ITEM 3.5 Liability CoverageOtkzoF
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Administration
Adam Flaherty, Finance Director
October 10, 2016
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent Agenda
City Administrator Johnson
3.5
AGENDA ITEM DETAILS
RECOMMENDATION:
It is recommended by staff that the City Council adopt a motion electing 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:
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: It ATTACHED NONE
-Liability Coverage — Waiver Form
-Summary of LMCIT Liability Coverage Options
POSSIBLE MOTION
-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, 2016-2017 coverage period.
BUDGET INFORMATION
FUNDING: BUDGETED:
n/a n/a
PLEAOTA
CITIES
CONNECTING & INNOVATING
SINCE 1913
LIABILITY COVERAGE - WAIVER FORM
LMCIT members purchasing coverage must complete and return this form to LMCIT before the effective date of
the coverage. Please return the completed form to your underwriter or email to pstech@lmc.org
This decision must be made by the member's governing body every year. You may also wish to discuss these issues with
your attorney.
League of Minnesota Cities Insurance Trust (LMCIT) members that 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 would be able to recover no more than
$500,000 on any claim to which the statutory tort limits apply. The total 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
apply regardless of whether the city purchases the optional excess liability coverage.
If the member waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could
potentially recover up to $2,000,000 for a single occurrence. (Under this option, the tort cap liability limits are waived to
the extent of the member's liability coverage limits, and the LMCIT per occurrence limit is $2 million.) The total all
claimants would be able to 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 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.
LMCIT Member Name
Check one:
❑ The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minnesota Statutes,
Section 466.04.
❑ The member WAIVES the monetary limits on municipal tort liability established by Minnesota Statutes, Section
466.04 to the extent of the limits of the liability coverage obtained from LMCIT.
Date of city council/governing body meeting
Signature
145 UN IVE RS ITY AVE. WEST
ST. PAUL, MN 55103-2044
Positio
PHONE: (651) 281-1200 FAx: (651) 281-1299
TOLL FREE: (800) 925-1122 WEB:WWW.LMC.ORG
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