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CR 06-147 Authorize Renewal of the League of MN Cities Insurance Trust Policy December 19,2006 Council Report 2006-147 . 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 LMCIT insurance coverage. This does not include medical insurance coverage. The recommendation to waive the statutory tort liability limits is based on past action by the City Council. You may of course choose to not waive the statutory limts on tort liability thus saving the city approximately $4,000 in premiums. Overview 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 waive or not waive the tort liability limit. See attached LMCIT resource document regarding liability coverage options. Overall municipallliability rates will decrease 3 %, property rates will increase 10%, and auto liability rates will decrease 3 % and auto physical damage will decrease 3 %. Rates for all other coverage, namely excess liability, boiler & machinery open meeting law remain the same. The rate changes are primarily driven by changes in the Leagues loss experience. While rates do influence premiums, an individual city's actual premiums will also be affected by changes in its expenditures, property values, payrolls, and other exposure measures and also by changes in the city's experience rating. The insurance premium for Hopkins will increase overall approximately 8-10% over last year's premium. The primary reason for the increase is the result of higher property values, and reserves for ongoing liability claims. Overall, the liability and property loss picture doesn't look much different than it did a year ago, and the League isn't seeing any new trends or alarming patterns. Liability loss costs, which make up about half of the property/casualty total, have been remarkable stable for the past few years. Actual loss costs at the LMCIT have been coming in below projections. Property makes up about l/3rd of the LMCIT loss cost. From 2003 forward property loss rates have been low, in large part because the last three summers have produced very little storm loss. Despite the stability, litigation relating to land use regulation and development continues to be a concern of the League. Land use litigation costs average the League over $2 million a year - about 20% of the total liability loss cost - and they can vary a great deal from year to year. Finance continues to recommend the deductible amount 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 $185,250. In addition the LMCIT has declared a $4 million dollar dividend on the 2006 policy. This is significantly below the $12 million returned last year. The decrease is the result of higher than usual losses and loss development. See accompanying memo for more details on the expected dividend. Primary Issues to Consider Deductible amount 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 $4,000 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 LMCIT Insurance Policy and based on past council action 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. Supportine Information LMCIT Memo . LMCIT Waiver Form . LMCIT Resource document on liability coverage options ~ Christine Harkess, CPA, CGFM Finance Director Winancial Impact: (approximately) $190.000 Budgeted: Yes Source: All fundsl LMC League of Minnesota Cities Insurance Trust 145 University Avenue West, st. Paul, MN 55103-2044 (651) 281-1200 · (800) 925-1122 Fax: (651) 281-1298 · TDD: (651) 281-1290 www.lmnc.org L-eue 0/ Minnesota Ctties Cities promoting ~ce November 29,2006 To: LMCIT Members and Agents From: LMCIT Board of Trustees Re: 2006 - 2007 Property/Casualty Rates and Dividend 2007 Workers' C;ompensation Rates Property/casualty rates and dividend for 2006 - 2007 Rates Here are the premium rate changes LMCIT members will see at their next renewal. The property/casualty rate changes apply to renewals on or after November 15, 2006. Municipal liability rates will decrease 3 %. Property rates will increase 10%. Auto liability rates will decrease 3%. Auto physical damage will decrease 3%. In addition to these changes, there's a significant rate change for increased limits on UM/UIM. The rate for $1 million limits will increase 250%. Rates for the basic $50,000 limit will remain unchanged. As we review our loss experience, it's clear that our rates are insufficient to reflect the risk associated with UM/UIM claims - particularly at the increased limit. The increase reflects the actual risk based on our loss experience. The rate increase will no doubt cause some cities to reevaluate whether the higher limits are really necessary. To help in that evaluation we've redrafted our risk management memo on auto coverage options to include a full discussion of the UMlUIM options. That memo is available on our web site or by calling the League offices. There are no changes for excess liability, machinery breakdown, liquor liability, bond rates, or open meeting law defense. Rate changes are primarily driven by loss experience. The rate changes listed do not mean that your city's actual premium will necessarily increase or decrease by these exact amounts. Although rates do indeed influence premiums, your city's actual premium will also be affected by changes in expenditures, property values, payrolls, and other exposure measures, and also by changes in your experience rating. