3.7 Insurance Renewal
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty November 14, 2022
PRESENTER(s) REVIEWED BY: ITEM #:
Consent 3.7 – Insurance Renewal
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
X Is a strong organization that is committed to leading the community through innovative
communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council elect to not waive the monetary limits on municipal tort
liability established by Minnesota Statute Section 466.04.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:
The City has received the quoted premium from the League of Minnesota Cities for the 2022-2023 liability
insurance package. The total for the coverage period is $169,014 compared to $167,015 for the 2021-2022
coverage period (1.19% increase).
A few highlights of the renewal include:
1) Although property values within the policy increased more than $9.4 million with the construction
of the East WWTF Biosolids Facility and Water Tower 4, the costs decreased $3,400 due to rate
decreases from LMCIT.
2) LMCIT has implemented a new First Party Cyber coverage which provides $250,000 of coverage for
cyber breach response, revenue loss, data restoration and computer equipment replacement,
which increased costs by $3,868.
The summary premium comparison is attached for additional reference of changes within the policy.
Minnesota Statute Section 466.04 references tort liability for political subdivisions. The municipal tort
liability is limited to a maximum of $500,000 per claimant and $1.5 million per occurrence. These limits
apply whether the claim is against the City, against the individual officer or employee, or against both. The
LMCIT liability coverage provides a standard limit of $2 million per occurrence.
At the City’s coverage renewal each year, it must decide whether to waive or not waive the statutory limits.
In the past, the City of Otsego has chosen not to waive these statutory limits on tort liability claims. The
LMCIT assures coverage to the limitations set by the Statute without additional cost to the City.
SUPPORTING DOCUMENTS ATTACHED:
• Premium Comparison
• Liability Coverage Waiver Form
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion that the City of Otsego elects not to waive the monetary limits on municipal tort liability
established by Minnesota Statute Section 466.04 for the September 25, 2022-2023 coverage period.
BUDGET INFORMATION
FUNDING: BUDGETED:
Insurance coverage is allocated to each
fund/department of the City.
Yes