Memo - No-Fault Sewer Backup Coverage
CITY OF HOPKINS
MEMORANDUM
Date: February 2, 2005
To: Mayor & Council Members 1\ J.k'
From: Christine Harkess, Finance Director Ci\' .
Re: No-Fault Sewer Backup Coverage
In light of the recent sewer backup issues we experienced in January and the losses experienced
by Hopkins homeowners, I explored the option of acquiring sewer backup insurance and the
premium cost to the city.
The following information is a result of that research:
. There are currently 50 cities that have this insurance with the LMCIT
. The underwriting criteria is very stringent - per our insurance agent
. We must own a Jet Vac or jetter vehicle (which we do)
. Premium cost is 8.5% of our liability premium or approximately $6,700.
. We have approximately 3,000 customers; therefore our cost per customer would
be about $2.23 or 18.75~ per month.
I reviewed the No-Fault Sewer Backup Coverage application with Mike Lauseng, Water/Sewer
Superintendent and he stated that we are doing everything on the application (copy enclosed with
his responses). In the event we decide to purchase this insurance we will have to provide
documentation to the underwriters, however Mike did not feel that would be a problem.
Coveraee Overview
As one of the memo's states, the coverage includes the cost of replacing and repairing damaged
property resulting from a sewer backup, as well as the clean-up and disinfection costs.
Attached are the details of the Comprehensive Municipal Coverage, No-Fault Sewer Backup
Coverage Endorsement. It basically states that all four conditions must be met in order for
LMCIT to pay a claim.
. The sewer backup resulted from a condition in the city's sewer system
. The sewer backup was not the result of an obstruction or other condition in sewer
pipes or lines which are not part of the city's sewer system or which are not
owned or maintained by the city.
. The sewer backup was not caused by or related to a catastrophic incident.
. The date of the occurrence giving rise to the claim for damages must be on or
after the retroactive date shown on the endorsement.
The policy does not pay for damages covered under a National Flood Insurance Program or for
which the property owner has been reimbursed or is eligible to be reimbursed by any
homeowner's or other property insurance.
Action Steps
Determine if we would like to pursue this coverage
. Determine method of payment for the premium - Options are:
o Have the sewer fund absorb the premium cost
o Add an amount on the bill as a per customer charge for sewer backup
coverage - ie: $2.25 per year or 18-20~ per month.
. Apply for the coverage and go through the underwriting process
. Pass a resolution establishing limited sewer backup, clean up and property
damage protection.
. Inform the public via the city's web site, newsletter and press releases that we
have obtained this coverage and detailing what it does and does not cover.
. Ifwe don't have one, develop a sanitary sewer maintenance policy. The LMC has
provided me with a model policy - not attached.
No-Fault Sewer Backup coverage
Page 1 of2
,.
r;-~'{'.........-.. ,
J t......$Y'i...._
'1 ...~"...,
! - L' "...( /l"';;'-"';'
\ .I.....'F~>I ';: .
(_ Ill:", I\'~_"."
,. ..- 'l1" . "'-'
I '\
\ \1
':n'::.;::iI':.:l
lMCIT
League of Minnesota
Cities Insurance Trust
" .' "-
~, < ,',,~'~) ;.: ;':> ~,:'" ~"; ~
\"" "
., ,
/ ' -
'A _,
, , . v~ l , "
".".',:' ':..,,",(".:;,
"fr - ~.. ' ::,. ,
',',~ . 2. ',}
".'; ,'..'."
ISearch Tools
..B
No-Fault Se\AJer Backup Coverage
! ~.,~: ,:r l~ ~:' .j l~}~
The new No-Fault Sewer Backup coverage is an extra-cost
option to LMCIT Property/Casualty members that may help cities
protect homeowners from the damages of a backup that occurs at
, no fault of the city or homeowner. The coverage includes the cost
of replacing and repairing damaged property resulting from a
sewer backup, as well as clean-up and disinfection cost.
,r~;~ ;,~;~~'~~'~::,~:.:;; ':~':
..., -'1 .. "
,J' ",'J!.~
: ~ ';, l'~-':. .~ HI:':'::'
; :}''/!.::-It=;!{:4
~'l.'''.~~-A t,J....~
To qualify for this coverage, cities need to have an appropriate
program for regular inspection and maintenance of their sewers.
