CR 04-063 Renewal Insurance
CITY Or::
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April 15,2004 Council Report 04-063
HOPKINS
AUTHORIZE RENEWAL OF THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST
. Prollosed Action POLICY
Staff recommends adoption of the following: Move to renew the League of Minnesota Cities Insurance
Trust policy and continue to waive the statutory tort liability limits to the extent of the coverage
purchased.
Adoption of this motion wi Ii result in staff moving forward with the proposed insurance coverage,
excluding medical payments coverage.
Ovcl-view
As of January 1,2004, the statutory municipal t0l11iability limits continue to be $300,000 per claimant,
$ LOOO.OOO per occurrence. The statutory tort liability limit of $1 ,000,000 is the same as last year. The
$300,000 per claimant liability is currently waived. The city council must make the decision to not waive the
tort liability limit.
The cities insurance premium will increase approximately $5,000 or 3.2% over last years premium for a total
of $ 158,000. The primary reason for the increase is the result of higher propel1y values. General liability
rates dropped 6.5% over last year. The rates reflect lower overall operating expenditures in 2004, which is
partially how the general liability rate is determined. Finance continues to recommend the deductible amOlmt
of $20,000/$40,000 with $1,000 per occurrence after reaching the maximum of $40,000. The current amount
available in the insurance risk fund to cover deductible costs is $85,000,
. Primary Issues to Consider
· The City of Hopkins currently waives the statutory t0l11imits ;md does not purchase excess liability
coverage. A single claimant could potentially recover up to $1,000,000 on a single occurrence. The total
which all claimants would be able to recover for a single occurrence to which the statutory tort limits
apply is also limited to $1,000,000, regardless of the number of claimants. The cost of waiving the
statutory tort limit is approximately $3,300 and is already included in the cities annual premium amount.
. If the City of IIopkins does not waive the statutory tort limits, an individual claimant would be able to
recover no more than $300,000 on any claim to which the statutory tort limits apply. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply, \vould
be limited to $ 1,000,000. These statutory tort limits apply regardless of whether or not the city purchases
optional excess liability coverage.
Staff Recommendation
Finance rewmmends renewal of the policy. excluding medical payments coverage and waiving of the
monetary limits on the tort liability established by Mirmesota Statutes 466.04, to the extent of the limits of the
liability coverage obtained from LMCIT.
SUllllortinJ?; Information
, LMCIT Waiver Form
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. LOl"i Yager r--
Finance Director
IFinancial Impact: (approximately) $158.000 Budgeted: Yes Source: All funds
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\APR,14,2004 - 8:31AM - ~ - -. ARTHUR J GALLAGHER NO, 869
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Market Premium Summary
Coverages Expiring Company 1 Company 2 Com pany 3
Property $25,338 $32,225
Boiler & Machinery 3,761 5,630
Inland Marine 3,012 3,9SS
Employee Dishonesty 1,060 884
General Liability 83,747 78,300
No Fault Sewer
Commercial Auto 31,930 32,552
, Subtotal $148,848 $153,560 $0 $0
Worker's Compensation
Volunteer AD&D 375 375
. Petrofund 368 328
Open Meeting Law 1,710 1,388
Facultative Reinsurance 21069 2,586
Grand Total $153,370 $158,237 SO ,$0
Notes and highlights:
1. Payment Plan: Direct Bill and Volunteer AD&D Coverage, Agency Bill
2. Carriers
IZI Admitted
IZl Nonadmitted
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LMCIT LIABIL TIY COVERAGE - WAIVER FORM
. Cities obtaining liability coverage from the League of Minnesota Cities Insurance Trust must decide
whether or not to waive the statutory tort liability limits to the extent of the coverage purchased, The
decision to waive or not to waive the statutory limits has the following effects.
> If the city does not waive the statutOlY tort limits, an individual claimant would be able to recover
no more than $300,000 on any claim to which the statutory tort limits apply. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply
would be limited to $1,000,000. These statutory tort limits would apply regardless of whether or not the
city purchases the optional excess liability coverage,
> If the city waives the statutory tort limits and does not purchase excess liability coverage, a single
claimant could potentially recover up to $1,000,000 on a single occurrence. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply
would also be limited to $1,000,000, regardless of the number of claimants.
> If the city waives the statutory tort limits and purchases excess liability coverage, a single claimant
could potentially recover an amount up to the limit of the coverage purchased. The total which all
claimants would be able to recover for a single occurrence to which the statutory tort limits apply would
also be limited to the amount of coverage purchased, regardless of the number of claimants.
Claims to which the st~~to1')' m~cipal tort limits do not apply are not affected by this decision,
The decision must be made by the city counciL Cities purchasing coverage must complete and return
. this form to the LMCIT before the effective date of the coverage. For further information, contact
LMCIT. You may also wish to discuss these issues with your city attorney.
The City of Hopkins accepts liability coverage limits of $ 1 ,000,000
from the League of Minnesota Cities Insurance Trust (LMCIT).
Check one:
The city DOES NOT WAIVE the monetary limits on municipal tort liability established
by Minnesota Statutes 466.04.
XX The city WAIVES the monetary limits on tort liability established by Minnesota Statutes
466.04, to the extent of the limits of the liability coverage obtained from LMCIT.
Date of city council meeting
Signature Position
Return this completedji-om to LMCIT, 145 University Ave, w., St, PaullvfN 55103-2044
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