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Home My WebLink About6.r. Accept Tort Liability Insurance Limits CITY OF ROSEMOUNT - EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: November 2, 1999 AGENDA ITEM: Accept Tort Liability Insurance Limits AGENDA SECTION: Consent PREPARED BY: Jeff May, Finance Director AGENDA NO. ATTACHMENTS: Recommendation Letter from Bill Kloepfer, APPROVED BY: Former Risk Management Consultant; Recommendation Letter from Dan Peterson, Current Risk Management Consultant; LMCIT Liability Coverage - Waiver Form / For our 12/1/97 through 11/30/98 insurance plan there was a change in our tort liability limits, which required action by the Council. The tort limit was raised from $200,000 per person with an aggregate of$600,000 per occurrence to $300,000 per person with an aggregate of$750,000 per occurrence. In the past our insurance policy, as written by LMCIT, had limits of$600,000 per person with an aggregate of$600,000 per occurrence, which meant that the old tort limit cap had been waived. As of 1/1/98, LMCIT allows the City to choose between the new $300,000/$750,000 tort cap limit or a new program with a $750,000/$750,000 limit. The additional coverage cost the City an additional $4,079 a year in premiums. 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 $4,000 is money well spent by the City to protect itself and ultimately, its citizens. For the new plan year 12/1/99— 11/30/2000 the $750,000 limit is in effect for December and on January 1St the limit switches automatically to $1,000,000. According to Dan, this switch will not cause an increase in our premiums. 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 Bill Kloepfer, our former risk management consultant, recommending that we continue the coverage of $750,000/$750,000 for the plan year 12/1/98 through 11/30/99 and a letter from Dan Peterson, our current risk management consultant, supporting Bill's letter from the previous year and recommending we continue in the same manner. 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: �r Berkley Risk Services October 29, 1998 Jeff May Finance Director City of Rosemount 2875145�Street West Rosemount, MN 55068-4997 RE: Minnesota Tort Cap Dear Jeff: Effective January 1, 1998,the Tort Cap Liability Limit in Minnesota was raised from$200,000 per claimant, $600,000 per occurrence to$300,000 per claimant, $750,000 per occurrence. The League of Minnesota Cities Insurance Trust(LMICT)automatically changed their limits to reflect the new Tort Cap Limit and is offering two options: 1. The limit of$300,000 per claimant,$750,000 per occurrence,or 2. The limit of$750,000 per claimant,$750,000 per occurrence. You may choose either limit by signing the waiver form prepared by the LMCIT. It is our recommendation that you select the$750,000 per claimant, $750,000 per occurrence limit of liability for several reasons. 1. The increase in the"per claimant"limit from$300,000 to$750,000 only becomes applicable for someone injured by the City's negligence,and proven that hismer injuries exceed$300,000.Thus,the higher "per claimant"limit ensures a greater likelihood that someone suffering severe injuries will be fully compensated. 2. Some losses do not fall within the statutory cap;thus the added"per claimant"limit offers greater protection to the City. 3. It might be considered good public policy for the City to choose the higher"per claimant"limit. � 4. The City requires contractors performing work on behalf of the City to carry limits'in excess of$300,000 per claimant,$750,000 per occurrence. 5. The City's current limits are$750,000 per claimant,$750,000 per occurrence. The limits prior to 1998 were$600,000 per claimant,$600,000 per occurrence. 