HomeMy WebLinkAbout7.b. Insurance for Temporary Non-Intoxicating Liquor LicensesCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: MARCH 5, 1991
AGENDA ITEM:
INSURANCE FOR TEMPORARY NON—
AGENDA SECTION:
INTOXICATING
LIQUOR LICENSES
NEW BUSINESS
PREPARED BY:
SUSAN M. JOHNSON, CITY CLERK
AGENDAb -D
ATTACHMENTS:
MEMORANDUM, ORDINANCE, CITY CODE
APP OVED=BY,:
SECTION 3-1-11, M.S. 340A.409
The City Code requires license holders of all types oj� intoxicating and
nonintoxicating licenses to have in effect liquor liability insurance with
minimum coverage in the amount of $100,000/$300,000. Attached is City Code
Section 3-1-11 regarding liquor liability requirements for your review. In
August, 1989, Council amended the City Code and increased the liquor
liability from the $50,000/$100,000 requirements to the $100,000/$300,000
after considering a recommendation from the City's insurance agent, Steve
Toombs. State Statutes only require the $50,000/$100,000 limits but allow
cities to increase the amount if they so choose. Attached for your review
is Minnesota Statutes 340A.409, subd. 1, regarding liquor liability
insurance.
Attached is a memorandum from Parks & Recreation Director David Bechtold
regarding his request to allow those organizations which sponsor softball
tournaments and apply for beer license to be required to have liquor
liability coverage according to statutory requirements.
I request Council's consideration that an exception be made for the
insurance requirements for temporary nonintoxicating liquor licenses, and
the limits be changed back to the statutory requirements of
$50,000/$100,000. Please note that this would not only effect licenses
issued for softball tournaments but any temporary beer license issued to an
organization. In the past the only other temporary nonintoxicating liquor
license was issued to Dakota County 40 & 8, Voiture 1457 for their chicken
Bar -B -Q during Leprechaun Days.
I would also like to add that I have discussed this recommendation with
Steve Toombs who was agreeable to lowering the limits simply because of
economics.
RECOMMENDED ACTION: ADOPT ORDINANCE NO. XVI.21, AN ORDINANCE
AMENDING TITLE 3 PERTAINING TO LIQUOR REGULATIONS
COUNCIL ACTION:
Adopted ordinance.
INSNONTOX.CC
TO Mayon / City Council
Stephan Jilk -- City Administrator
FROM; David J. Bechtold - Director of Parks & Recreation
DATE' February 27, IL991
RE. Change in city code related to liqu.oi- liability
The present liquor liability insurance required by the State of
Minnesota for the sale of nonintoxicating liquor is $ 50,000 /
$ 1005000. That is the amounof coverage that teams were required
t
to purchase when conducting tournaments in Rosemount. The city
rode calls for amounts of $ $100,000 / $ 500,000.
The premium that each team is required to pay when conducting a
tournament ';.n Rosemount with the lower rate of coverage is
$ 190.00 per weekend tournament.
Upon calling the MN. Sports Federation office to check on the rate
increase required for the higher level of coverage we found that
the premium is nearly tripled. That means that the dram shop
coverage could cost approximately 500.00 - 600.00 per weekend
touirnament.
A general summary of the costs a Rosemount. team faces when
conducting a. tournament is
PAST YEARS PRESENT
FIELD RESERVATION150.00 `� 150.00
k
CITY __IQUOR LICENSE i5 .00 30.00
DRAM SHOP LIABILITY 190.00 500.00 -600.0C)
:s =)-" . 00 $ 680.00 - 780.00
The a,mou,nt.s listed, are based upon a consistent of prof 1.t by the
people who handle the purchase and sale of the insurance pol.i.cies
to the teams and organizations.
The request of the Parks & Recreation Department is for council to
set the rate of liquor liability for nonintoxicating liquor at the
rate of $ 50,000 / 100,000. By using the lower rate as a
requirement it will make conducting tournaments in Rosemount
financially more reasonable for teams and organizat.i.onw.
