IV.4. 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 2023-135
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Nick Bishop, Finance Director
Date: December 5, 2023
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 of 2024 coverage rates in November of 2023. They
indicated that insurance rates will decrease by an average of 0.75%. Liability rates will
decrease by an average of 6%, auto physical damage will increase by an average of
10% and property rates 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 $264,814 in 2023 compared to a 2023
budget of $288,928. We anticipate that insurance premiums overall for Hopkins will be
within the budgeted amounts for 2024.
Finance continues to recommend the deductible amount of $20,000/$40,000 with
$1,000 per occurrence after reaching the maximum $40,000. The current amount
available in the Insurance Risk Fund to cover deductible costs is $271,014. In addition
we will be sharing in a $3 Million LMCIT dividend this year. LMCIT has consistently paid
out dividends since 1987, totaling approximately $366 Million. The dividend will add to
our insurance reserves for potential claims and deductibles.
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.