DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Renew Commercial Property Insurance Contract With Affiliated FM
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PURPOSE/ACTION REQUESTED
Authorize the Director of Risk and Emergency Management to renew the commercial property insurance contract with Affiliated FM.
SUMMARY
While the County is self-insured for general liability exposures, it purchases several types of commercial insurance (property, crime, and auto) when it makes financial sense. The property insurance policy is up for renewal on July 1, 2026.
Affiliated FM is the County’s current property insurance carrier and has insured County properties since 2007. Total property values increased by 4.2 percent in 2026 to $674,975,576. This increase was related to the completion of the Lebanon Hills Maintenance Facility.
Risk works collaboratively with Affiliated FM to manage property insurance premium costs. Our property insurance premium includes access to Affiliated FM’s engineering service who conduct regular building inspections to identify loss exposures and to review new capital projects for loss control recommendations prior to construction beginning.
Industry trends indicate a 5.5 percent decrease in commercial property premiums in 2026-the first reduction since 2017. Affiliated FM’s property insurance quote reflects a composite rate of $.064 per $100 of value, an 11 percent reduction from the 2025-2026 policy period. The total premium for July 1, 2026, through July 1, 2027, is $429,516. This premium quote is also based on a change in our deductible from $25,000 to $100,000. Our loss history supports this increase as we have not had an insurable loss exceed our $25,000 deductible since 2021. The annual premium savings and the County’s ten year loss history combined support a shift to the higher deductible.
Risk Management received one competitive quote in addition to the Affiliated FM renewal. GovPro Insurance, a new property program offered by Gallagher Public Sector, provides specialized coverage for public entities but includes more complex coverage layers and does not offer as comprehensive of engineering services.
GovPro’s quote of $417,933 reflects potential savings of $11,583, but due to the program’s newness, uncertainties, and lack of engineering support, Affiliated FM remains the most cost-effective and reliable option. Risk Management will continue to monitor GovPro’s development over the coming year to determine if a future transition is advisable.
RECOMMENDATION
recommendation
Staff recommends the County Board authorize the Director of Risk and Emergency Management to renew the commercial property insurance contract with Affiliated FM for the policy period July 1, 2026, through July 1, 2027, for the cost of $429,516.
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EXPLANATION OF FISCAL/FTE IMPACTS
This contract is included in the 2026 Office of Risk and Emergency Management budget in the General Fund and is funded by property tax levy.
|
Fund |
Department |
Program |
Funding Source |
2026 Amended Budget |
|
General Fund |
Office of Risk and Emergency Management |
Property Insurance |
Property Tax Levy |
$537,536 |
☐ 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, 2026; 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 Director of Risk and Emergency Management 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, 2026 - July 1, 2027 Premium $429,516
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PREVIOUS BOARD ACTION
25-290; 06/24/25
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