HomeMy WebLinkAbout6.d. Accept Tort Liability Insurance LimitsEXECUTIVE SUMMARY
City Council Meeting Date: September 17, 2019
AGENDA ITEM: Accept Tort Liability Insurance Limits AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO. 6.d.
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 $2418. 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 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 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 10/1/19
through 9/30/20.
RECOMMENDATION
Staff recommends City Council adoption of the above motion.
LIABILITY COVERAGE – WAIVER FORM
Members who obtain liability coverage through the League of Minnesota Cities Insurance Trust (LMCIT)
must complete and return this form to LMCIT before the member’s effective date of coverage. Return
completed form to your underwriter or email to pstech@lmc.org.
The decision to waive or not waive the statutory tort limits must be made annually by the
member’s governing body, in consultation with its attorney if necessary.
Members who 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 could recover no more than
$500,000 on any claim to which the statutory tort limits apply. The total all claimants could recover for a single
occurrence to which the statutory tort limits apply would be limited to $1,500,000. These statutory tort limits
would apply regardless of whether the member purchases the optional LMCIT excess liability coverage.
•If the member waives the statutory tort limits and does not purchase excess liability cove rage, a single claimant
could recover up to $2,000,000 for a single occurrence (under the waive option, the tort cap liability limits are
only waived to the extent of the member’s liability coverage limits, and the LMCIT per occurrence limit i s
$2,000,000). The total all claimants could 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 could 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.
LMCIT Member Name: __________________________________________________________________________
Check one:
o The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minn. Stat. §
466.04.
o The member WAIVES the monetary limits on municipal tort liability established by Minn. Stat. § 466.04, to
the extent of the limits of the liability coverage obtained from LMCIT.
Date of member’s governing body meeting: __________________________________________________________
Signature: Position: