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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 LMCIT (11 /00)(Rev 111/03) Pg 1 of 1