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MEETING DATE: December 18, 2007
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Council Agenda Item ~ ~ `
AGENDA ITEM: Liability Insurance -Requested Action: Authorize the
Administrator to execute the LMCIT Liability Coverage Waiver Form, verifying that the City does not
waive the monetary limits on tort liability.
SUBMITTED BY:
Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION:
PREVIOUS COUNCIL ACTION: Annually the Council must determine if the City waives the tort limits for
liability insurance. Each year the City has reviewed the provision and opted to not waive the monetary
limits.
BACKGROUND INFORMATION: The tort limits establish the maximum amount that an individual can try
and recover through a liability claim. If the City does not waive the rights, the maximum an individual
can recover from a single incident is $ 300,000 or $ 1,200,000 for all claimants of a same incident. If the
City waives the monetary limits on tort liability, the maximum recovery an individual can claim is $
1,200,000 per single occurrence. Simply put, this provision limits the amount the City can be sued for a
single event. Waiving the monetary limits would add additional premium an allow individuals to sue for
a larger amount.
BUDGET/FISCAL IMPACT: If the City waives the limits, an additional premium of 3.5% of the
Liability Premium will be charged. ($ 1,000 to $ 1,500)
ATTACHMENTS: Liability waiver form
REQUESTED COUNCIL ACTION: Authorize the Administrator to sign the Waiver form indicating the City
does not waive the tort limits.
SECTION 1: 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:
o If the city does not waive the statutory tort limits, an individual claimant would be able to recover no more than
$ 400,000 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 $ 1,200,000. These
statutory tort limits would apply regardless of whether or not the city purchases the optional excess liability
coverage.
o If the city waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could
potentially recover up to $ 1,200,000 on a single occurrence. The total which all claimants would be able to
recover for single occurrence to which the statutory tort limits apply would also be limited to $ 1,200,000,
regardless of the number of claimants.
o 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 purchases. The total which all claimants would be
able to recover for a single occurrence to which the statutory 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.
The decision must be made by the City Council. Cities purchasing coverage must complete and return this form to
LCMIT before the effective date of coverage. For further information contact LCMIT. You may also wish to discuss
these issues with your City Attorney.
accepts liability coverage limits of $ form the League of Minnesota
Cities Insurance Trust (LCMIT).
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 municipal tort liability established by Minnesota Statutes 466.04, to
the extent of the limits of the liability coverage obtained from LCMIT.
Date of City Council Meeting December 18.2008
Signature
Position Administrator
Return this completed form to LMCIT, 145 University Avenue W., St. Paul MN 55103-2044