HomeMy WebLinkAbout5.F.3. Property/Liability Insurance Renewal(�S)�'�
CITY OF SHAKOPEE
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Julie A. Linnihan, Finance Director
RE: 2011/12 Property /Liability Insurance Renewals- League of Minnesota Cities Insurance Trust (LMCIT)
DATE: July 6, 2011
Introduction
The League of Minnesota Cities Insurance Trust (LMCIT) serves over 1,100 members for property, liability,
workers' compensation insurance and benefit needs. The City of Shakopee has been affiliated with the LMCIT
program to ensure continuous, consistent insurance coverage since 1987, and annually works with the LMCIT
and the local agent to update and renew the existing policies. It is important to note that the LMCIT program
provides members with a dividend plan. Shakopee received a dividend of $73,370 in 2010. The average
dividend to the City during the years of LMCIT participation has been 20 % of the premium rate.
Background
Renewal
Attached is a list of property /liability insurance premiums for the renewal of the present coverage,
(which reflects updated property, equipment, liability and vehicles schedules) with the League of
Minnesota Cities insurance Trust (LMCIT). The policy period is July 31, 2011 to July 31, 2012.
Basic Policy
The policies proposed provide comprehensive coverage that may be specific and unique to the LMCIT
plan. These include coverage for Open Meeting Law, police and firefighters professional, public
officials errors and omissions and cyber protection coverage to name a few. The premium rates have
decreased from the prior year. The total deposit premium has decreased from $493,957 to $445,907,
a decrease of $48,OSO. This annual premium provides coverage for the City, Shakopee Public Utilities
(SPUC) and EDA. This decrease is a result of the application of the decreased experience rating
modifier, which allows for a positive loss experience history for the City of Shakopee.
Optional Coverage
Optional coverage options are available to municipalities, on a case by case and as needed review.
The city budget for 2012 will provide for the revised rates for insurance (not counting employee
group or work comp. insurance) and deductibles across all funds, excluding SPUC. SPUC's share of
the deposit premium is roughly 28 % of the total and the City's is 72 %. City staff, SPUC staff and
the agent of record will be meeting to review and confirm the allocation of the costs for the
upcoming premium year. The City bills SPLIC annually for their portion of the coverage cost.
Waiver of Tort Liability
One of the items for the renewal of the property /liability insurance is to not waive the monetary limits on
municipal tort liability. Council previously has not waived the monetary limits on tort liability established by
Minnesota Statutes 466.04 and the renewal was processed accordingly and is reflected in the pricing of this
coverage. The current liability limit is $500,000 maximum for a single claimant for an occurrence with a
$1,500,000 maximum for all claimants for a single occurrence. A separate document electing this waiver is
submitted to the LMCIT with annual renewal.
Umbrella liability coverage
Council added excess liability coverage in 2007. There are some liability claims that may be brought to
which the statutory limits do not apply —( employment claims are an example of situations not covered by
the immunity limit and extension of coverage to additional insured parties under the city policy may not be
within the immunity limits). Examples of claims not subject to tort would be breach of contract, eminent
domain and Federal claims based on Federal statute of constitution. The premium for excess liability
coverage is $47,496, in comparison to $57,559 in the prior year, for one million dollars of coverage
(included).
Action Recommended
Move to accept the property /liability insurance renewals from the League of Minnesota Cities Insurance
Trust for a deposit premium of $445,907.
Staff also recommends that the City not waive the monetary limits on tort liability established by
Minnesota Statutes 466.04.
CONNECTING &INNOVATING
SINCE 1913
July 13,2011
Capesius Agency Inc.
1240 East Third Avenue
PO Box 97
Shakopee, MN 55379 -2135
Covered Party: City of Shakopee
Effective Date: 07/31/11
RENEWAL PREMIUM SUMMARY
Common Coverages
Coverage
Deductible Premium
• Property
$2,500.
$152,088.
• Mobile Property
2,500.
13,229.
• Municipal Liability
2,500.
163,505.
• Automobile Liability
2,500.
19,014.
• UM/UIM $200,000 all covered autos
2,500.
1,499.
• Basic Economic Loss Benefits (PIP) all covered autos
2,500.
Included.
• Automobile Physical Damage
2,500.
33,002.
• Crime
2,500.
Included.
• Petrofund
NA
Included.
• Open Meeting Law
NA
Included.
a ST �C 2a.r 5 ✓hc -
Experience Rating Modifier;
.765 l
(Applied to Municipal Liability, Auto Liability, and UM/UIM) The modifier is calculated with a formula which compares
the city's actual toss history with the amount of losses that would be expected for a city of that size if the city were n perfectly
average
LMCrr member. If the city's losses and expenses are better than average the
city receives a premium credit. tribe city's losses and
expenses are worse than average, the city receives a premium debiL
Optional Coverages
Coverage Deductible Premium
• Bond 2,500. 1,667.
• Equipment Breakdown 2,500. 14,407.
is Excess Liability Limit: $ 1,000,000 NA 47,496.
• Liquor Liability Limit: $ NA Not Covered.
• Fireworks Not Covered.
• No Fault Sewer Back Up Limit: $ Not Covered.
• Airport Liability Not Covered.
TOTAL $ 445,907.
DO NOT PAY UNTIL YOU RECEIVE INVOICES
TORT LIMIT $500,000./$1,500,000.
LEAGUE OF MINNESOTA CITIES
INSURANCE TRUST
145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 PAX; (651) 281 -1298
ST. PAUL. MN 55103.2044 TOLL FREE: (800) 925 -1122 WEB: W W W.LMC.ORC
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Comments: Subject to a signed and dated Waiver Election Form.
Optional Coverage Quotes
Coverage Deductible Premium
• No Optional Coverage Quotes Requested
Optional coverage(s) are not bound unless the covered party has requested that coverage be
bound and LMCTT has sent a written confirmation. Optional coverage quotes are valid for
30 days after the date of this letter.
Sincerely,
Underwriter
7Z
PREMSUMXM(I l /10)
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