HomeMy WebLinkAbout6.f. Tort Liability Limits
EXECUTIVE SUMMARY
City Council Regular Meeting: September 21, 2021
AGENDA ITEM: Tort Liability Insurance Limits AGENDA SECTION:
Consent
PREPARED BY: Teah Malecha, Finance Director AGENDA NO. 6.f.
ATTACHMENTS: LMCIT Liability Coverage – Waiver Form APPROVED BY: LJM
RECOMMENDED ACTION: Motion to not waive the monetary limits on municipal tort
liability established by Minnesota Statute § 466.04
BACKGROUND
Each year when the City renews its property and liability insurance policy with the League of Minnesota
Cities Insurance Trust (LMCIT), it must decide whether to waive the statutory tort liability limits.
Minnesota Statute limits the City’s liability to no more than $500,000 per claimant with a maximum of
$1,500,000 per occurrence.
The LMCIT provides cities with the option to structure their liability coverage by choosing whether to
waive the statutory tort limits provided by Minnesota Statute § 466.04. If the City waives the limits, a
claimant could recover up to $2,000,000 for a single occurrence.
According to LMCIT, 85 percent of cities do not waive the tort liability limits. It is the recommendation of
our insurance agent, First National Insurance, to not waive the limits.
RECOMMENDATION
Staff recommends approving the recommendation not to waive the monetary limits on municipal tort
liability established by Minnesota Statute § 466.04.
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 occ urrence 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.
LMCIT Member Name
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
Signature Position
City of Rosemount
September 21, 2021