McHenry County's Finance & Audit Committee voted to approve the county's recommended 2026 property and casualty insurance program after a lengthy debate over whether to drop the top $5 million excess layer to save approximately $191,000 a year.

The committee vote approved staff's recommendation to retain the full layered insurance program. The package presented by county staff and Gallagher, the county's broker, includes $6 million in primary coverage plus a $5 million excess layer for $11 million in core coverage; the program also offered an additional $5 million follow-form excess layer that would raise total available coverage to $16 million.

Supporters of keeping the higher limit argued the county's exposure to large tort claims and legal settlements remains uncertain and that the additional premium represented a modest hedge against catastrophic loss. "It's insurance. It's just in case," said Rich Stoklusko, the Gallagher broker-consultant who explained the structure and market trends, adding that the firm had moved the county's primary carrier to Metis/Obsidian and described a national increase in the cost of excess liability capacity.

Opponents framed the additional premium as a straightforward near-term savings opportunity. Board member Eric Hendricks said the county had not historically pierced higher layers and moved to remove the top $5 million policy to reduce recurring expense. "I would propose we amend eliminating that ... roughly $191,000 expense," Hendricks said during debate.

County staff and Gallagher warned that although historical claims had not required the top layer in McHenry County's memory, the county could not predict whether a year with a large wrongful-death, jail-related, or vehicle liability claim would emerge. Scott (county staff) told the committee the recommendation to maintain the top layer reflected caution given recent increases in jury awards and settlement amounts.

After the committee rejected an amendment to drop the $5 million layer, it voted on the resolution to approve the recommended insurance program. The motion passed with the following recorded votes: Yes — Larry, Brian, John, Carolyn and the chair; No — Terry, Eric. The committee also authorized staff to bind the program within the parameters described in the resolution packet.

The resolution approved by the committee authorizes staff to purchase the program summarized in the packet (exhibit A) and to use an appropriation authorization figure to provide flexibility for mid-year adjustments in payroll, property schedules and other changes that affect premium calculations. The packet included a not-to-exceed authorization figure of $1,830,000 for the county's property and casualty program; staff said that figure provides latitude for administrative adjustments, not a target to spend.

What the committee decided
- Action: Approved the County of McHenry 2026 property and casualty insurance program (resolution on the agenda as item 7-5).
- Motion: Motion to approve carried (mover: John; seconder: Larry).
- Vote record: Yes — Larry; Brian; John; Carolyn; Chair (recorded as the meeting chair). No — Terry; Eric.

Why it matters
Retaining the top excess layer maintains the county's higher liability protection in a period of rising liability settlements and a hard insurance market. The decision increases near-term insurance spending but reduces the county's financial exposure to a single large claim that could otherwise fall on the county's budget.

What remains unresolved
The committee rejected a specific amendment to remove the top $5 million follow-form excess layer; the packet includes the county's full exhibit of coverages and an authorization ceiling that staff may use throughout the policy year. Staff said they will bring back any material changes and that carrier and premium details will be finalized and bound consistent with exhibit A.

Speakers quoted (selected)
- Rich Stoklusko, broker-consultant, Gallagher: "It's insurance. It's just in case."
- Eric Hendricks, County Board member: "I would propose we amend eliminating that ... roughly $191,000 expense."

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