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER r Dividend 1 Property/casualty program members will share a $4 million dividend this year. This is quite a bit less than the $12 million we returned last year and the $9 million we returned for three years prior. The decrease in dividend is primarily the result of higher-than-usuallosses and loss developInent. As it turns out, there were quite a few mid-sized to large losses in 2005-2006. As in the past, we'll distribute the dividend in mid-December. The dividend formula will be the sa~e as we've used for several years. Under that formula, each city's share is proportionate to the. difference between the city's total earned premiums and total incurred losses for all years the city has been a member, with large individual losses capped for purposes of the formula. Work comp rates for 2007 Overall work comp rates will remain steady for 2007, although class rate changes may impact cities differently. Every three years, the LMCIT Board reviews and revises the relative levels of premium rates for the various classes of employees. To the extent possible, we set the rates for each class based on LMCIT's own actual loss experience by class for the preceding five-year period. In implementing adjustments to the class rate schedule for 2007, we've imposed a 20% constraint on the amount of increase by which any individual class rate can change. For a city with a typical mix of payrolls, the class rate changes will offset each other to a large extent. However, a special purpose entity member with most of its payroll in one or two classes will see a much bigger effect. This is particularly noticeable for 2007 in the volunteer fire class. But it's important to note that the actual increases for a few classes would have been much greater without the 20% cap. Without the cap, volunteer fire rates based on the actual losses would have increased almost 75%. The following table details the 2007 rate changes for the classifications that cover the bulk of city payrolls. There are a number of other classes -that are used more sparingly in cities. It' s important to note that most job class rates are shown per $100 of payroll. The rates for volunteer fire (7708 and 7718) are shown per 100 of population. LMCIT % LMCIT Code Description 2006 Change 2007 5506 Street 7.04 11 7.80 9402 Sewer, snowplow, etc. 7.04 11 7,80 7380 Ambulance 6.27 -17 5,18 7381 Vol. Ambulance 6.34 20 7,61 7502 Gas Ops 2.42 20 2,89 7520 Waterworks 3.03 20 3,64 7539 Electric or Steam Plant 4.00 -9 3.64 7580 Sewage Plant 4.03 -39 2.48 7610 Cable TV .40 19 .48 2 7706 Fire - Paid 6,13 11 6.79 7716 Fire - Paid (non-smoking) 5,53 11 6,11 7708 Fire - Volunteer 62,99 20 75.59 7718 Fire-Vol (non-smoking) 56.71 20 68.06 7720 Police 4.06 -4 3.90 7721 Police (non-smoking) 3.65 -4 3.51 8017 Liquor - Off Sale 2,13 3 2.19 8227 City Shop 5.26 15 6.05 8810 Clerical .61 19 .72 8829 Nursing Home - Prof 4.89 -10 4.42 8830 Nursing Home - Other 3,63 10 3.99 8833 Hospital - Prof 2.64 -17 2,19 9015 Building Maint 4,80 -2 4,72 9033 Housing Authority 3.62 -25 2.71 9040 Hospital - Other 5.44 20 6.52 9060 Golf course 1.72 -7 1,60 9063 Community center 1,56 -15 1,33 9084 Liquor - On Sale 3.53 -9 3.22 9102 Parks 3.21 3 3,31 9182 Ice Arenas 1.87 -33 1.25 9403 Garbage 7,06 1 7.11 9410 Municipal Employees 1.10 -62 .42 9411 Elected Officials .42 -57 .18 . In addition to the overall flat rates and indicated class rate changes, the work comp credit for managed care participation will be reduced from 3% to 2%. Ongoing analysis of the managed care work comp program shows inconclusive savings for participation in managed care. While we think a credit still makes sense for managed care, the reduction is indicative of some caution about the ultimate benefit of managed care in workers' compensation. The work comp program will not return a dividend this year. What's behind the rate changes? Property/casualty Overall, the liability loss picture doesn't look much different than it has in the recent past, and we don't see any new trends or alarming patterns. Liability losses make up not quite half of our total loss cost and have been remarkably stable for the past few years. Actual loss costs have been coming in below our projections. Litigation relating to land use