City's claim history will also be reviewed to detennine eligibility.
h.C ,;;~-i:...~'
~'~!"~l~~ l~. [ ::~;'
\;~.~A;<; ,.A~,~;: ~~~r
:"'1.:: .:':, l<..... i~.-:il.'j' :'~,.:
LMCIT recommends that cities obtaining No-Fault sewer backup
coverage pass a resolution (sample resolution) and communicate
with residents regarding what they can expect from this new
coverage (tips on how to communicate this development to
your citizens.)
~ r.~~) ~~.{r.) ;i.:; ",?:f
I /~::::::l :jr::;[{J~,:l
~~r.;~ j'i':t:~ r'.':~l~"'~f.~)
1~'~f~,~r}:"fll'~~ '::1:.j:~:~
:~:.~. .~! :;.~ j/i, . j. ~:i
If you have any questions about this new coverage, please contact
Pete Tritz or your LMCIT underwritter.
._~;s
Claims Reporting I Employee Benefits
Property Casualty I Workers' Compensation
Loss Control I LMCIT Library
Conference Registration
City Resources I Legislative I LMCIT I HR I Library
Conferences I Publications I Other Services
Home I Site Features & Tips I Web Site Policy I Site Search
LMC Staff I What We Do I Press Room
Sponsorship & Advertising Opportunities I Cities Vendor Guide I Links
Copyright rQ2005 League of Minnesota Oties
145 University Ave. West, St. Paul, MN 55103
Phone:651-281-1200 I Toll Free: 1-800-925-1122
Fax: 651-281-12991 TDD: 651-281-1290
Comments about the Site? Contact the Wehmaster
/"":,,,,, ~~' ,~(
';'CA~riSi..q{'
,J ,:-,,'
',~ ':;~!:!Jf~~:
Sjr:.v, '
:~..:..::','r.,.. ~ '
http://www .1mnc.org/lmcit/ sewer .cfm
2/2/2005
COMPREHENSIVE MUNICIPAL COVERAGE
No-Fault Sewer Back-up Coverage Endorsement
1. Section I, Coverage A, Municipal Liability Coverage, is amended to include no-fault
sewer back-up coverage as outlined below.
SAMPLE ONLY
2. No-fault sewer back-up coverage
a. If all of the following four conditions' are met, LMCIT will pay for claims presented
by the city for sewer back-up damage to property of others which were not
caused by city negligence:
(1) The sewer back-up resulted from a condition in the city's sewer system;
2:J
z
o
u~
0-
~
en
,
(~- ~
(2) The sewer back-up was not the result of an obstruction or other condition in
sewer pipes or lines which are not part of the city's sewer system or which
are not owned or maintained by the city; and
(3) The sewer back-up was not caused by or related to a catastrophic incident.
(4) The date of the occurrence giving rise to the claim for damages must be on or
after the retroactive date shown on this endorsement
b. However, LMC/T will not pay for any damages or expenses:
(1) Which are or would be covered under a National Flood Insurance Program
flood insurance policy, whether or not such insurance is in effect; or
(2) For which the properly owner has been reimbursed or is eligible to be
reimbursed by any homeowners' or other property insurance.
3. Definitions &
For purposes of this endorsement. [he foiiowing definitions app,yi4MPLE ON/.
a. Catastrophic incident means any of the following: Y
(1) Any weather-related or other event for which FEMA (Federal Emergency
Management Administration) assistance is available;
(2) Any interruption in the electric power supply to the city's sewer system or to
any city sewer Iirt station which continues for more than 72 hours; or
LMCIT
ME077(11/00)(Rev. 1 '1/02)
Page 1 of 2
?:1
:2:
o
IlU
~
~
~
(3) Rainfall of precipitation which exceeds the amount determined by the
National Weather Service to constitute a 1 DO-year storm event
b. Sewer back-up damage means
(1) Damage to property; and
SAMPLE ONLY
(2) Removal and clean-up costs,
4. Annual limit
LMCITwill not pay more than $10,000. for sewer back-up damage to any building
under this endorsement, regardless of the number of occurrences or the number of
claimants. For purposes of this limit, a structure or group of structures served by a
single connection to the ci~y's sewer system is considered a single building.
5. Deductibles
The amount LMCIT pays for sewer back-up damages under this endorsement is
subject to the Municipal Liability Deductible shown in the Municipal Liability
Declarations or the General Annual Aggregate Deductibfe if any shown in the
Common Coverage Dedarations.
For purposes of the Municipal Liability Deductible, all claims for sewer back-up
damages which are covered under this endorsement, which occur within a 72 hour
period, and which result from or are related to the same condition or conditions in
the city's sewer system are deemed to be a single occurrence
6. Retroactive Date
The retroactive date for this endorsement is April 06, 2001.
All other terms and conditions remain unchanged.
SAMPLE ONLY
LMC1T
ME077( 11 /OO)(Rev. 11102)
Page 2 of 2
LE1\GUE OF M INNgSO IA en IES INSURANCE lRllST
NO FAULT SEWE.R BACK-UP COVEHACI<: AP]'LICATION
A 1'1'L1CAN r:
i\GI~Nn; NAMIC:
T ELF-PHONE NIJM BER: 1)52-()4.:j-SilIlS
A ,J C;llll:l!!her of MN, In('.
71l2:; W:t~hinl.!tnll Avenue Suuth, Suitt' ](10, Minnr.llllulis MN 5543<)
1. Inspcclinn and mainlenance plllglmn
J )m~s the cily have 311 inSlx'c[ion and Jl\3inl.:n,1Ile:t~ prog,!'i1Ill'! p.<(YI'.S I I No I'h:as(.', (kscrih~, hl'i..:ny or ltllach fl
copy ot 111<' pror.ll\ll1.
bJet~ iii 4,,,tk_~M/tt1r ~~h..~1C_!Jf~;rP{j&::f~e..
1J~Lk*-p~.~~ 15 tJ:1~()!(td# f4-~i-:t.J~i."-[!;;&;~:~
2 Prohlem arc,\ Ic!cnl.ilic:alitJI1 plC)t~.:d\ll't~s
) )oc~ the cily have: in plm~e prol'l'dun~s Jor idl'1I1 ilying and ubatjn~ 1'1 c\bklll llrC".,1S illl'hc ~'y~fcll1 tllll! may I ~'l\l ire
More: frc,!Ilt:l1t insp(.'I'.1'iml or dcaning? 1)4' Y '-'s r 1 Nt) Plcll,~e dt:s(:rihl~ hI kJly
,__/iJ~/lJ1MAl?~- ~-jt/e ~~-t/JY) ki/ u.- eAt/~ ~ HftiJ-.j.
~~.f~~ ) ~t'Z-, ~ .lfhi#l-Ir::,:;~. ~ ~ ~~/lrJ~e -
Wife-/- f4 4n)1U,~--ID 5~--TP71li;Zt.:/S I~f"tli~-?,t' /:''1.uO I!j.~,/I?
(i;cegC-C::"'-:::' ~
,\ ElIll'rgc:'Jl(~Y Il~Sp01\SC syslmll
fhw!> th(~ roily have: n pro(:NllllC foJ' pI ovirlinr, 24-hollrn day emcrgency rl'~pon~" to sewer n:lck-lIps'l
~ Yl~S r I No rk~asc (k~crihe hridly iJ.
~f##!;:I-~:t/~~?.J::pZ-.7:~I~
4. lni~()w 1lI1c1lnfil1ralion I'roCL"dlll'l.S (S1nfl~ w;\il'r gellin~ info lh" Sunil<ll)' Sl'WI.W SYSh..'ll)
~)O 's the dly have an active plan In JlIinilTliZl~ lhe dl..'cl of S(01111 waleI' gclliug into thc s;milmy ~c:wcr sysh,n'!
Yes I J No P1r.US(: dc.~('ribe bric1ly.
... ~ :::tI'71,tf~4o ..rl.!:!. .117 .~-h~e:€.f-_~r/1~t:# 1j~~/t~
~j1t1? l> 19Ij,{ -~LL("'".-r:.-:=I---"'~:J-t..>'l.~ . ",.. . /."7 ~- ,4J~ . ~._l~:J ,-J.:{ f.frl;' " -I,Ll-
, ......1.,....::l,..I"*"",l"'..-II.<Vr-r-::;, Out.tt..,.{/f' I..:..k;" SId" 7; ~/I"f"""Cr
.. 'IIi-h.A.'\. ~ti,tfJ" . AlI.:;e~~'4 .x'~'A' -..-------- 6" . . __lL_'?:!t___. .
f'/ko""'f t .l~'J 'fi '",.. If,.oll;o,,'''''rl~~'i'7I''-'o:;''. '--T-
I Melli\ PP SEWFR 1I1.1( 11/ll0)(R I':V 11103)
PAlIE 1m2
5. DllclIlllcnlaliol1
I};S t!lo.:.l:ily I11ninlahl Wrilll'l1l\.\cords uf its nolullI! Illl1inlulmlCl\ and iIlSJ1CI~liems of lhe: sewer systelll?
r rYes f 1 N(~
Does Ill\.\ c.ily lI1ailllain wrillt'n re'cords fhl ils c1ealling. and in~rccliCln of rrobk1ll S\.~WI:r lilies'!
r;1Yc$1 '1 No
(, l' (nnning
Docs jlle ci1y have cap1f111 irnprovclll\,'llts planning in place jn rL~lllcdy any ongoing J1mbl",.rn~ with ils
f;C\\'\.\1' sysll\m? [)4IYcs l 1 N(l
Pk::ISl~ proviclc cktaib indlldinj!.ll d\.\srt iplinn of tlie plan, availabili1y or l1mmciall csnnll'cs and limcj';lhh:s
W0 &cJ- 1dS,1 jJ t /J4M.(~ fmJf.- tjtf;;9.I!- 6d1 ~ l f.) SA-; 1 JI11Uf S~~
:-((~~.f /...:S ~~~ ,--Jllf._Jl~f!LiM.._IdLI:I~JSdtt!..!J6'- P~~40 /,...1/
-/-1.... .tq't.1::Jtj;:..:.I..L...t..'{4;'tt:s" -e.;K~fr-'7!!&.;.t.~--~-~tiYt $.f~. f:L~JAL,.1)1t. ,eJ}/~~",1-
fLW._..1T .. . ~.__.\. .r~"'1J .-'"c.-, ~ ..' ... r . i .--- ----r
7, Sp\.'.d~ll NIll!.'.: No (null S\.'.wcr Blick-up Cov\.'mgc camillI he bllLrnd UlltH the !:ity (!(IS md the undcrwriting. l:ritc'ria
and has pa~scd :1 Nn.)o;lIIlt. Sl~wcr Back-np Rc~(\ll1lion
By:
h . .
(Signnll1n: and THk or AUlhoril.L:d R("pr\.:~("nlnliv,:'1
I Mell APT' :':EWl--.RBl/( IIIOO)(Re'v, 111O.~)
PAUl-, 2 01- 2
Resolution #
RESOLUTION ESTABLISHING LIMITED SEWER BACK-UP
CLEAN UP AND PROPERTY DAMAGE PROTECTION
FOR MUNICIPAL SEWER CUSTOMERS.
RECITALS
WHEREAS, the city affords municipal sanitary sewer services to many of the
property owners within the city; and
WHEREAS, on occasion blockages or other conditions in city sanitary sewer
lines may result in the back-up of sewage into properties that are connected to those city
sanitary lines; and
WHEREAS, sewer back-ups into property pose a public health and safety
concern; and
WHEREAS, it is not always easy to discern the exact cause and responsibility for
municipal sanitary sewer back-ups, and
WHEREAS, the City Council desires to encourage the expeditious clean-up of
properties that have encountered sewer back-ups; and
WHEREAS, the City Council desires to minimize the potential of expensive
lawsuits arising out of sewer back-up claims, and
WHEREAS, the City is a member of the League of Minnesota Cities Insurance
Trust; and
WHEREAS, the League of Minnesota Cities Insurance Trust is making available
to the city a limited "no fault" sewer coverage that will reimburse property owners for
certain clean-up costs and property damage irrespective of whether the City is thought to
be legally at fault.
NOW THEREFORE, BE IT RESOLVED, by the City Council of
, Minnesota, as follows:
As part of the contract for the provision of sewer services to the cU,stomers of the City,
and in consideration of the payment of sewer bills, the City agrees to reimburse its
sanitary sewer customers for up to $10,000 of clean-up costs and property damages
caused by a sanitary sewer back-up, irrespective of whether the city is thought to be
negligent or otherwise legally liable for those damages, subject to the following
conditions:
a. The back-up must have resulted from a condition in the city's
sanitary sewer system or lines, and not from a condition in a
private line.
b. The back-up must not have been caused by catastrophic weather or
other event for which Federal Emergency Management Assistance
is available
c. The back-up must not have been caused by an interruption in
electric power to the city's sewer system or to any city lift station,
which continues for more than 72 hours.
d. The back-up must not have been caused by rainfall or precipitation
that would constitute a 100-year stonn as determined by the
National Weather Service.
e. Neither the city nor the League Minnesota Cities Insurance Trust
(LMCIT) will reimburse any costs which have been or are eligible
to be covered under the property owner's own homeowners or
other property insurance, or which would be eligible to be
reimbursed under a National Flood Insurance Protection (NFIP)
policy, whether or not the property owner actually has NFIP
coverage.
f. The maximum amount that the City or LMCIT will reimburse is
$10,000 per building per year. In this regard, a structure or group
of structures served by a single connection to the city's sewer
system is considered a single building.
Adopted by the council this
day of (month).~.
City Clerk
Mayor
LMC
LMCIT
Risk Management Infonnation
Laague of Mi....esota Cities
Cilies pro"",UlTg excel/e..ce
145 University Avenue West, St. Paul, MN 55103-2044
Phone: (651) 281-1200 . (800) 925-1122
Fax: (651) 281-1298 . TDD (651) 281-1290
www.lmcit.lmnc.org
OPTIONAL "NO-FAULT" SEWER BACK-UP COVERAGE
LMCIT offers property/casualty member cities "no-fault" sewer back-up coverage. This new
optional coverage will reimburse a property owner for up to $10,000 of clean-up costs and
damages caused by a sewer back-up, irrespective of whether the city was negligent or legally
liable for those damages. '
This new coverage option is intended to do several things:
. To reduce health hazards by encouraging property owners to get back-ups cleaned up as
quickly as possible.
. To reduce the frequency and severity of sewer back-up lawsuits. I.e., property owners may be
less inclined to sue if they receive conciliatory treatment at the time of the back-up.
. To give cities a way to address the sticky political problems that can arise when a property
owner learns that the city and LMCIT won't reimburse him for his sewer back-up damages
because the city wasn't negligent and is therefor not legally liable.
Many cities and their citizens may find this new coverage option to be a helpful tool. However,
it's also important to realize that it's not a complete solution to sewer back-up problems, and that
not every possible back-up will be covered.
What sewer back-ups would be covered by the new coverage?
The no-fault coverage would reimburse the property owner for sewer back-up damages,
regardless of whether the city was legally liable, if the following conditions are met:
. The back-up must have resulted from a condition in the city's sewer system or lines. A back-
up caused by a clog or other problem in the property owner's own line would not be covered.
. It's not one of the situations that's specifically excluded in the coverage.
The coverage limit has not been exceeded.
Which situations are excluded?
The no~fault coverage will not apply in several "catastrophic" type situations. Specifically, these
are:
· Any weather-related or other event for which FEMA assistance is available;
· Any interruption in the electric power supply to the city's sewer system or to any city sewer
lift station which continues for more than 72 hours; or
· Rainfall or precipitation that exceeds the amount detennined by the National Weather
Service to constitute a 100-year storm event.
What costs would be covered?
The no-fault sewer back-up coverage would reimburse the property owner for the cost of
cleaning up the back-up, and for any damage to the property, up to the coverage limit. For
purposes of the city's deductibles, claims under the no-fault coverage are treated as liability
claims, so the same per-occurrence and/or annual deductibles will apply.
However, there are certain costs that would not be reimbursed under the no-fault coverage:
· Any costs which have been or are eligible to be covered under the property owner's own
homeowner's or other property insurance; and
· Any costs that would be eligible to be reimbursed under an NFIP flood insurance policy,
whether or not the property owner actually has NFIP coverage.
What is the coverage limit?
The limit is $10,000 per building per year. For purposes of the limit, a structure or group of
structures that is served by a single connection to the city's sewer system will be considered a
single building.
Only true "no-fault" claims are counted toward the $10,000 limit. Claims for damages caused by
city negligence, for which the city would be legally liable in any case, are not charged against
that limit.
What does it cost?
The premium charge for the optional no-fault sewer back-up coverage will be 8.5% of the city's
municipal liability premium. TIle LMCIT Board's intent is that this coverage option be self-
supporting, so we'll be monitoring and if necessary adjusting these charges in the future.
2
Is every city automatically eligible?
No. The city will need to meet these underwriting criteria:
The city must have a policy and practice of inspecting and cleaning its sewer lines on a
reasonable schedule.
. If there are any existing problems in the city's system which have caused back-ups in the past
or are likely to cause back-ups, the city must have and be implementing a plan to address
those problems.
