HomeMy WebLinkAbout6.m. Accept Tort Liability Insurance LimitsCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: December 7, 2004
AGENDA ITEM: Accept Tort Liability Insurance Limits
AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director
AGENDA
ITEM 6 'ill
ATTACHMENTS: Recommendation Letter from Dan
APPROVED BY:
Peterson, Risk Management Consultant; LMCIT Liability
Coverage - Waiver Form
/1-1�
Cities obtaining liability coverage from the League of Minnesota Cities Insurance Trust 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 limit and has elected the $1,000,000 / $1,000,000 limit. Last year the premium
for the additional coverage was $3,631. 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 continue the coverage of
$1,000,000/$1,000,000 for the plan year 12/1/04 through 11/30/05.
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.
COUNCIL ACTION:
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.
• 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:
The city DOES NOT WAIVE the monetary limits on municipal tort liability established by
Minnesota Statutes 466.04.
X 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 December 7, 2004
Signature
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
LarsonAll
CPAs, Consultants & Advisors
www.farsonallen.com
November 24, 2004
Mr. Jeff May
Finance Director
City of Rosemount
2875 145 Street West
Rosemount, MN 55068 -4997
Re: Maximum Tort Liability
Dear Jeff:
As you are aware, by statute, the liability for the City of Rosemount is limited to:
o $300,000 when the claim is one for death by wrongful act or omission and
$300,000 to any claimant in any other case; and
o $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). In the past 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. When you accept this higher limit you will have waived the
statutory limitation but the City of Rosemount's liability will not exceed the extent to
which valid and collectible insurance exceeds the 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:
• 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.
o If a los was not to fall under the statutory cap — under federal statutes
� greater protection would be available to the City.
per
Sin¢erel�,
`9afliel E. Peterson
Manager, Risk Management
320/203 -5523
PO Box 1067, St. Cloud, MN 56302 -1067, 320/203 -5500, Fax 320/253 -7696