regulation and development continues to be a concern. Land use litigation costs average between about $2 and $2.5 million a year - and they can vary a great deal from year to year. Of similar concern are sewer back-up liability costs, which shot up to the $2 million range in 2005 and are expected to be similar for 2006. Police liability claims also look to be high thus far in 2006. Property makes up about a third of our loss cost and property losses tend to be more variable than liability. We did have higher-than-expected property losses this year, which accounts for 3 the rate increase. A string of storm, fire and other losses pushed loss rates up in the '05 underwriting year and the early projection is that '06 will be similar or worse. The other major factor impacting this year's property rates is an increase in LMCIT's reinsurance premiums. Because of the high reinsurance limits we need to purchase in order to cover possible catastrophic losses (e.g. the tornado that moves through several cities), reinsurance costs are a large cost component in our property program, representing about 35% of property premium costs. Our reinsurance costs have gone up this year in part due to our loss history and also as a result of coverage changes we've implemented. Work comp Although we were able to keep overall work comp rates flat for 2007, rising medical costs continue to be a major concern. Medical costs for work comp injuries are projected to continue increasing at a rate of about 9% a year. Medical costs now make up over half of work comp loss costs - about as much as indemnity benefits, Special Compensation Fund assessments, and defense costs combined. Our work comp indemnity costs have been generally stable and less than projections. While this is good and helps offset the increase in medical costs, we also need to keep an eye on injury frequency. Hopefully cities can continue reducing the numbers of employee injuries; that's really the best tool we have to control future premium costs. Investment income remains a very important element in the LMCIT work comp program, though not quite as significant as it was a few years ago. Investment income now produces about a quarter of the program's total revenue; a few years ago, it was over a third. Nevertheless, investment income is still very important. Premiums alone would not quite cover projected losses, let alone administrative and reinsurance costs. How was the dividend amount determined? Most LMCIT members are very familiar with LMCIT's approach to rate-setting. Briefly, the premium rates incorporate a safety margin. Premiums plus investment income are designed to produce enough revenue to cover losses and expenses even if losses turn out to be greater than projections. If losses turn out to be at projections, that margin isn't needed to pay for losses and is available either to be returned to members as a dividend or used to strengthen LMCIT's fund balance. If losses turn out to be lower than projections, that additional savings also becomes available to be returned to members. It can take several years until claims are finally settled and we know for sure what the actual loss costs were for any given underwriting year. For this reason, we have to work with estimates, which are continually revised and updated. The program's results and the amount of dividend we can return in anyone year therefore don't just depend on what happened during that year; the year's financial results are also affected by changes in our estimates of what prior year losses will ultimately cost. 4 The main factor behind this year's smaller dividend is that we incurred losses at a higher level than projected, primarily a string of mid-sized to larger fire and storm losses in 2005 and the beginning part of 2006. These higher-than-projected losses reached into the safety margin we established when we set rates for the year. In addition, our review of prior years suggests that some of those losses may also turn out to be higher than we've previously projected. Using our margin to pay for these losses means there's less available to give back as a dividend. The LMCIT Board also again used a small part of this year's net income to further strengthen the program's fund balance. The Board concluded that this was appropriate in light of the continued growth in the property/casualty program's premium volume and the increased amount of risk LMCIT is now retaining. If you have any questions or comments, please feel free to contact Pete Tritz or Ann Gergen at the League office, or any of the members of the LMCIT Board. 