DEPARTMENT: Office Of Risk Management
FILE TYPE: Regular Action
TITLE
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Authorization To Renew Cyber Security Insurance With American International Group, Inc (AIG) Specialty Insurance Company
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PURPOSE/ACTION REQUESTED
Authorize the renewal and purchase of the county’s cyber security insurance contract with AIG Specialty Insurance Company.
SUMMARY
Dakota County has carried a cyber security insurance policy since October 2019. In the years since, public sector organizations have experienced a rise in cyber-attacks, including increasingly sophisticated ransomware and data breach incidents. These developments previously drove up insurance premiums and made coverage more difficult to secure.
Recently, however, market conditions have shifted. Greater capacity within the insurance industry and heightened competition have helped ease the market, resulting in stable or slightly reduced premiums-even as cyber threats continue to evolve. A recent market analysis shows that public sector entities renewing their policies in 2025 are commonly seeing rate reductions between 0% and 2.5%.
Over the past several months, staff from the Office of Risk Management and Information Technology have collaborated with Dakota County’s insurance broker, Gallagher Risk Partners, to market the County’s cyber security insurance coverage. This effort included completing detailed applications and conducting a formal solicitation process. Simultaneously, Information Technology staff have continued to strengthen Dakota County’s cyber security controls-an essential factor in enhancing Dakota County’s competitiveness in securing cyber insurance coverage.
The County's coverage was marketed on a limited basis since many cyber security insurers do not write policies for public sector entities. As the incumbent insurer, AIG offered a substantial premium reduction for a renewal which further narrowed the competitive pool. Only one other carrier, STARR Insurance, was able to offer a competitive quote that was contingent on a higher deductible level of $250,000. AIG offered the lowest quote/deductible level, is the long standing Cyber insure for the County and the industry recognized leader in the Cyber insurer sector.
AIG has stringent control standards and while they are not currently writing any new public sector clients, they recognize Dakota County as a good client and responded with a renewal quote that reflects a reduction in premium from $105,616 to $95,284 (9.78%). Consistent with the renewal in 2024, the deductible on the policy was maintained at $100,000. The aggregate limit of the policy remains the same as the expiring policy at $3,000,000.
The attachment provides a summary of the cyber insurance premium trends for the past five years.
RECOMMENDATION
recommendation
Staff recommends the Board authorize the Deputy County Manager to renew the cyber security insurance contract with AIG Specialty Insurance Company (AIG) for the policy period October 31, 2025, through October 31, 2026.
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EXPLANATION OF FISCAL/FTE IMPACTS
The insurance premium amount of $95,284 is included in the Office of Risk Management 2025 adopted general liability insurance budget.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, Dakota County purchases insurance to cover financial risks that can result in significant costs and are unpredictable in nature; and
WHEREAS, there has been a substantial increase in cyber security attacks on public sector entities over the last several years; and
WHEREAS, an evaluation of the cyber security marketplace for competitive pricing was completed; and
WHEREAS, based on the evaluation of the marketplace, staff is recommending the purchase of
cyber security liability insurance with a limit of liability of three million dollars with AIG Specialty Insurance Company.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby
authorizes the Deputy County Manager to purchase the following insurance to be paid at current rates from the Office of Risk Management insurance budget:
American International Group, Inc (AIG) Specialty Insurance Company
Cyber Security Insurance
October 31, 2025, through October 31, 2026
Premium not to exceed $95,284
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PREVIOUS BOARD ACTION
24-527; 10/29/24
ATTACHMENTS
Attachment: Cyber Insurance Renewal Summary
Attachment: Presentation Slides
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