HomeMy WebLinkAbout6.h. Accept Tort Liability Insurance LimitsAGENDA ITEM: Accept Tort Liability Insurance Limits
AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director
EppE #6 H
ATTACHMENTS: Recommendation Letter from Dan
Peterson, Risk Management Consultant;
LMCIT Liability Coverage Waiver Form
APPROVED BY:
RECOMMENDED ACTION: Motion to waive the monetary limits on tort liability established
by Minnesota Statutes 466.04, to the extent of the limits of the liability coverage obtained
`from LMCIT.
+�C ROSEMOUN 1
CITY COUNCIL
City Council Meeting Date: November 15, 2005
ISSUE
Annual selection of tort liability insurance lints
BACKGROUND
Cites obtaining liability coverage from the League of Minnesota Cities Insurance Trust (LMCIT) must
decide whether or not to waive the statutory tort liability ]units. In the past, The City has waived the
$300,000 $1,000,000 tort cap hint and has elected the $1,000,000 $1,000,000 hint Last year the
premium for the additional coverage was $3,960 By waiving the statutory tort limit cap and getting the
"better coverage the City is better protecting itself in the event of a serious accident or unusual claim In
switching, the feeling is that the additional premium is money well spent by the City to protect itself and
ultunately, its citizens.
The City Council has to annually take the action to waive the statutory tort liability limits and to accept the
LMCIT's higher coverage Attached is a form that the Mayor will then have to sign and we will return to
LMCIT for the msutution of this coverage Also attached is a letter from Dan Peterson, our risk
management consultant, recommending that we continue the coverage of $1,000,000 $1,000,000 for the
plan year 12/1/05 through 11/30/06.
SUMMARY
Recommend the above motion.
EXECUTIVE SUMMARY
October 31, 2005
Mr. Jeff May
Finance Director
City of Rosemount
2875 145`" Street West
Rosemount, MN 55068 -4997
Re Maximum Tort Liability
Dear Jeff
Since January 1, 2000, the statutory municipal tort liability limit has been:
$300,000 when the claim is one for death by wrongful act or omission and
$300,000 to any claimant in any other case
$1,000,000 for any number of claims arising out of a single occurrence
You do have the options of waiving this limitation by selecting a higher limit of liability
through the League of Minnesota Cities Insurance Trust (LMCIT) For the current
coverage period of December 1, 2004 to December 1, 2005, you have elected to
purchase insurance coverage in the amount of $1,000,000 each occurrence which
allows an individual claimant to recover up to $1,000,000 as opposed to the statutorial
$300,000 limit. By accepting this higher limit you have waived the statutory limitations
but the City of Rosemount's liability will not exceed the extent to which valid and
collectible insurance exceeds the tort limitations and covers the claim
I recommend that you continue with the $1,000,000 per claimant, $1,000,000 per
occurrence limit and sign the waiver form provided by the League of Minnesota Cities
Insurance Trust The reasons for doing this are:
LarsonAlleri"
CPAs, Consultants Advisors
www larsonallen com
Your exposure is limited by the limit you select
A person Injured seriously due to the City's negligence stands a better
chance of being fully compensated
If a loss was not to fall under the statutory cap under federal statutes
perhaps. •reater protection would be available to the City.
Daniel E Peterson
Manager, Risk Management
320 203 -5523
PO Box 1067, St. Cloud, MN 56302 -1067, 320/203 -5500, Fax 320/253 -7696
Larson, Allen, Wetsbau Co LLP I An Independent Member of Baker Tilly International
LEAGUE OF MINNESOTA CITIES INSURANCE TRUST
LIABILITY COVERAGE WAIVER FORM
Cities obtaining liability coverage from the League of Minnesota Cities Insurance Trust must decide
whether or not to waive the statutory tort liability limits to the extent of the coverage purchased. The
decision to waive or not to waive the statutory limits has the following effects
If the city does not warve the statutory tort limits, an individual claimant would be able to recover no
more than $300,000 on any claim to which the statutory tort limits apply The total which all claimants
would be able to recover for a single occurrence to which the statutory tort limits apply would be
limited to $1,000 000 These statutory tort limits would apply regardless of whether or not the city
purchases the optional excess liability coverage.
If the city waives the statutory tort limits and does not purchase excess liability coverage, a single
claimant could potentially recover up to $1,000,000 on a single occurrence The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would
also be limited to $1,000,000., regardless of the number of claimants.
If the city waives the statutory tort limits and purchases excess liability coverage, a single claimant
could potentially recover an amount up to the limit of the coverage purchased. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would
also be limited to the amount of coverage purchased, regardless of the number of claimants
Claims to which the statutory municipal tort limits do not apply are not affected by this decision
This decision must be made by the city council. Cities purchasing coverage must complete and
return this form to LMCIT before the effective date of the coverage. For further information, contact
LMCIT. You may also wish to discuss these issues with your city attorney.
The City of Rosemount accepts liability coverage limits of $1,000,000/$1,000,000 from the League of
Minnesota Cities Insurance Trust (LMCIT).
Check one:
C
The city DOES NOT WAIVE the monetary limits on municipal tort liability established by
Minnesota Statutes 466 04
The city WAIVES the monetary limits on tort liability established by Minnesota Statutes 466.04,
to the extent of the limits of the liability coverage obtained from LMCIT.
Date of city council meeting November 15, 2005
Signature /Date Position Mayor
Return this completed form to LMCIT, 145 University Ave. W, St Paul, MN, 55103 -2044
LMCIT (11 /00)(Rev 11/03) Page 1 of 1