HomeMy WebLinkAbout[04e] Liability Insurance
Council Agenda Item 4e
MEETING DATE: December 16, 2019
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. The provision limits the exposure of the City for liability
claims.
BUDGET/FISCAL IMPACT: Waiving the tort limits would increase the premium.
ATTACHMENTS: Liability Waiver Form
REQUESTED COUNCIL ACTION: Authorize the Administrator to execute the Liability Coverage –
Waiver Form indicating that the City does not waive the tort liability limits.
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LMC MENNESOTA
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(a�lmc.org.
The decision to waive or not waive the statutory tort limits must be made annually by the
membe�'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.
IEAGUE O� MINNESOTA CITIES 145 University Avenue West €���. (651) 281-1200 �;� (651) 281-1298
INSURANCE TRUST St. Paul, Minnesota 55103 ��a (800)925-1122 www.imc.org
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. §
466.04,to the extent of the limits of the liability coverage obtained from LMCIT.
Date of inember's governing body meeting:
Signature: Position:
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