5 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 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 which 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 of the liability coverage obtained from LMCIT. Date of city council meeting December 19, 2006 Signature Position Finance Director Return this completedfrom to LMCIT, 145 University Ave. W, St. Paul MN 55103-2044 LMCIT(11/00)(Rev. 11/03) Page 1 of 1 LMC League of Minnesota Cities Insurance Trust 145 University Avenue West, St Paul, MN 55103-2044 (651) 281-1200 · (800) 925-1122 Fax: (651) 281-1298 · TDD: (651) 281-1290 www.lmnc.org L-g.uz of M;nnesota emu Citiu promoting ~nr;mcv RISK MANAGEMENT INFORMATION LMCIT LIABILITY COVERAGE OPTIONS Liability Limits, Coverage Limits, and Waivers LMCIT gives cities several options for structuring their liability coverage. The city can choose either to waive or not to waive the monetary limits that the statutes provide; and the city can select from among several liability coverage limits. This memo discusses these options and identifies some issues to consider in deciding which of the options best meets the city's needs. What are the statutory limits on municipal tort liability? The statutes limit a city's tort liability to a maximum of $300,000 per claimant and $1,000,000 per occurrence. These limits apply whether the claim is against the city, against the individual officer or employee, or against both. What are the coverage limits for LMCIT's basic primary liability coverage? LMCIT's liability coverage provides a limit of $1,000,000 per occurrence, matching the per- occurrence part of the statutory municipal tort liability limit. Under the basic coverage form the $300,000 per claimant part of the statutory liability limit is not waived, so if the statutory limit applies t~ the particular claim, LMCIT and the city would be able to use that limit as a defense. Beside the overall coverage limit of $1 ,000,000 per occurrence, there are also annual aggregate limits (that is, limits on the total amount of coverage for the year regardless of the number of claims), for certain specific risks. Aggregate limits apply to the following: $1,000,000 annuall $1,000,000 annuall $1,500,000 annuall $1,000,000 annuall $200,000 annuall $1,500,000 annuall $1,000,000 annuall $1,000,000 annuall * The limit applies to both damages and defense costs. ** Coverage is on a sliding scale percentage basis, and applies to both damages and litigation costs. If the statute limits our liability to $1,000,000 per occurrence, why would the city purchase higher coverage limits than that? There are several different reasons why cities should strongly consider carrying higher limits of liability coverage. 1. The statutory tort limits either do not or may not apply to several types of claims. Some examples include: . . Claims under federal civil rights laws. These include Section 1983, the Americans with Disabilities Act, etc. . Claims for tort liability that the city has assumed by contract. This occurs when a city agrees in a contract to defend and indemnify a private party. . Claims for actions in another state. This might occur in border cities that have mutual aid agreements with adjoining states, or when a city official attends a national conference or goes to Washington to lobby, etc. . Claims based on liquor sales. This mostly affects cities with municipal liquor stores, but it could also arise in connection with beer sales at a fire relief association fund-raiser, for example. . Claims based on a "taking" theory. Suits challenging land use regulations frequently include an "inverse condemnation" claim, alleging that the regulation amounts to a "taking" of the property. 2. LMCIT's primary liability coverage has annual limits on coverage for a few specific risks. The table on page 1 lists the liability risks to which aggregate coverage limits apply. If the city has a loss or claim in one of these areas, there might not be enough limits remaining to cover the city's full exposure if there is a second loss of the same sort during the year. Excess liability coverage gives the city additional protection against this risk as well. However there are a couple of important restrictions on how the excess coverage applies to risks that are subject to aggregate limits: . The excess coverage does not apply to four risks: lead and asbestos;failure to supply utilities; mold; and "limited pollution" claims if either the pollutant release or the damage is below ground or in a body of water; and . The excess coverage does not automatically apply to liquor liability unless the city specifically requests it. 3. The city may be required by contract to carry higher coverage limits. Occasionally, a contract might include a requirement that the city carry more than $1,000,000 of coverage limits. Carrying excess coverage is a way to meet these requirements. (There's also another 2 option for cities in this situation. LMCIT can issue an endorsement to increase the city's coverage limit only for claims relating to that particular contract. There's a small charge for these "laser" endorsements.) 