TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Lisa Jenkins, Human Resources Director
Briza Morales, Risk Manager
SUBJECT:Title
Consideration of a Resolution Approving a Five-Year Agreement with AdminSure, Inc. for Third-Party Administration Services in Support of the Self-Insured General Liability Program for an Amount Not-To-Exceed $255,000 (Budgeted) (Human Resources Director Jenkins).
ADOPT RESOLUTION NO. 26-0062
Body
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RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 26-0062 approving a five-year agreement with AdminSure, Inc. (AdminSure) for third-party administration of general liability claims and litigation management services in the amount not-to-exceed $255,000.
FISCAL IMPLICATIONS:
Sufficient funding for this agreement is budgeted in the Fiscal Year (FY) 2026-2027 Risk Management Liability program within the Insurance Reserve Fund. Funds for FY 2027-2028 through FY 2030-2031 will be budgeted accordingly.
Fiscal Year Amount
2026 - 2027 $ 45,000
2027 - 2028 $ 48,000
2028 - 2029 $ 51,000
2029 - 2030 $ 54,000
2030 - 2031 $ 57,000
5-year Total $255,000
BACKGROUND:
The City administers a self-insured general liability program and maintains a self-insured retention (SIR) of $500,000 per claim. In addition, the City purchases general liability insurance through the risk-sharing pool Public Risk Innovation, Solutions, and Management (PRISM), formerly known as the California State Association of Counties-Excess Insurance Authority (CSAC-EIA), for coverage up to $25 million per claim, inclusive of the SIR.
DISCUSSION:
As a self-insured public entity, the City contracts with a third-party administrator (TPA) to administer its general liability claims and assist with litigation management. The TPA is responsible for assigning personnel with the knowledge and skills to collaborate effectively and efficiently with claimants, attorneys, and staff in investigating all claims. The TPA makes recommendations to the City on the appropriate disposition of claims, such as compromising or rejecting a claim. The TPA manages each claim through final resolution and ensures that all necessary documentation and reporting are completed. The TPA attends settlement conferences, mediations, and other appointments as necessary. The TPA also serves as the City's lead representative in Small Claims Court matters.
The TPA is responsible for complying with all applicable laws and regulations, including Medicare’s strict reporting requirements for claimants who are Medicare recipients. Additionally, the TPA is responsible for complying with PRISM’s underwriting and claims administration standards, including reporting of loss and exposure data and claim auditing procedures. PRISM coordinates claims audits, which are conducted every two years.
AdminSure has provided liability claims administration services to the City for over 25 years, and the City’s current agreement with AdminSure expires on June 30, 2026. They have specialized in serving public entities across California since 1982 and currently serve 102 Public Entities. They are the current provider for several surrounding cities, including Redondo Beach, Hermosa Beach, and Hawthorne. AdminSure’s familiarity with the City’s claim history and unique jurisdictional characteristics enables timely, efficient resolution of many claims. AdminSure has demonstrated competence in and commitment to delivering these services to the City and has been integral to the City’s ability to maintain a proactive claims management program.
AdminSure has historically provided the City with pricing below its standard rates for general liability claims handling as an incentive to use AdminSure for both general liability and workers’ compensation administration.
To ensure competitive pricing, staff surveyed the current (FY 2026) TPA cost from surrounding cities and yielded the following results:
|
Agency |
TPA |
General Liability (GL) Annual Fee |
Average # of GL Claims Per Year |
Average GL Fee Per Claim |
|
Manhattan Beach |
AdminSure |
42,000.00 |
41 |
1,024.39 |
|
Newport Beach |
AdminSure |
135,000.00 |
114 |
1,184.21 |
|
Beverly Hills |
Corvell |
150,000.00 |
110 |
1,363.64 |
|
Hawthorne |
AdminSure |
92,820.00 |
65 |
1,428.00 |
|
Hermosa Beach |
AdminSure |
34,776.00 |
24 |
1,449.00 |
|
Redondo Beach |
AdminSure |
115,980.00 |
80 |
1,449.75 |
|
El Segundo |
AdminSure |
43,114.00 |
25 |
1,724.56 |
|
Torrance |
Sedgwick |
240,000.00 |
125 |
1,920.00 |
The proposed five-year agreement includes a modest 3% annual increase, which reflects AdminSure’s commitment to providing continued service to the City at a competitive rate.
Pursuant to the Manhattan Beach Municipal Code (MBMC) Section 2.36.130, contracts for the services of specially trained and professional individuals are exempt from the bidding process. However, if the contract amount reaches or exceeds $75,000, it must be approved by the City Council. Accordingly, staff recommends that the City Council adopt the resolution approving the agreement with AdminSure, Inc.
ENVIRONMENTAL REVIEW:
The activity subject to this action is not a “project” as defined in Section 15378 of the California Environmental Quality Act (CEQA) guidelines. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 26-0062
2. Agreement - AdminSure, Inc.