HomeMy WebLinkAbout[04c] Tort Limits
Council Agenda Item \[04c\]
MEETING DATE: December 17, 2018
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 right, the maximum an individual
can recover from a single incident is $ 500,000 or $ 1,500,000 for all claimants of the same incident. If
the City waives the monetary limits on tort liability, the maximum recovery an individual can claim is $
2,000,000 per single occurrence. Simply put, this provision limits the exposure of the City for liability
claims. Should the City decide to waive the tort limits, additional premium would be charged and it
would be approximately 3.5% of the total premium, at a cost between $ 2,500 - $ 3,500.
BUDGET/FISCAL IMPACT: Waiving the tort limits would increase the premium.
ATTACHMENTS: Liability Waiver Form
REQUESTED COUNCIL ACTION: Authorize the Administrator to sign the Waiver form indicating that the
City does not waive the tort liability limits.
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LEAGUE OF CONNECTING & INNOVATING
MINNESOTA SINCE 1913
CITIES
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(n,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 coverage, 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 is
$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:
❑ The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minn. Stat. &
466.04.
❑ The member WAIVES the monetary limits on municipal tort liability established by Minn. Stat. S 466.04,to
the extent of the limits of the liability coverage obtained from LMCIT.
Date of member's governing body meeting:
Signature: Position:
145 UNIVERSITY AVE. WEST PHONE:(651)281-1200 FAX:(651)2814299
ST. PAUL, MN 55103-2044 TOLL FREE:(800)925-1122 WEB:WWWLMC.ORG