pushed premiums up nationally and in California: large jury awards and “social inflation,” statutory changes that reopened time windows for historical claims (in some cases allowing older claims to be filed), and growth of litigation financing that enables plaintiffs to pursue claims earlier and more aggressively.
County action - To moderate next year’s cost, the county approved raising the self‑insured retention (SIR) from $1 million to $2 million per occurrence effective July 1, 2025. - HR reported that moving the SIR to $2 million reduces the excess GL premium estimate by about $4.5 million — roughly from $18 million to $13.5 million — for the coming year.
Why it matters: Risk‑management costs provide a structural pressure on the county budget. The county told supervisors the market for excess liability is “hard” — insurers are raising prices and reducing capacity — and that large, multi‑year settlements in other public agencies have affected the market for all members of the county’s excess pool.
Supervisor questions and staff response: Supervisors asked how Sonoma County’s experience compares to other PRISM members; HR said Sonoma County’s frequency and severity of claims were better than the average member but that the county nevertheless must live with industry‑wide increases. HR stressed this change is expected to be a price‑leveling step rather than a permanent new annual escalation.
Next steps: HR will continue to monitor the market, evaluate structural risk options and report back with any further premium management proposals. The change to SIR will be implemented for FY 2025–26 as presented.