3-1-10
3-1-12
3-1-10: SPECIAL CONDITIONS: At the time a license renewal is issued,
the City may attach special conditions to the license to protect
the welfare of the community. Violation of any of the conditions shall be
grounds for revocation of the license. (Ord. ll, 5-20-86, eff. 5-31-86)
3-1-11: LIABILITY INSURANCE: All applicants for any type of
intoxicating liquor, nonintoxicating malt liquor or wine license to
be issued or renewed must, as a condition to the issuance of the license,
demonstrate proof of financial responsibility with regard to liability imposed by
Minnesota Statutes, section 340A.801, to the City. Proof of financial
responsibility may be given by filing one of the following:
A. A certificate that there is in effect for the period of the license an
insurance policy or pool providing the following minimum coverages:
1. One hundred thousand dollars ($100,000.00) because of bodily injury
to any one person in any one occurrence and, subject to the limit for
one person, in the amount of three hundred thousand dollars
($300,000.00) because of bodily injury to two (2) or more persons in any
one occurrence, and in the amount of fifty thousand dollars ($50,000.00)
because of injury to or destruction of property of others in any one
occurrence;
2. One hundred thousand dollars ($100,000.00) for loss of means of
support of any one person in any one occurrence, and, subject to the
limit of one person, three hundred thousand dollars ($300,000.00) for
loss of means of support of two (2) or more persons in any one
occurrence; or
B. A bond of a surety company with the minimum coverages as provided in
subsection A of this Section; or
C. A certificate of the State Treasurer that the licensee has deposited with
him three hundred fifty thousand dollars ($350,000.00) in cash or
securities which may legally be purchased by savings banks or for trust
funds having a market value of three hundred fifty thousand dollars
($350,000.00). (Ord. XV1.20, 8-15-89)
3-1-12: RESTRICTIONS INVOLVING NIINORS:
A. No Sale to Minors: No licensee, his agent or employee shall serve or
dispense upon the licensed premises any intoxicating liquor or
nonintoxicating malt liquors to a person under the legal drinking age; nor
shall such licensee, or his agent or employee, permit any such person
to be furnished or consume any such liquors on the licensed premises;
nor shall such licensee, his agent or employee, permit any such person
to be delivered any such liquors.
1089
8000
340A.409 LIQUOR
340A.409 LIABILITY INSURANCE.
Subdivision 1. Insurance required. No retail license may be issued, maintained or
renewed unless the applicant demonstrates proof of financial responsibility with regard
to liability imposed by section 340A.801. The issuing authority must submit to the
commissioner the applicant's proof of financial responsibility. This subdivision does
not prohibit a local unit of government from requiring higher insurance or bond cover-
ages, or a larger deposit of cash or securities. The minimum requirement for proof of
financial responsibility may be given by filing:
(1) a certificate that there is in effect for the license period an insurance policy or
pool providing at least $50,000 of coverage because of bodily injury to any one person
in any one occurrence, $100,000 because of bodily injury to two or more persons in any
one occurrence, $10,000 because of injury to or destruction of properly of others in any
one occurrence, $50,000 for loss of means of support of any one person in any one
occurrence, and $100,000 for loss of means of support of two or more persons in any
one occurrence;
(2) a bond of a surety company with minimum coverages as provided in clause (1);
or
(3) a certificate of the state treasurer that the licensee has deposited with the state
treasurer $100,000 in cash or securities which may legally be purchased by savings
banks or for trust funds having a market value of $100,000.
This subdivision does not prohibit an insurer from providing the coverage
required by this subdivision in combination with other insurance coverage.
An annual aggregate policy limit for dram shop insurance of not less than $ 300,000
per policy year may be included in the policv provisions.
A liability insurance policy required by this section must provide that it may not
be canceled for:
(1) any cause, except for nonpayment of premium, by either the insured or the
insurer unless the canceling party has first given 30 days' notice in writing to the issuing
authority of intent to cancel the policy; and
(2) nonpayment of premium unless the canceling party has first given ten days'
notice in writing to the issuing authority of intent to cancel the policy.
Subd. 2. Market assistance. The commissioner of commerce shall advise licensees
and municipalities subject to the financial responsibility requirements of subdivision
1 of those persons offering insurance coverage. The commissioner of commerce shall
establish a program to assist licensees in obtaining insurance coverage. The program
shall include a committee appointed by the commissioner of commerce that is repre-
sentative of insurance carriers and producers, liquor vendors, and the public. No less
than one-half of the committee members shall represent casualty insurers and surplus
lines agents or brokers. The commissioner of commerce or the commissioner's desig-
nated representative shall serve as an ex officio member of the committee. The commit-
tee shall review and act upon all properly executed applications. If the committee finds
that it cannot assist in securing insurance coverage, it shall notify the applicant in writ-
ing with a full explanation and recommendation for enhancing its ability to secure
insurance. The commissioner of commerce shall, if necessary, establish an assigned risk
plan pursuant to subdivision 3.
Subd. 3. Assigned risk plan. (a) The purpose of the assigned risk plan is to provide
coverage required by subdivision 1 to persons rejected under this subdivision.
(b) An insurer who offers liquor liability insurance that refuses to write the cover-
age required by subdivision 1 shall furnish the applicant with a written notice of refusal.
The rejected applicant shall file a copy of the notice of refusal with the commissioner
of public safety at the time of application for coverage to the assigned risk plan and the
market assistance program.
A written notice of refusal must be provided to any applicant who has requested
only liquor liability insurance if the insurer chooses to only offer liquor liability insur-
ance in combination with other types of insurance.