HomeMy WebLinkAbout4.F.3. LMCIT Liability Coverage Waiver for Liability Insurance Renewal Li. F..3
City of Shakopee
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Memorandum
To: Mayor and City Council
Mark McNeill, City Administrator
From: Julie A. Linnihan, Finance Director
Subject: LMCIT Liability Coverage Waiver
Date: July 2, 2012
Introduction:
Annually the City of Shakopee renews the property and liability insurance coverage through the League
of Minnesota Cities Insurance Trust (LMCIT). A component of this renewal is the decision to waive or not
waive the statutory tort liability limits, which is brought before City Council for determination.
Background:
City staff is currently preparing the information for the 2012 -2013 renewal. The waiver document will be
submitted with the annual application, to obtain the premium determination.
If the City 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 which all claimants
would be able to recover for a single occurrence would be limited to $1,500,000.
If the City waives the statutory tort limits and does not purchase excess liability coverage, a single
claimant could potentially recover up to $1,500,000 on a single occurrence.
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 purchased.
Council has historically not waived the monetary limits on tort liability, which allows for a current
liability limit of $500,000 maximum for a single claimant, with a $1,500,000 maximum for all claimants
for a single occurrence.
Recommendation:
Staff recommends the City not waive the monetary limits on tort liability, as established by Minnesota
Statute 466.04
Relationship to Visioning:
This supports Goal F — Housekeeping
Action Required:
If the Council concurs, approval is requested to not waive the monetary limits on the tort liability for the
upcoming Property and Liability insurance renewal.
SECTION I: 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:
If the city 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 which 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 would apply regardless of whether or not the city
purchases the optional excess liability coverage.
If the city waives the statutory tort limits and does not purchase excess liability coverage, a single
claimant could potentially recover up to $1,500,000. on a single occurrence. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would
also be limited to $1,500,000., regardless of the number of claimants.
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 purchased. The total which 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.
This decision must be made by the city council. Cities purchasing coverage must complete and
return this form to LMCIT before the effective date of the coverage. For further information, contact
LMCIT. You may also wish to discuss these issues with your city attorney.
accepts liability coverage limits of $ from the League of
Minnesota Cities Insurance Trust (LMCIT).
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 tort liability established by Minnesota Statutes 466.04,
to the extent of the limits of the liability coverage obtained from LMCIT.
Date of city council meeting
Signature Position
Return this completed form to LMCIT, 145 University Ave. W., St. Pau/, MN. 55103 -2044