3.5 LMCIT Insurance Renewal
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty August 26, 2024
PRESENTER(s) REVIEWED BY: ITEM #:
Consent 3.5 – 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 approve the renewal of the City’s property/casualty coverage.
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 2024-2025 liability insurance
package. The total for the coverage period is $213,963 compared to $199,253 for the 2023-2024 coverage period (7.38%
increase).
A few notable reasons for the increase include:
1) Property Coverage increased $9,944 (9.75%) based on increased property valuations due to inflationary factors
and for additional property improvements such as the West WWTF Facility Expansion. The City’s property was
also subject to appraisal for this renewal period, which is a routine requirement from LMCIT, and was last done in
2017.
2) Automobile Coverage increased $2,848 (16.73%) based on additional insured vehicles and rate increase from
LMCIT for physical damage and liability coverages for automobiles.
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:
• Liability Coverage Waiver Form
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to authorize the City Administrator/Finance Director to accept the property/casualty coverage offered from
LMCIT and 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, 2024-2025 coverage period.
BUDGET INFORMATION
FUNDING: BUDGETED:
Insurance coverage is allocated to each
fund/department of the City.
Yes
League of Minnesota Cities 3/2/2023
Liability Coverage Waiver Form Page 1
LIABILITY COVERAGE WAIVER FORM
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 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. 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. § 466.04, to the
extent of the limits of the liability coverage obtained from LMCIT.
Date of member’s governing body meeting:___________________________________________________________
Signature: _____________________________________________________________________________________
Position: _______________________________________________________________________________________
Members who obtain liability coverage through the League of Minnesota Cities Insurance Trust
(LMCIT) must complete and return this form to LMCIT before their effective date of coverage.
Email completed form to your city’s underwriter, to pstech@lmc.org, or fax to 651.281.1298.