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IV.9. Renewal of General Liability and Property Insurance and Authorize Not Waiving of the Statutory Tort Liability on the League of Minnesota Insurance Trust Policy; Bishop CITY OF HOPKINS City Council Report 2025-187 To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Nick Bishop, Finance Director Date: December 16, 2025 Subject: Renewal of General Liability and Property Insurance and Authorize Not Waiving of the Statutory Tort Liability on the League of Minnesota Insurance Trust Policy _____________________________________________________________________ RECOMMENDED ACTION MOTION TO approve renewal of the LMCIT Insurance Policy and to Not Waive the Statutory Tort Liability Limits to the Extent of Coverage Purchased. OVERVIEW The LMCIT notified its members that insurance rates will decrease by an average of 2%. Property rates will decrease by 5%, auto physical damage will increase by 10% and liability coverage will remain stable. The overall rate changes may not necessarily correspond with a specific City’s insurance premiums. Actual premiums are affected by changes in city expenditures, property values, payroll, experience rating and other exposure measures. Premiums were $288,292 in 2025 compared to a 2025 budget of $225,675, across all funds. We anticipate that insurance premiums overall for Hopkins will be within the budgeted amounts for 2026. Finance recommends a deductible amount to $50,000/$100,000 with $1,000 per occurrence after reaching the maximum $100,000. The current amount available in the Insurance Risk Fund to cover deductible costs is $267,949. The LMCIT Trustees have decided to wait until June 2026 to make decisions on programs dividends related to 2025. The additional time will allow for a more accurate assessment of the LMCIT’s financial performance and help better serve member’s long- term interests and financial stability. The staff recommendation to not waive statutory tort liability limits is based on liability exposure to the City in the form of higher premiums. SUPPORTING INFORMATION • Election of Waiver of Tort Limits for Liability Finance Department League of Minnesota Cities 3/2/2023 Liability Coverage Waiver Form Page 1 LIABILITY COVERAGE WAIVER FORM 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 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. 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. LMCIT Member Name: __________________________________________________________________________ ______________________________________________________________________________________________ Check one: ☐The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minn. Stat. § 466.04. ☐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: _______________________________________________________________________________________ Members who obtain liability coverage through the League of Minnesota Cities Insurance Trust (LMCIT) must complete and return this form to LMCIT before their effective date of coverage. Email completed form to your city’s underwriter, to pstech@lmc.org, or fax to 651.281.1298.