10-25-1993 Council Packet - Laserfiche WebLink

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TO; FROM: DATE; Mayor and City Council October 22, 1993 f. ; s SUBJECT: Spring Park Police Service Contract %■ ‘V ^V The City of Spring Park has approved the city's proposal for the provision of police services for 1994. Spring Park has requested that the city address several contract language issues. These include the hold harmless language and the termination language. The hold harmless language currently calls for Orono to have the primary responsibility in cases of liability claims up to the limit of Orono's insurance coverage. The City of Spring Park then covers any claim beyond the city's insurance. The Spring Park attorney has raised two concerns regarding this language. I;:st, the City of Spring Park should not have unlimited liability beyond its insurance limits. For example, if a claim is beyond the insurance coverage limits of both Orono and Spring Park (both have $2,600,000.00 of liability insurance). Spring Park should not be responsible for the amount beyond the combined coverage. It is staff's recommendation that the probability of a claim exceeding botn limits is so low that Spring Park's liability can be limited to its $2,600,000 of coverage. The second concern is fhat because the contract requires Spring Park to be liable for all claims not covered by Orono's insurance. Spring Park is liable for claims that are excluded from the City's liability coverage. Because Spring Park has the same insurance coverage as Orono, any claims excluded from Orono's coverage would also be excluded from Spring Park's coverage. The City Attorney has indicated that in reviewing the exclusions in the insurance coverage, she has not identified any gaps in coverage that relate to the provision of police services. However, she cautions that when dealing with insurance issues there is always the potential for unanticipated gaps in coverage. The issue to be addressed here is what is the most reasonable way to allocate the responsibility for these types of claims. One perspective is that Spring Park has the primary responsibility of providing police protection to its citizens. This responsibility includes a certain amount of liability risk related to the provision of the service. Spring Park should not be able to eliminate its risk by contracting with a third party to provide police protection. Another perspective is that because Orono is providing the police services and has control over the provision of the services, it is in the best position to prevent incidents or behavior which could create the liability claims. Therefore, Orono as the provider should have the responsibility.