REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 23, 2026
FROM
REBECCA SUAREZ, Director, Department of Risk Management
SUBJECT
Title
Renewal Cyber Liability Insurance, Exporters Package Portfolio, Watercraft Hull and Indemnity Insurance, and Business Auto Liability Insurance
End
RECOMMENDATION(S)
Recommendation
1. Approve the renewal of the County’s Cyber Liability Insurance Program, which includes the following layers, with total coverage limits of $50,000,000 in excess of $2,000,000 self-insured retention, as recommended by the County broker, Arthur J. Gallagher & Co. Insurance Brokers of California Inc., for a total premium of approximately $2,436,369, for the one-year period of July 1, 2026, through July 1, 2027:
a. A primary layer of $5,000,000, in excess of $2,000,000 self-insured retention, for a premium of approximately $644,875.
b. A secondary layer of $5,000,000, in excess of $5,000,000 primary layer, for a premium of approximately $378,683.
c. A third layer of $5,000,000, in excess of $10,000,000 of underlying insurance, for a premium of approximately $306,444.
d. A fourth layer of $5,000,000, in excess of $15,000,000 of underlying insurance, for a premium of approximately $225,237.
e. A fifth layer of $10,000,000, in excess of $20,000,000 of underlying insurance, for a premium of approximately $361,130.
f. A sixth layer of $10,000,000, in excess of $30,000,000 of underlying insurance, for a premium of approximately $295,000.
g. A seventh layer of $10,000,000, in excess of $40,000,000 of underlying insurance, for a premium of approximately $225,000.
2. Approve the renewal of the following insurance programs, as recommended by the County broker, Arthur J. Gallagher & Co. Insurance Brokers of California Inc., for a total premium of approximately $59,903, for the one-year period of July 1, 2026, through July 1, 2027:
a. Exporters Package Portfolio with $1,000,000 per occurrence and aggregate limits, for a premium of approximately $2,500.
b. Watercraft Hull and Indemnity with $1,000,000 per occurrence and aggregate limits, for a premium of approximately $40,312.
c. Business Auto Liability for the San Bernardino County Fire Protection District with $1,000,000 per occurrence and aggregate limits, for a premium of approximately $17,091.
3. Authorize the Chief Executive Officer, County Chief Financial Officer, or Director of Risk Management to execute the initial binding orders on behalf of the County and any subsequent binding orders, documents, or quotes necessary to approve mid-term change orders for additional coverage, not-to-exceed 15% over the estimated renewal cost, per insurance program and premium, for the period of July 1, 2026, through July 1, 2027 for Recommendation Nos. 1 and 2, subject to review by County Counsel.
4. Authorize the Purchasing Agent to approve change orders to purchase orders issued for the insurance programs and premiums in Recommendation Nos. 1 and 2, for mid-term changes, subject to the limits referenced in Recommendation No. 3.
(Presenter: Rebecca Suarez, Director, 386-8723)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The total aggregate premium of approximately $2,496,272 for all insurance programs included in Recommendation Nos. 1 and 2 will be paid from the Department of Risk Management’s (DRM) liability funds and will be recovered through Board of Supervisors (Board) approved rates charged to County departments and Board-Governed Special Districts. Sufficient appropriation and revenue have been included in DRM’s 2026-27 budget.
BACKGROUND INFORMATION
DRM administers the County’s self-insurance programs and maintains 28 different lines of insurance policies to provide additional protection for the County. On June 10, 2025 (Item No. 109), the Board approved the renewal of the Cyber Liability, Exporters Package Portfolio, Watercraft Hull and Indemnity, and Business Auto Liability Insurance programs for the period of July 1, 2025, through July 1, 2026.
On August 5, 2025 (Item No. 84), the Board approved to ratify the execution of the initial binding orders to renew the secondary and third layer of the Cyber Liability insurance coverage with a change in carriers. The County’s insurance broker identified the same coverage with different carriers for the County’s second and third layers of coverage and recommended a change in carriers for these policies to achieve a premium reduction of approximately $174,000.
On August 5, 2025 (Item No. 84), the Board approved to ratify the execution of the initial binding order to renew the County’s Exporters Package Portfolio with $1,000,000 per occurrence and aggregate limits for a premium of $2,875 with ACE American Insurance Company (CHUBB) for the one-year period of July 1, 2025, through July 1, 2026.