6. The cost for the increased per claimant limit is approximately$4,000. Once again,we recommend choosing the higher limit because it offers broader protection to the City for a nominal cost. Sincerely, i6'll lo�( e fer P Senior Consultant Berkley Ris�Services,uc 920 Second Avenue South,Suite 700•Minneapolis,hlinnesota 55�2-4�23• (612)376-4200•Fa�c:(612)376-4299 VVI LCJ Oi1 11\1 UL'LY I11 L�1ftJVIY f1LLGIY WGl�llfl111 �'flfl IYV� JLUCJII`tLU f� U1 s�� 8"'s�e.c Noro, Pd 8�10�7 St�C10ud.MtJ 5Qi�2-1067 Pfian�3�Y'153�61 B �uc 320r'153-7d9b www-l�so►a�an•c,arn .�` � ...�.,.. �Zo�2o�-S.�� 3 � � 1 From: 1 �:,,,�. c_-�-t v<<-� 70: ��,r�,'.►. F� r �/ �ax� l-C�:�t- -1�.3-, ��1Ua, D�t� lo �9 �'i _ p„��; pnduding Cover Sheet) ptw�,r.: � ` --t.,�. 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UV I LJ C1i1 f'[R 1 UC�L'J l l t LRlWV�V RLLGtY WG 1�JCIfI l It I"I'1h IYU� JCUC�1 14C0 r� U� �a LARSC�N i e o��AI_I._FN �) �j 1��j�1 S�-�f�I�� 911 18:h Strecl f�:��r:n &CsC).,LLP F.O. 6ox i067 5!.C;1pu:i,\q�;56302-1007 Ccr[ified PuE,(ic Aceountants 320/253-kiG1F, �t B:isiness Cc�nsultants Fax 320/?53-7690 hSrinLn c!i.��ivtut I:i�uneii0nal A»ou�tcs.frt<. . V.'1N�.N,�i7`P!(:n��Ei.C(:Ill \�1r. JcFf I�I:3v T'in�ic;c Direc:tur City Of RosCrTtUunt 2b7� 1=�5"' Strcct V4'cst 3�osemount,i1�Ih' ��OGt+-�1997 Rf',; 1�Iaximum Lis�bilit}• . DC�►•1cft; On JanEia�)� l,20U0,�1�-1211CSIlll1111 111bl�lty�ritl�iu Ihc scopc of Minncsota Statutcs Scction; ,�GG.0 I to�GG.15 u•ill rcui.iin at$300�C)OO CO �1�' C11Llltclilt}JLlt�\'II� lI1C!"C:lSC t0 �I,OOO,OOD for a�1y Siil��C OCCus'fC11CC, Curr�n41�� S�ou I�av4 Choscn to have 5'O11T�70ILCy}1T0Y1CIC�l.�7JO,000 per claim�nt, R7�0,000 per pCCLICCCIICL' illlllt Of L11b111L}�. �Vhcn this polic�� rcne��'s D�c4mUer 1, Iy)9,tl�ese limits��•ill C��1]tlI1L1C. OIl.IaliLfll�� 1,2QU0, thc limits «�ill automatically cl�angc to$1,UOU,ODU per clai�nant, �t,000,OQ0 J��r occurrencc. It is m�-undcrstandin�*that thc �rcmium ��ill nof ir,cr��c.in c��njunclion�ti�itli�liis changc in limits. 1 r�cc�n�mcnd tl�at�-ou aceept ihis�tiilomatic incrc;asc irt limits,as it�pplics to cach claiin��t for thc s�vnc rcasorts you ha,v�pr,;viously sclected thi; $GUU,UUO:u�d thc:n thc;�750,000 per claimant limit. Siitccrul5•, :� I,ARS �V;nLL,EN,WF:I,S��A1R S:C:()., LLP , .-�� --'��{� `I �� T�a�iicl �. �'cti:rso�l Managcr 32U1203-i523 3.2 5 73',�o s�m ountlI.1 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 ciry 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 $750,000. These statutory tort limits would apply regardless of whether or not the city purchases the optional excess liability coverage. . If the ciry waives the statutory tort limits and does not purchase excess liabiliry coverage, a single claimant could potentially recover up to $750,000 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 $750,000, regazdless of the number of claimants. . If the city waives the statutory tort limits and purchases excess liability coverage, a single claimant could potentially recover an amount up to the limit of the coverage purchased. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage purchased, regardless of the number of claimants. Claims to which the statutory municipal tort limits do not apply are not affected by this decision. This decision must be made by the city council. Cities purchasing coverage must complete and return this form to LMCIT before the effective date of the coverage. For further information, contact LMCIT. You may also wish to discuss these issues with your city attorney. The City of accepts liability coverage limits of$ 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 Signature Position Return this completed form to LMCIT, 145 University Ave. W., St. Paul, MN. 55103-2044 Page 1 of 1