HomeMy WebLinkAbout6.d. Accept Tort Liability Insurance LimitsAGENDA ITEM: Accept Tort Liability Insurance Limits
AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director
AGENDA NO.
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
ROSEMOUNT
CITY COUNCIL
City Council Meeting Date' November 7, 2006
EXECUTIVE SUMMARY
ISSUE
Annual selection of tort liabihty insurance limits
BACKGROUND
Cities obtaining liability coverage from the League of Minnesota Cities Insurance Trust LMCIT) must
decide whether or not to waive the statutory tort liability limits. In the past, The City has waived the
$300,000 $1,000,000 tort cap hrmt and has elected the $1,000,000 $1,000,000 limit. Last year the
premium for the additional coverage was $4,101. 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
ultimately, 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 institution of this coverage. Also attached is a letter from Dan Peterson, our risk
management consultant, recommending that we conunue the coverage of $1,000,000 $1,000,000 for the
plan year 12/1/06 through 11/30/07.
SUMMARY
Recommend the above motion.
Packet page 91 of 177
October 27, 2006
Mr. Jeff May
Finance Director
City of Rosemount
2875 145 Street West
Rosemount, MN 55068 -4997
Since
Daniel E. Peterson
Manager, Risk Management
320- 203 -5523
Packet page 92 of 177
LarsonAllen
CPAs, Consultants Advisors
www larsonallen.com
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 option 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, 2005 to December 1, 2006, 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 statutorlal
$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 $1,000,000.
I recommend that you continue with the $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.
Your exposure is 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 greater protection would be available to the City.
PO Box 1067, St Cloud, MN 56302 -1067, 320/203 -5500. Fax 320/253 -7696
Larson, Allen, Wetshatr Co., LLP I An Independent Member of Balzer Tilly Intemanonal
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 waive 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
o 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 attomey.
The City of Rosemount accepts liability coverage limits of $1,000,0001$1,000,000 from the League of
Minnesota Cities Insurance Trust (LMCIT)
Check one.
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 7, 2006
Signature Position Mayor
Date
Return this completed form to LMC1T, 145 University Ave. W, St. Paul, MN. 55103 -2044
Packet page 93 of 177
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