On November 4, 2025 (Item No. 43), the Board approved to ratify the execution of the initial binding order to renew the County’s Business Auto Liability Insurance with $1,000,000 per occurrence and aggregate limits for a premium of $17,541 with National Liability & Fire Insurance Company for the one-year period of July 1, 2025, through July 1, 2026. On the same Board item, the Board approved to authorize the Chief Executive Officer (CEO), the County Chief Financial Officer (CFO), or the Director of DRM (Director) to execute, on behalf of the County, any subsequent binding orders, documents, or quotes necessary to approve mid-term change orders for additional coverage, not-to-exceed 10% over the actual renewal cost, for the period of July 1, 2025, through July 1, 2026, subject to review by County Counsel. The County has established contracts with four insurance brokers, including Arthur J. Gallagher & Co. Insurance Brokers of California Inc. (Arthur J. Gallagher & Co.). The insurance brokers are responsible for conducting a thorough analysis of all current insurance programs to identify coverage overlaps and/or coverage deficiencies, and to compare and evaluate current programs against available insurance markets to determine if the current placements are the most cost-effective alternatives.
Approval of Recommendation No. 1 will provide a new one-year coverage period of July 1, 2026, through July 1, 2027, for the Cyber Liability Insurance program for a total premium of approximately $2,436,369. This represents an increase of $312,608, or approximately 14.7%, over last year’s final premium of $2,123,761. Several factors contributed to this increase including an increase in the frequency, severity and complexity of ransomware incidents, and breaches affecting private and public entities during the previous year. The County has implemented several cyber security measures to mitigate these risks due to the increased cyber threat landscape. These measures include increasing total coverage limits to $50,000,000 and conducting and measuring workforce training annually for cyber security awareness, including continuous training for new employees, monthly Phishing Simulation Awareness Exercises, and implementation of a Phish Alert Report button in the email client, and management of cyber threat intelligence with various partners including at the federal government level.
The recommended renewal of the Cyber Liability Insurance Program will provide terms similar to last year’s policies with an increased total to coverage limits of $50,000,000 and a self-insured retention (SIR) of $2,000,000. The DRM recommends the renewal of the County’s Cyber Liability Insurance program to provide coverage for the following risks: third party liability, media, privacy and cyber-security, privacy regulatory defense, awards and fines, first-party business interruption and extra expenses, data recovery, cyber extortion and/or ransomware, data breach response, and crisis management.
Approval of Recommendation No. 2 will provide a new one-year coverage period of July 1, 2026, through July 1, 2027, for the various insurance programs listed, maintaining the same coverage limits as the expiring policies. The total aggregate premium cost of approximately $59,903 represents an increase of $1,055, or approximately 1.8%, over last year’s final premium cost of $58,848. The DRM recommends the renewal of these insurance programs to protect the County’s financial assets from liability arising from the daily activities and services that the County provides.
The final premium amounts will not be available until closer to the actual renewal date due to the complexity of the negotiations the County’s broker engages in with multiple insurance carriers on behalf of the County to develop the insurance coverage. Recommendation No. 3 will authorize the CEO, CFO, or Director to execute the binding order on behalf of the County, ensuring a timely renewal process with no lapse in coverage.
Additionally, Recommendation No. 3 will authorize the CEO, CFO, or Director to execute any subsequent binding orders, documents, or quotes necessary to approve mid-term changes to the policies referenced in Recommendation Nos. 1 and 2 for additional coverage, subject to a not-to-exceed limit of 15% over the total estimated renewal cost, per insurance program and premium, for the period of July 1, 2026, through July 1, 2027.
DRM recommends approval of the Recommendations to continue to provide adequate insurance coverage for County cyber-related business and various assets, thus reducing the exposure to significant risk.
PROCUREMENT
On November 16, 2021 (Item No. 62), the Board approved a contract with insurance brokers including Arthur J. Gallagher & Co., for the period of December 11, 2021, through December 10, 2026. The DRM contracts with multiple brokers to leverage the experience each holds in a specific market. Arthur J. Gallagher & Co. approached new and existing markets for quotes, successfully obtaining a proposal for the Cyber Liability Insurance Program, Exporters Package Portfolio, Watercraft Hull and Indemnity Insurance, and Business Auto Liability Insurance for the period of July 1, 2026 through July 1, 2027. The Purchasing Department supports this non-competitive procurement based on the specialized credentials of the insurance brokers selected.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (G. Ross Trindle III, Chief Assistant County Counsel, 387-5455) on May 19, 2026; Purchasing (Ariel Gill, Supervising Buyer, 387-2065) on May 19, 2026; and County Finance and Administration (Eduardo Mora, Administrative Analyst, 387-4376) on June 8, 2026.