HomeMy WebLinkAbout6.h. Accept Tort Liability Insurance Limits
EXECUTIVE SUMMARY
City Council Meeting Date: September 18, 2018
AGENDA ITEM: Accept Tort Liability Insurance Limits AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO. 6.h.
ATTACHMENTS: Discussion Letter from Jeff Isenberg,
Risk Management Consultant; LMCIT
Liability Coverage – Waiver Form
APPROVED BY: LJM
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
Approve the 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 $2,000,000 / $2,000,000 limit. Last year the
premium for the additional coverage was $2443. 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
waiving, the logic 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 we will return to the LMCIT for the institution of this
coverage. Also attached is a letter from Jeffrey Isenberg, our risk management consultant, which discusses
issues related to this liability coverage for the Council to consider. If the Council agrees to continue
waiving the tort liability limits, the waiver form must be signed to indicate the selection to increase the
coverage to $2,000,000 / $2,000,000 for the plan year 10/1/18 through 9/30/19.
RECOMMENDATION
Recommend the above motion.
LIABILITY COVERAGE – WAIVER FORM
LMCIT members purchasing coverage must complete and return this form to LMCIT before the effective date of
the coverage. Please return the completed form to your underwriter or email to pstech@lmc.org
This decision must be made by the member’s governing body every year. You may also wish to discuss these issues with
your attorney.
League of Minnesota Cities Insurance Trust (LMCIT) members that obtain liability coverage from LMCIT must decide
whether to waive the statutory tort liability limits to the extent of the coverage purchased. The decision has the following
effects:
If the member 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 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
apply regardless of whether the city purchases the optional excess liability coverage.
If the member waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could
potentially recover up to $2,000,000 for a single occurrence. (Under this option, the tort cap liability limits are waived to
the extent of the member’s liability coverage limits, and the LMCIT per occurrence limit is $2 million.) The total all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited
to $2,000,000, regardless of the number of claimants.
If the member 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 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.
City of Rosemount
Check one:
The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minnesota Statutes,
Section 466.04.
The member WAIVES the monetary limits on municipal tort liability established by Minnesota Statutes, Section
466.04 to the extent of the limits of the liability coverage obtained from LMCIT.
Date of city council/governing body meeting September 18, 2018
Signature Position Mayor