California-counties-including-sonoma-struggling-under-skyrocketing-insurance-costs

Home and business owners aren’t the only ones struggling to manage rising insurance costs in the North Bay and across California. Counties are too, and it’s forcing tough conversations about how to maintain public services in places, including Sonoma County, as spiking liability coverage, especially for law enforcement, eats away at government budgets. Sonoma County has seen its overall liability insurance costs go up more than 500% in the past decade, according to data obtained by The Press Democrat. The county’s spending on that insurance has gone from under $3.8 million for fiscal year 2014-2015 to almost $23.8 million for 2024-2025. “It’s a lot of money, and so it’s really hard when you see these costs and you look at the services that you want to be able to provide to the community,” Sonoma County Human Resources Director Janell Crane said. “Although the county is able to continue to pay for insurance, it’s having an impact on what we’re able to provide at the end of the day.” Liability coverage is a core type of insurance local governments manage along with property and workers’ compensation that protects against financial loss from claims of injury, death negligence or damage. Local governments have reported double annual digit increases to their coverage costs in recent years. Like in Sonoma County, Napa County has seen its general liability insurance costs more than double in the past five years, and officials expect those costs to continue to rise by as much as 20% annually over the next few years. “These costs are paid for by our general fund which pays for other critical services,” Napa County Chief Executive Officer Ryan Alsop said, calling it “among the most significant fiscal challenges for governments throughout the state.” “The insurance market here in the state no longer exists to ensure counties can provide critical services like law enforcement, wildfire protection, other services in unincorporated parts of the state that residents truly rely on counties for,” said Ben Adler, spokesperson for the California State Association of Counties. “It’s just reached a point where counties are cutting public services, so it’s a real issue.” Adler pointed to the recent exodus of several insurance companies from California and a loss of about 85% of the reinsurance market which limits counties to fewer and often more expensive options. Some counties are seeing liability premiums rise by as much as 1000%, he said, or policies being written to only cover a certain number of claims against a county or only up to a certain amount. Another main driver, according to insurance industry experts: litigation trends, including steadily increasing jury awards, and especially nuclear verdicts – a term for awards over $10 million. California generally does not cap liability damages. “It’s partly the hard insurance market and then with these other factors combined it’s like a perfect storm that’s creating these challenges for all public agencies,” Crane said. But counties’ exposure to litigation in the first place is also affected by their own policies and employees’ actions. In Sonoma County, the Sheriff’s Office accounts for the largest share of the county’s insurance costs – not uncommon given the high risk involved in policing and the large share of the overall municipal workforce made up by law enforcement. Specifically, however, the agency accounts for more than half of the county’s overall liability insurance costs – $13.1 million for 2024-2025 – although that’s down from previous years, when it has topped 60%. The Sheriff’s Office also has one of the county’s largest budgets, at $246.5 million for 2024-2025, and most of the county’s 28 departments and independent agencies have seen steady increases, but the Sheriff’s Office’s insurance costs have spiked in comparison. Since 2020, the department’s liability insurance line item is up almost 125%.The agency’s large payroll is a key factor in its hefty insurance costs, according to Crane, but civil settlements over deputies’ use of force have also driven increases. And, that’s put a strain on the Sheriff’s Office budget before. In 2020, then-Sheriff Mark Essick clashed with the Board of Supervisors over budget cuts as the department faced a $2.7 million increase in annual premiums following settlements totaling $6.6 million in three federal civil rights cases for excessive force or wrongful death. Those cases included a deputy’s 2013 fatal shooting of 13-year-old Andy Lopez, a 2014 SWAT deployment that ended in a man’s suicide and controversial discipline practices in the jail known as “yard counseling” that led to a 2015 lawsuit. Critics at the time pointed to the rising costs, ultimately taxpayer-funded, in calling for more oversight and action by local officials to crack down on misconduct and unnecessary use of force by law enforcement. “The Sheriff’s Office takes proactive measures, including regular training and working with (the county’s Risk Management division) to identify and implement best practices,” the Sheriff’s Office said in a written statement responding to questions about its insurance burden. “Staff review every claim and lawsuit to identify lessons learned and evaluate whether policy or practice