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If more serious penalties are needed to deter violations,the legislature can increase the penalties. <br /> That makes more sense than using defense costs as a kind of"hidden penalty"which can be wildly <br /> disproportionate to how serious the offense was, and for which are incurred even if there was no <br /> offense. <br /> A private insurance company says that since their liability insurance policy doesn't <br /> exclude OML claims,we don't need a separate OML policy if we bought insurance <br /> from them. Is this true? <br /> Some private insurance companies selling errors and omissions policies have suggested separate <br /> coverage isn't needed because their errors and omissions insurance policy doesn't have a specific <br /> exclusion for OML claims.There are a couple of problems with this approach. <br /> First,an OML charge often does not involve a claim for damages.If you look for coverage under a <br /> liability insurance policy,the problem isn't that it's an excluded claim;the problem is that it's not <br /> a claim for damages at all.Unless there's a claim for damages,there's nothing to trigger coverage <br /> under a liability insurance policy in the first place.Before relying on a private insurer's policy for <br /> this exposure,it would be a good idea to get in writing that the insurer will in fact pay for <br /> defending OML claims even if there isn't a claim for damages. <br /> The second problem is that liability insurance policies <br /> usually give the insurer the right to settle the claim at their (� <br /> discretion. It will often be much cheaper to enter a plea and Your League Resource <br /> pay the$300 penalty,even if the charge really isn't justified, Contact your LMCIT underwriter at <br /> rather than paying thousands of dollars in legal fees to 651-281-1200 or 800-925-1122 for <br /> defend the claim.An insurer covering an OML claim might further information on the OML <br /> very well decide that approach is the most sensible thing, in defense coverage. <br /> the same way insurers sometimes pay questionable damage <br /> claims simply because it's cheaper than defending them. <br /> This may resolve the litigation cheaply,but it may not be the resolution the city official would <br /> prefer. <br /> Pete Tritz 11/09 <br /> 3 <br />