III. 3. Renewal of General Liability and Property Insurance and Authorization to Not Waive the Statutory Tort Liability on the League of Minnesota Cities Insurance Trust (HRA2022-10)November 1, 2022 HRA Report 2022-09
RENEWAL OF GENERAL LIABILITY AND PROPERTY INSURANCE AND
AUTHORIZATION TO NOT WAIVE THE STATUTORY TORT LIABILITY
ON THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST POLICY
Proposed Action
Staff recommends adoption of the following: Move to approve renewal of the LMCIT Insurance Policy
for the HRA and to not 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 LMCIT insurance coverage
including not waiving the statutory tort liability limits. The staff recommendation to not waive the
statutory tort liability limits is based on liability exposure to the city in the form of higher premiums. This
is the option selected this past year.
Overview
The renewal date for the HRA Insurance Policy is 11/1/22 and is for a one year period. The LMCIT has
indicated that insurance rates in the property/casualty program will decrease by 1.5%. The overall rate
changes may not necessarily correspond with a specific entity’s insurance premiums. Actual premiums
are also affected by changes in expenditures, property values, payrolls, experience rating and other
exposure measures. Our actual increases will be known once the renewal application has been submitted
and the rate quoted. The premium for the 2021-2022 insurance year was $19,722, which was an increase
of $753 or 4.0% over the previous year. The increase in mainly caused by increases to property rates. This
is the fifth increase after four years of premium decreases.
Primary Issues to Consider
• Election of waiver of tort limits for liability
• Liability exposure if we elect to waive the tort limits for liability
Staff Recommendation
Finance recommends renewal of the LMCIT Insurance Policy based on past HRA Board action and to not waive
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.
Supporting Information
• LMCIT Waiver Form
__________________________________________________
Nick Bishop, CPA
Finance Director
LIABILITY COVERAGE – WAIVER FORM
Members who obtain liability coverage through the League of Minnesota Cities Insurance Trust
(LMCIT) must complete and return this form to LMCIT before the member’s effective date of
coverage. Return completed form to your underwriter or email to pstech@lmc.org.
The decision to waive or not waive the statutory tort limits must be made annually by the
member’s governing body, in consultation with its attorney if necessary.
Members who obtain liability coverage from LMCIT must decide whether to waive the statutory tort
liability limits to the extent of the coverage purchased. The decision has the following effects:
• If the member does not waive the statutory tort limits, an individual claimant could recover no more
than $500,000 on any claim to which the statutory tort limits apply. The total all claimants could
recover for a single occurrence to which the statutory tort limits apply would be limited to $1,500,000.
These statutory tort limits would apply regardless of whether the member purchases the optional
LMCIT excess liability coverage.
• If the member waives the statutory tort limits and does not purchase excess liability coverage, a single
claimant could recover up to $2,000,000 for a single occurrence (under the waive option, the tort cap
liability limits are only waived to the extent of the member’s liability coverage limits, and the LMCIT
per occurrence limit is $2,000,000). The total all claimants could recover for a single occurrence to
which the statutory tort limits apply would also be limited to $2,000,000, regardless of the number of
claimants.
• If the member 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 all claimants
could 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 statutory municipal tort limits do not apply are not affected by this decision.
2
LMCIT Member Name:
__________________________________________________________________________
Check one:
o The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minn.
Stat. § 466.04.
o The member WAIVES the monetary limits on municipal tort liability established by Minn. Stat. §
466.04, to the extent of the limits of the liability coverage obtained from LMCIT.
Date of member’s governing body meeting: _____________________________________________
Signature: Position: ________________________________