11-25-2019 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: League of Minnesota Cities Information Memo: 11/15/2018 LMCIT Liability Coverage Guide Page 6 a. Waiving the statutory limit Members who waive the statutory limits are waiving the protection of the statutory limits, up to the amount of coverage the city has. A claimant could recover up to the LMCIT standard limit of $2 million, rather than the statutory limit of $500,000 per claimant. Because the waiver increases the exposure, the premium is a bit higher for coverage under the waiver option. A city may choose to pay more in premium for the waiver option because the statutory liability limit only applies in cases where the city is in fact liable and the injured party's actual proven damages are greater than the statutory limit. Some cities may want to have more assets available to compensate their citizens for injuries caused by the city's negligence. See section H.D.3, In those cases where the city waives the statutory limit, but also purchases the Purchasing higher liability limits. LMCIT excess liability coverage, a claimant could potentially recover more. If, for example, the city has $1 million of excess coverage and chooses to waive the statutory tort caps, the claimant or claimants could recover up to $3 million in damages in a single occurrence. The cost of the excess liability coverage is higher if the city waives the statutory tort caps. The cost difference is proportionally greater than the cost difference at the primary level because for a city that carries excess coverage, waiving the statutory tort caps increases both the per claimant exposure and the per occurrence exposure. b. Not waiving the statutory limit For cities who choose not to waive the statutory limits, the city's liability is limited by the statute to no more than $500,000 per claimant and $1.5 million See section H.D.3.a, Statutory limits may not per occurrence. LMCIT's higher coverage limits would only come into play apply. on those types of claims that aren't covered by the statutory limit. 3. Purchasing higher liability limits LMCIT makes available the option of carrying higher coverage limits than the basic limit of $2 million per occurrence. The LMCIT excess liability coverage is available in $1 million increments up to a maximum of $5 million. There are several reasons why cities may consider carrying LMCIT's excess liability coverage. a. Statutory limits may not apply Minn. stat. § 3.736. The statutory tort caps do not or may not apply for the following types of claims: League of Minnesota Cities Information Memo: 11/15/2018 LMCIT Liability Coverage Guide Page 6