HomeMy WebLinkAbout6.e. Accept Tort Liability Insurance Limits 4 ROSEMOUNT EXECUTIVE SUMMARY
CITY COUNCIL
City Council Meeting Date: November 17, 2009
I AGENDA ITEM: Accept Tort Liability Insurance Limits AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO. b.e.
ATTACHMENTS: Recommendation Letter from Dan
Peterson, Risk Management Consultant; APPROVED BY:
LMCIT Liability Coverage Waiver Form DIU
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.
ISSUE
Annual selection of tort liability 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
$500,000 $1,500,000 tort cap limit and has elected the $1,500,000 $1,500,000 limit. Last year the
premium for the additional coverage was $3,639. 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 increase the coverage to $1,500,000 $1,500,000 for the
plan year 12/1/09 through 11/30/10.
SUMMARY
Recommend the above motion.
INC. INSURANCE ADVISORS, INC.
26 E. Birch Street PO Box 1017 St. Joseph, MN 56374
(320) 363 -0007 (800) 969 -7364 Fax (320) 363 -8581
Mr. Jeff May November 4, 2009
Finance Director
City of Rosemount
2875 145 Street West
Rosemount, MN 55068 -4997
Re: Maximum Tort Liability
Dear Jeff,
The Minnesota statute regarding the maximum tort liability limit for any municipality changed
effective July 1, 2009 to:
$500,000 when the claim is for death by wrongful act or omission and,
$500,000 to any individual claimant in any other case and,
$1,500,000 for any number of claims arising out of a single occurrence.
You do have the option of waiving the $500,000 limitations by selecting a higher limit of
liability through the League of Minnesota Insurance Trust (LMCIT). Because of the change that
occurred effective July 1 you currently have insurance coverage in the amount of:
$1,500,000 when the claim is for death by wrongful act or omission and,
$1,500,000 to any individual claimant in any other case and,
$1,500,000 for any number of claims arising out of a single occurrence,
which allows an individual claimant to recover up to $1,500,000. This does not subject the City
of Rosemount to any additional risk because, by statute, your liability will not exceed the extent
to which valid and collectible insurance exceeds the tort limitations and covers the claim.
Because:
-your exposure is the limit you select
-a person injured seriously due to the City's negligence stands a better chance of
being more adequately compensated
-a loss may fall under federal statutes and not be limited by this Minnesota
statute
I recommend that you continue to select the $1,500,000 per claimant to coincide with the
$1,500,000 per occurrence and sign the waiver form provided by the League of Minnesota
Insurance trust.
Since
0. a "eer n
Risk Management
"ADVISING YOU ON INSURANCE"
PROPERTY /CASUALTY LIFE HEALTH INVESTMENTS
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 $500,000.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 $1,500,000. 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 $1,500,000. 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 $1,500,000., 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 $1,500,000 $1,500,000 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 17, 2009
Signature /Date Position Mayor
Return this completed form to LMCIT, 145 University Ave. W., St. Paul, MN. 55103-2044
LMCIT (11/00)(Rev.07/09) Page 1 of 1