DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Renew Commercial Property Insurance Contract with Affiliated FM Insurance
end
PURPOSE/ACTION REQUESTED
Authorize the Risk Manager to renew the commercial property insurance contract with Affiliated FM Insurance Company (Affiliated FM).
SUMMARY
While the County is self-insured for general liability exposures, it purchases several types of commercial insurance (property, crime, and auto) where it makes financial sense. The property insurance policy is up for renewal on July 1, 2025. The crime insurance policy was renewed on April 1, 2024, and is a three-year policy.
Affiliated FM is the County’s current property insurance carrier. Total property values increased from $610,727,404 to $647,695,047 since the last policy renewal. This increase reflects a 2.0 percent increase to all insured property values based on construction cost trends. Our property portfolio also had the additions of the Integrative Health Unit and the Crisis and Recovery Center in April 2025.
With respect to on-going efforts by the County to control our insurance premium costs, Risk and Facilities Management work collaboratively to address items identified during onsite inspections by engineers with Affiliated FM at county buildings. The recommendations were for improvements to areas identified as opportunities to reduce exposures and in turn recognize insurance premium savings. The County has not experienced a reportable property loss since December 2021. This loss was a windstorm damage claim which resulted in $68,003.19 in damages to the Farmington Highway Shop.
The quote from Affiliated FM (Attachment) for the property policy reflects a composite rate of $.072 per $100 of value, this remained flat from the 2024/2025 policy period. The total Affiliated FM premium for July 1, 2025, through July 1, 2026, is $464,278. The increase in premium is reflective of an increase in our overall property portfolio value.
Industry reports for commercial property/casualty premiums reflect continued increases. According to the Council of Insurance Agents and Brokers’ Commercial Property/Casualty Market Index Survey, pricing for commercial property/casualty lines continued to increase through the first quarter of 2025. These increases are largely the result of escalating natural disasters and continue to call for stricter underwriting practices limiting interest amongst other commercial property insurers.
The County’s insurance broker marketed the property portfolio to other commercial property insurers, however due to the volatility of the market we have not yet received any quotes from other insurance companies within the industry. Based on previous years quotes we are confident that Affiliated FM will have a cost-effective quote.
RECOMMENDATION
recommendation
Staff recommends the County Board authorize the Risk Manager to renew the commercial property insurance contract with Affiliated FM for the policy period July 1, 2025, through July 1, 2026, for the cost of $464,278.
end
EXPLANATION OF FISCAL/FTE IMPACTS
The required funds of $464,278 are included in the Office of Risk Management 2025 property insurance budget.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
body
WHEREAS, Dakota County purchases insurance for property losses; and
WHEREAS, the current policy on commercial property insurance will expire on July 1, 2025; and
WHEREAS, an evaluation of the marketplace for competitive pricing was completed; and
WHEREAS, based on the evaluation of the marketplace, staff is recommending renewal of the commercial property insurance coverage with Affiliated FM Insurance Company.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Risk Manager to purchase the following insurance to be paid at current rates from the Office of Risk Management insurance budget:
Property Insurance
Affiliated FM July 1, 2025, through July 1, 2026 Premium $464,278
end
PREVIOUS BOARD ACTION
24-295; 6/4/24
ATTACHMENTS
Attachment: Historical Insurance Rate Comparisons
BOARD GOALS
☐ Thriving People ☐ A Healthy Environment with Quality Natural Resources
☐ A Successful Place for Business and Jobs ☒ Excellence in Public Service
CONTACT
Department Head: Jenny Groskopf
Author: Sarah Fenske