4. There may be more than one political subdivision covered under the city's coverage. An HRA, EDA, or port authority is itself a separate political subdivision. If the city EDA, for example, is named as a covered party on the city's coverage and a claim were made that involved both the city and the EDA, theoretically the claimant might be able to recover up to $1,000,000 from the city and another $1,000,000 from the EDA, since there are two political subdivisions involved. Excess coverage is one way to provide enough coverage limits to address this situation. Another solution is for the HRA, EDA, or port authority to carry separate liability coverage in its own name. This issue of multiple covered parties can also arise is if the city has agreed by contract to name another entity as a covered party, or to defend and indemnify another entity. 5. Cities sometimes choose to carry higher coverage limits because of a concern that the courts might overturn the statutory liability limits. However, those limits have now been tested and upheld several times in Minnesota. While it's always possible that a future court might decide to throw out the statutory limits, this is now less of a concern. What excess liability coverage limits are available? Excess coverage is available in $1 million increments, up to a maximum of $5 million. We're just a small city. Isn't excess liability coverage really just something that big cities might need? Absolutely not. If anything, excess liability coverage is even more important to a small city. If a city ends up with more liability than it has coverage, the city will have to either draw on existing funds or go to its taxpayers to pay that judgment. A large city faced with, say, a million dollars of liability over and above what its LMCIT coverage pays might be able to spread that $1 million cost over several thousand taxpayers. The small city by contrast might be dividing that same $1 million cost among only a couple hundred taxpayers. $1 million divided among 5000 taxpayers is $200 apiece - annoying but probably at least manageable for most taxpayers. $1 million divided among 200 taxpayers is $5000 apiece - enough to be a real problem for many. How does' excess coverage apply to uninsured/underinsured motorist coverage? If the city carries excess liability coverage, the city has the option to have the excess coverage also apply to uninsured or underinsured motorist (UM/UIM) claims. To db so, the city must first increase its primary UM/UIM limit from the basic $50,000 to $1,000,000. There are additional premium charges both to increase the primary UM/UIM limit and to apply the excess coverage to the UMlUIM exposure. The city needs to consider whether the benefit from having higher UMlUIM limits is worth that cost. 3 The UMIUIM coverages are intended to assure that an injured driver will be compensated if slhe is injured in an accident caused by an uninsured or underinsured driver. The UM/UIM coverage steps into the place of the liability insurance that the driver should have had. Keep in mind that in the case of city vehicles, an injury to the driver while operating a city vehicle would in most cases be covered by workers' compensation. The amounts the individual would be able to recover from UMlUIM would be in addition to the medical, indemnity, and other benefits paid under work compo In many cases, it would amount to a double recovery for the individual's injuries. A city might decide to carry a higher limit for a couple reasons: if they believe the workers' compensation benefits are insufficient to compensate their injured employees; or if they want to make sure that non-employees riding in city vehicles are fully compensated in the event of an accident with an uninsured or underinsured vehicle. (Note that in most cases the passenger's own UMlUIM would also respond..) LMCIT now gives the cities who participate in the primary liability coverage the option to waive the $300,000 per claimant statutory liability limit. What's the effect if we do this? If the city chooses the "waiver" option, the city and LMCIT no longer can use the statutory limit of $300,000 per claimant as a defense. Because the waiver increases the exposure, the premium is roughly 3% higher for coverage under the waiver option. If the city waives the statutory limit, an individual claimant could therefor recover up to $1,000,000 in damages on a claim. Of course, the individual would still have to prove to the court or jury that slbe really does have that amount of damages. Also, the statutory limit of $1,000,000 per occurrence would still apply; that would limit the individual's recovery to a lesser amount if there were multiple claimants. Why would the city choose to pay more in order