changes could help prevent future liability. In addition, we study best practices across law enforcement and monitor cases at other agencies that may have implications for our operations.” “Budget considerations are always a concern for the Sheriff’s Office, as they can directly affect the level of services we are able to provide to our community,” Sheriff’s Office spokesperson Sgt. Juan Valencia said. Higher premiums, less insurers for law enforcementThe insurance industry has been backing away from law enforcement agencies, offering tightened or costlier policies over the past several years, according to Dorothy Gjerdrum, senior managing director for the public entity practice of Gallagher, a major global insurance, risk management and consulting company. That’s especially been the case since the May 2020 murder of George Floyd by Minneapolis police which amplified attention on incidents of police brutality and shifted public perception about law enforcement. An analysis by Gallagher noted the challenge as one of the public sector insurance trends to watch in 2025. In New York, some legislators have gone as far as introducing legislation that would require police officers individually obtain liability insurance to pay for civil cases and judgments. It’s a complex problem to solve, Gjerdrum said, with a job that inherently involves high-risk duties, but implementing policies and training that focus on clear procedures and de-escalation and address misconduct can lead to lower premiums. In some cases, the incentive, or the threat of higher costs or losing coverage altogether, has been a significant driver of reform. “We’re always trying to ensure our policies and practices are improving so that we have less losses,” Crane, Sonoma County’s head of Human Resources said of the Sheriff’s Office and other county departments. “Anytime there’s a reduction in claims, it has a positive impact.” She pointed to the Sheriff’s Office review of its canine policy as an effective recent reform. After multiple complaints and two lawsuits about police dog attacks – which eventually led to more than $2 million in settlements combined – Sheriff Eddie Engram hired an outside consultant to help the department make a number of changes to its use of dogs in the field in January 2024. At the same time, the agency has continued to face high-profile lawsuits. This year, the county reached settlements over the fatal 2022 shooting of farmworker David Peláez-Chavez and mail policies in the county jail. The county was cleared of responsibility for a jail overdose death by a federal jury last month, but litigation over another death in the jail in 2023 is still ongoing. Fraying safety netHow California counties manage their risk across departments has implications for local governments throughout the state. Sonoma County is self-insured and like 54 of 58 counties, including Napa, Lake and Mendocino counties, it purchases excess coverage through a risk sharing pool, Public Risk Innovation Solutions and Management (PRISM). The advantage of that pool, like many such insurance arrangements, is it helps spread the cost. But there’s a flip side, in that actions and payouts of other counties in the pool can drive up premiums for all. The stability of shared risk pools, along with public entity solvency generally, have become a particular concern as school districts and other government agencies across the state confront a wave of litigation and massive settlements after a state law extended the deadline to file child sexual abuse lawsuits. In April, Los Angeles County reached a $4 billion settlement over sexual abuse in juvenile facilities and foster homes spanning decades. Santa Monica officials declared a fiscal emergency Wednesday, after the city paid out $229 million in settlements and still faces more than a hundred more sexual abuse claims. Such massive claims haven’t been an issue for Sonoma County government so far, Crane said. But, the soaring trajectory of underlying insurance costs could ultimately prove unsustainable. And, patchwork solutions have so far come up short, including on Wednesday, when controversial legislation that would have amended the sexual abuse claims process failed to advance in Sacramento. “People might come to this discussion by a lot of different paths,” – law enforcement, school districts, road maintenance and safety – “but regardless of where everyone comes from, all paths lead to this really hard to solve crisis,” Adler said. “Counties are responsible for providing the safety net. Insurance is supposed to be the safety net for counties. So, the safety net for the safety net is fraying, and in some cases, just disintegrating. Counties are already hard up, and you’re going to see that in budgets over the coming months and years, unless something is done about it.” Press Democrat web developer George Buce produced the graphs for this story. You can reach Staff Writer Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On X (formerly Twitter) @marisaendicott and Facebook @InYourCornerTPD.

© 2025 The Press Democrat (Santa Rosa, Calif.). Visit www.pressdemocrat.com. Distributed by Tribune Content Agency, LLC.

The post california-counties-including-sonoma-struggling-under-skyrocketing-insurance-costs appeared first on Insurance News | InsuranceNewsNet.