CCP 10-27-2009 - Laserfiche WebLink

Home Browse Search

• Report Number 1rWM01G0HT0N Agenda Section Council Meeting Date the City that works for you REQUEST FOR COUNCIL CONSIDERATION 09-249 VI -5 October 27, 2009 ITEM DESCRIPTION: RESOLUTION MAKING AN ELECTION NOT TO WAIVE THE STATUTORY TORT LIMITS FOR LIABILITY INSURANCE PURPOSES DEPARTMENT HEAD'S APPROVAL: CITY MANAGER'S APPROVAL: No comments to supplement this Recommendation: To waive the reading ELECTION NOT TO WAIVE THE STA INSURANCE PURPOSES Comments attached adopt the RESOLUTION MAKING AN ORY TORT LIMIT FOR LIABILITY Legislative History: The City procures its liability insurance from the League of Minnesota Cities (LMCIT). The LMCIT now requires an annual resolution to be adopted by the City Council making an election to waive or not waive the statutory liability limit. The City Council approved a similar resolution last year. Our insurance agent has told me that very few cities waive the tort limit. The City/Council has made the election NOT to waive each year in at least the past eight years. Financial Impact: There is no financial impact for the non -waiver of the tort liability limit. If the City were to choose the waiver option, the City and the LMCIT no longer could use the statutory limit of $400,000 per claimant as a defense. The City's exposure would be much greater. Since the waiver increases the City's exposure, the liability insurance premium would be about 3.5% higher. Excess liability insurance coverage should be purchased if a waiver was made. The quote for excess liability insurance without a waiver for 2009 was $34,492. Excess liability insurance purchased with a waiver would result in another increase to the liability premium. Explanation: Minnesota Statutes 466.04 currently sets the maximum liability limits for cities at $400,000 per claimant and $1,200,000 per occurrence. The City's current insurance policies provide coverage up to the tort liability limits as provided by Minnesota Statutes. The LMCIT allows the City the option to waive those limits if it chooses to do so. The LMCIT is now requiring cities to make their election with regards to waiving or not waiving its tort liability as established by Minnesota. Statutes 466.04 by resolution. On occasion, some cities may be required by contract to carry higher coverage limits. The City of New Brighton has no such contracts. Sometimes cities choose to carry higher coverage because of concern that the courts might overturn the statutory liability limits. However, the limits have been tested and upheld several times in Minnesota. While it is always possible that a future court might decide to throw out the statutory limits, this is not much of a concern.