to get the waiver-option coverage? Does it give the city better protection? No. Buying coverage under the "waiver" option doesn't protect the city any better. The benefit is to the injured party. The statutory liability limit only comes into play in a case where 1. the city is in fact liable; and 2. the injured party's actual proven damages are greater than the statutory limit. Very literally, applying the statutory liability limit means that an injured party won't be fully compensated for hislher actual, proven damages that were caused by city negligence. Some cities as a matter of public policy may want to have more assets available to compensate their 4 citizens for injuries caused by the city's negligence. Waiving the statutory liability limits is a way to do that. Other cities may feel that the appropriate policy is to minimize the expenditure of the taxpayers' funds by taking full advantage of every protection the legislature has decided to provide. There's no right or wrong answer on this point. It's a discretionary question of city policy that each city council needs to decide for itself. How would the waiver affect our city's coverage or risk on those claims that the statutory tort liability limits don't apply to? It doesn't. Waiving the statutory tort limits has no effect on claims that the statutory limits don't apply to. What's the effect of waiving the statutory limits if we have excess coverage? If the city has $1 million of excess coverage and chooses to waive the statutory tort limits, the claimants (whether it's one claimant or several) could then potentially recover up to $2 million in damages in a single occurrence. If the city carries higher excess coverage limits, the potential maximum recovery per occurrence is correspondingly higher. Carrying excess coverage under the waiver option is a way to address an issue that some cities find troubling: the case where many people are injured in a single occurrence caused by city negligence. Suppose, for example, that a city vehicle negligently runs into a school bus full of kids, causing multiple serious injuries. $1,000,000 divided 50 ways may not go far toward compensating for those injuries. Excess coverage under the waiver option makes more funds available to compensate the victims in that kind of situation. The cost of the excess liability coverage is about 25% greater if the city waives the statutory tort limits. The cost difference is proportionally greater than the cost difference at the primary level because for a city that carries excess coverage, waiving the statutory tort limits increases both the per-claimant exposure and the per-occurrence exposure. If we waive the statutory tort liability limits, does it increase the risk that the city will end up with liability that LMCIT doesn't cover? No. The waiver form specifically says that the city is waiving the statutory tort liability limits only to the extent of the city's coverage. Of course, that's not to say that there is no risk that the city's liability could exceed its coverage limits. We listed earlier a number of ways that could happen to any city. But the waiver doesn't increase that risk. 5 Can we waive the statutory tort limits for the primary coverage but not for the excess coverage? No. If the city decides to waive the statutory tort limits, that waiver applies to the full extent of the coverage limits the city has. The city cannot partially waive the statutory limits. I'm confused. Is there a simple way to summarize the options? It's not necessarily simple, but the table on the following page is a shorthand summary of what the effect would be of the various coverage structure options in different circumstances. I'm still confused. Who can I talk to? Give us a call at the League office. Pete Tritz, Tom Grundhoefer, Bill Everett, Doug Gronli, or any ofLMCIT's property/casualty underwriters will be glad to talk with you. 6 On a liability claim to whicb on a liability claim to wbicb tbe statntory limits appl)' tbe statntory limits do not aWl)' Coverage structure 1'his is the maximum 1'his is the maximum This is the tnaXitUum atnOunt of datnages which If the city~ amount a single claimant total amount that all L~Cl'f would pay on the city's behalf for a could recover on an claimants could recover single occurrence, regardless of the number of occurrence. on a single occurrence. claimants. Does not have eXcess coverage & $1,000,000 Does not waive the statutory litnits $300,000 $1,000,000 Does not have eXcess coverage & $1,000,000 Waives the statutory limits $1,000,000 $1,000,000 11as $\,000,000 of eXcess coverage & $2,000,000 Does not waive the statutory \imits $300,000 $1,000,000 11as $\,000,000 of eJ\.cess coverage & $2,000,000 Waives the statutory limits $2,000,000 $2,000,000 LMCIT Liability Coverage options pSI 12/04 \