02-27-2023 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: League of Minnesota Cities Information Memo: 6/23/2022 LMCIT Liability Coverage Guide Page 35 Sanitary Sewer Incentive Program. See LMCIT Sanitary Sewer Backup Incentive Questionnaire. To qualify for the sanitary sewer backup incentive, cities must complete a sanitary sewer system questionnaire and return it to LMCIT. If a city can confirm it meets the criteria, it will not be subject to the higher mandatory deductible. A city may certify they meet the criteria at any time. If qualification occurs midterm, LMCIT will issue an endorsement removing the minimum deductible. 2. No-fault sewer backup coverage As an option, no-fault sewer backup coverage is available for members that meet certain underwriting criteria. The optional coverage comes with an additional charge and will reimburse a property owner for cleanup costs and damages resulting from a city sewer backup or from a city water main break, irrespective of whether the backup was caused by city negligence. The no-fault sewer backup coverage option is intended to: • Reduce health hazards by encouraging property owners to cleanup backups as quickly as possible. • Reduce the frequency and severity of sewer backup lawsuits (property owners may be less inclined to sue if they receive conciliatory treatment at the time of the backup). • Give cities a way to address the sticky political problems that can arise when a property owner learns the city and LMCIT won’t reimburse for sewer backup damages because the city wasn’t negligent and therefore not legally liable. The legal basis for this coverage is that it helps reduce health hazards by encouraging prompt cleanups. This is clearly a public purpose and in the public interest. Additionally, the law and facts surrounding most sewer backup claims are rarely clear. There’s virtually always a way that a claimant’s attorney can make some type of argument for city liability. Having this coverage in place should help eliminate the need to spend public funds on litigation costs in many of these cases. Many cities and their citizens may find this coverage option to be a helpful tool. However, it’s also important to realize it’s not a complete solution to sewer backup problems, and not every possible backup will be covered. a. Coverage terms The no-fault coverage will reimburse the property owner for sewer backup damages or water main breaks, regardless of whether the city was legally liable, if the following conditions are met: