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CR 2003-047 Authorize Renewal of the Legue of Minnesota Cities Insurance Trust Policy ell Y Or: March 18, 2003 - Council Report 03-047 'Ill"'" - '\ HOPKINS AUTHORIZE RENEWAL OF THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST . POLICY Proposed Action 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 will result in staff moving forward with the proposed insurance coverage, excluding medical payments coverage. Overview As of January 1, 2003, the statutory municipal tort liability limits continue to be $300,000 per claimant, $1,000,000 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 $10,000 or 7.2% over last years premium for a total of $153,000. The primary reason for the increase is the result of higher property values coupled with a 10% increase in the property insurance rate. General liability rates also went up 5% over last year. The rates reflect current trends in the insurance industry. Finance continues to recommend the deductible amount of $20,000/$40,000 with $1,000 per occurrence after reaching the maximum of $40,000. Primary Issues to Consider .. The City of Hopkins currently 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 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 Hopkins 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, would 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 recommends renewal of the policy, excluding medical payments coverage and waiving of the monetary limits on the tort liability established by Minnesota Statutes 466.04, to the extent of the limits of the liability coverage obtained from LMCIT. Supportin2 Information . LMCIT Waiver Form r ~/ ~/A~ Lori Yager 7' Finance Director !Financial Impact: (approximately) $153,000 Budgeted: Yes . ~ Source: All funds ~= --- - LMCIT L1ABILTIY 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 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 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 w~ch the statutory municipal 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 $ from the League of Minnesota Cities Insurance Trust (LMCIT). 1.000,000 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 ofthe liability coverage obtained from LMCIT. Date of city council meeting Signature Position Return this completedfrom to LMCIT, 145 University Ave. w., St. Paul MN 55103-2044 Page 1 of 1 .