The city must have a system and the ability to respond promptly to back-ups or other sewer
problems at any time of the day or week.
The city must have in place an appropriate program to minimize stormwater inflow and
infiltration.
. The city must have in place a system to maintain records of routine sewer cleaning and
maintenance, and of any reported problems and responses.
We'd stress that in making the underwriting evaluation we're trying to focus on reasonableness,
rather than on creating very specific standards. That is, the intent isn't to set an arbitrary
requirement that sewers be inspected and cleaned every six months or every three years or
whatever. What makes sense in one city with some older and sometimes sagging clay lines
probably wouldn't make sense in a city with newer plastic lines, and vice versa. From the
underwriting standpoint, the real concern is that the city has considered its own situation and
developed polices, practices, and schedules that make sense for its own situation.
How would the no-fault coverage work if we had a sewer back-up that was caused by city
negligence, and where the city was legally liable for the resulting damages?
If the situation isn't one where the no-fault coverage applies, the city's LMCIT liability coverage
would respond just as it does now. That is, LMCIT would investigate and if necessary defend the
claim on the city's behalf, and would pay the resulting damages ifin fact the city is legally liable
for those damages.
The same would be true for damages that exceed the $10,000 no-fault limit, or for a subrogation
claim against the city by the homeowner's insurance company. The city's existing LMCIT
liability would respond just as it does now.
What's the legal basis for this coverage? Wouldn't it be a gift of public funds to pay
damages that the city isn't legally liable for?
First, as noted earlier, one goal is to help reduce health hazards by encouraging prompt clean-
ups. That's clearly a public purpose and in the public interest.
3
Second, the law and facts surrounding most sewer back-up claims are rarely so clear that the
liability issue is entirely black and white. 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 ofthese cases.
Finally, part of the process for putting the coverage in place is for the city council to pass a
formal resolution that makes this no-fault sewer back-up protection part of the agreement
between the city and the sewer customer. The idea is that by paying his sewer bill, the sewer user
is purchasing not just sewer service but also the right to be reimbursed for certain specified sewer
back-up costs and damages. In other words, the basis for the no-fault payments to the property
owner would be the contract between the city and the sewer user.
, How do we put coverage in place?
Contact your LMCIT underwriter for an application. If the city qualifies for coverage, we'll send
the city a fornlal quote, along with a model resolution. To put coverage in place, the city council
must fonnally pass that resolution, and send a copy to LMCIT.
If the city decides to add this coverage, it will also be important to make sure the citizens know
about it. LMCIT can also provide models for a press release, newsletter article, utility bill insert,
etc.
Who can we contact with questions or comments?
Contact your LMCIT underwriter, or Pete Tritz at the League office.
We're also interested in hearing cities' reactions to this new coverage option, especially ifthere
are changes you'd like to see.
PST 3/1 0/2003
4
LMC
145 University Avenue West, St. Paul, ]\iN 55103-2044
phone: (651) 281-1200 . (800) 925-1122
Fax: (651) 281-1298 . TDD (651) 281-1290
www.lmcit.lmnc.org
League of Minnesota CiNes
CiNes pro",oting ""c"lI"nc"
TO:
LMCIT Property/Casualty members
FROM:
Lourdes Sanchez, LMCIT Communications Coordinator
RE:
New No-Fault Sewer Backup Coverage
This package is designed to help LMCIT members who have obtained the No-Fault Sewer Backup
coverage. This memo contains recommendations on how to infonn homeowners of this new
coverage, including a sample press release and a bill stuffer/newsletter article.
It is important to COlllinunicate to homeowners that even though the city now has coverage for
sewer backups, this coverage will not necessarily cover all resulting damages and costs. Otherwise
homeowners may be inclined to think that since the city now has this coverage, they no longer need
coverage through their homeowners insurance. This action would leave them uncovered in a
number of cases where this new coverage would not apply.
Here are some recommendations for cOlmnunicating with your citizens about the new coverage:
Review the recommended sample press release and add all the pertinent city infonnation. Once
the sample is tailored to your city, send it our to your local or area newspaper covering your
city.
Review the recOlllinended sample alticle. This sample should also be tailored to your city. Also
detennine all the appropriate ways to disseminate this infonnation. For example, use this article
as a utility bIll stuffer, as a short article in the city newsletter or web site, or as an insert to any
publication the city uses to cOlmnunicate with residents. You may reuse this article as fits.
