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Home My WebLink About6.o. Accept Tort Liability Insurance LimitsR CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: December 4, 2001 AGENDA ITEM: Accept Tort Liability Insurance Limits PREPARED BY: Jeff May, Finance Director ATTACHMENTS: Recommendation Letter from Dan Peterson, Risk Management Consultant; LMCIT Liability Coverage - Waiver Form AGENDA SECTION: Consent AGENDAM- a APPROVED BY: 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 additional coverage cost the City an added $3,706 in premium. 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 was that the additional $3,700 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 12/1/01 through 11/30/02. 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: October 25, 2001 911 18th Street North, PO Box 1067, St. Cloud, MN 56302 -1067 320/253 -8616, fax 320/253 -7696, www.larsonallen.com Mr. Jeff May Finance Director City of Rosemount 2875 145 Street West Rosemount, MN 55068 -4997 Re: Maximum Liability Dear Jeff: Since January 1, 2000, the maximum liability per Minnesota Statute 466.04 shall not exceed $300,000 when the claim is one for death by act or omission and $300,000 to any claimant in any other case; and $1,000,000 for any number of claims arising out of a single occurrence. You have two options available under the League of Minnesota Cities Insurance Trust. The first is to accept these statutory limits. The other option is to waive this limitation and to select a limit of $1,000,000 per claimant, $1,000,000 per occurrence. recommend that you continue with the $1,000,000 per claimant, $1,000,000 per occurrence limit. The reasons for making this recommendation are: • Since 1998, when the Tort Cap Limit was raised from $600,000 per occurrence to $750,000 per occurrence and subsequently to $1,000,000 on January 1, 2000, you have chosen to provide this increasing limit on a per claimant basis. • 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 - greater protection would be available to the City. By signing the waiver form provided by the League of Minnesota Insurance Trust you will have selected this increased limit as recommended. 1 N, #LLEN, VVEISHAIR & CO., LLP Dlani0 E. Peterson Manager /Risk Management 320\203 -5523 groups /insurance /2001 /city of rosemount Business Consultants Certified Public Accountants r , t LMCIT 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 4, 2001 Signature Position Mayor Return this completed form to LMCIT, 145 University Ave. W., St. Paul, MN. 55103 -2044 Page 1 of 1