Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2025 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.
The City of Palm Desert participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Palm Desert. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.
The City of Palm Desert participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Palm Desert property is currently insured according to a schedule of covered property submitted by the City of Palm Desert to the Authority. City of Palm Desert property currently has all-risk property insurance protection in the amount of $397,495,666. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.
The City of Palm Desert purchases crime insurance coverage in the amount of $10,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.
The City or Palm Desert further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Palm Desert according to a schedule. The City of Palm Desert then pays for the insurance. The insurance is facilitated by the Authority.
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were no significant reductions in pooled or insured liability coverage in the fiscal year 2024-25.
Estimates for all workers' compensation and general liabilities up to the self-insured levels have been recorded as long-term liabilities.