. Designate a contact person to answer questions about this issue and the city coverage. You may
also research the cost of sewer backup coverage from local insurance agents that endorse this
type of coverage to homeowners' policies. You could provide these "quote" estimates to callers.
Research information on cleaning companies in your community that could help homeowners in
case of a sewer backup. Having a list of names and phone numbers of these businesses will help
homeowners in case of an emergency.
Please feel free to contact me with any questions you may have about the samples at 651-215-4035
or Isanchez@lmn.org You may also contact Pete Tritz at 651-281-1265 or ptritz@lmnc.org, or your
underwriter. This infonnation is also available at the LMC Web site. Visit us at
www.lmcit.lmnc.org
[Tailor this press release to send to your local newspaper]
City of [your city name] obtains No-Fault Sewer Backup coverage
In order to help homeowners with the damages and the costs of cleaning and disinfecting homes
affected by a sewer backup, the [your city name] recently obtained No-Fault Sewer Backup
coverage from the League of Minnesota Cities Insurance Trust.
[Quote by mayor, city manager or clerk - The city of [name] has a good record of inspecting and
maintaining its sewer lines, and because of its good sewer maintenance practices, in many cases the
city would not be legally liable for damages. Sewer lines are open systems and even the best
maintenance practices can not guarantee that a backup will not occur.] The new coverage provides
the city with a tool to assist homeowners who suffer damages from a backup that occurs even when
the city is without fault.
In many situations this coverage will benefit city residents. However, not every sewer backup will
be covered. Backups caused by problems in lines outside of the city system, like the homeowners'
line from the house to the main city line, are not covered.
Also not covered are backups caused by catastrophic events such as floods, storm-of-the-century
type rainfalls, or extended power outages. State or federal emergency assistance may be available
for some of these cases. NFIP flood insurance may also apply in some situations ifthe property
owner has that coverage.
[Quote by mayor, city manager or clerk - The city's coverage has a $10,000 limit for property
damages and clean up costs. Homeowners should keep in mind that keeping sewer backup coverage
in their homeowners' insurance and/or NFIP flood insurance offer the best protection against most
sewer backup incidents.]
What should homeowners do when a sewer backup is evident?
. Call [name and phone number of contact person] immediately. City workers are trained to
respond and may stop further damage to property.
Begin clean up and disinfection as soon as a backup is noticed. The city has gathered the names
and phone numbers of local businesses that may be of help in the cleaning process. Please call
[name and phone number of contact person] for a list. [List the businesses if there are only a few
in your area.]
For more infonnation about the new no-fault sewer coverage, please call [city manager,
administrator or clerk's name and phone number].
###
2
[Tailor this ad to place in your city publication, newsletter, web site or use as a bill stuffer]
City of [name] obtains No-Fault Sewer Backup coverage
In order to help homeowners with the damages and the costs of cleaning and disinfecting homes
affected by a sewer backup, the [ city name] recently obtained ,No-Fault Sewer Backup coverage.
The new coverage provides the city with a tool to assist homeowners who suffer damages from a
backup that occurs even when the city is without fault.
Sewer lines are open systems and even the best maintenance practices can not guarantee that a
backup will not occur. In many cases because of the city's good sewer maintenance records, the city
will not be legally liable for the sewer backup damages. With this new coverage, the city's
insurance may pay for some ofthe damages even though the city is found not liable.
In many situations this coverage will benefit city residents. However, not every sewer backup will
be covered. Backups caused by problems in lines outside ofthe city system, like the homeowners'
line from the house to the main city line, are not covered.
Also not covered are backups caused by catastrophic events such as floods, storm-of-the-century
type rainfalls, or extended power outages. State or federal emergency assistance may be available
for some ofthese cases. NFIP flood insurance may also apply in some situations if the property
owner has that coverage. Please call [city manager, administrator or clerk's name and phone
number] for details of what is covered under this coverage.
Keeping sewer backup coverage in your homeowners' insurance and/or NFIP flood insurance offer
the best protection against most sewer backup incidents.
What should you do when a sewer backup is evident?
Call [name and phone number of contact person] immediately. City workers are trained to
respond and may stop further damage to property.
Begin clean up and disinfection as soon as a backup is noticed. The city has gathered the names
and phone numbers of local businesses that may be of help in the cleaning process. Please call
[name and phone number of contact person] for a list. [List the businesses if there are only a few
in your area.] ,
3