4.7. SR 02-09-2004MEMORANDUM
Item 4 .Z.
TO:
FROM:
DATE:
SUBJECT:
Mayor and Council
Lori Johnson, Finance Director
February 9, 2004
Consider Voluntary Insurance l~uote from League of Minnesota
Cities Insurance Trust
The League of Minnesota Cities Insurance Trust (LMCIT) has provided a quote for accident
coverage for city volunteers upon the request of the City's insurance agent, Mary Eberley.
The city currendy purchases a separate worker's compensation insurance pohcy for board
and commission members. Volunteers who respond to an emergency situation are
automatically covered under worker's compensation insurance. The city has not purchased
coverage for other volunteers in the past unless; of course, if the city was negligent and
legally liable for the injury it was covered under the liability policy.
Attached is information from LMCIT outlining the proposed volunteer accident insurance
policy. Basically, this policy would insure volunteers who are not covered by worker's
compensation insurance such as volunteers for park, recreation, clean-up day, or other city
activities and programs. Currently, the recreation department uses around 30 volunteers for
the T-Ball program and expects that additional volunteers will be needed to assist with the
soccer program. There are also a few volunteers who assist other departments.
The premium for basic coverage for one year is $1,500 with an optional $675 per year for
medical benefit coverage.
Action Requested
The City' Council is asked to consider the proposed LMCIT Accident Coverage for City
Volunteers.
S:NCouncil~I,ori~2004~ InsuranceQuote.doc
Leag,,¢ of Pii,mesota Cities
Cities ?romoti,~g excellence
LMCIT
Risk Management Information
145 'UnlversltT Avenue ~(Test, St. Paul, MzN 55103-2044
Pho~,e: (651) 281-1200 · (800) 925-1122
Fax: (651) 281-1298 ° TDD (651) 281-1290
w~v.lmclt.l~c.org
ACCIDENT COVERAGE FOR CITY VOLUNTEERS
LMCIT offers its workers compensation member cities an optional accident coverage for city
volunteers. This coverage provides a schedule of benefits to compensate city volunteers who are
injured while performing volunteer services for the city.
Who is covered by the program?
With only a few exceptions, all city volunteers working under the city's direction and control will
be automatically covered on a blanket basis if the city chooses to add this coverage. This could
include, for example, coaches and instructors in recreation programs, volunteers worldng on a
city-sponsored festival or celebration, "clean-up day" volunteers, etc. The city will not need to
list the individuals who are to be covered, either by name or by project; nor will the city need to
keep track of the time the various volunteers put in.
Four classes of volunteers are not automatically covered:
Volunteers who are covered by workers compensation. Certain volunteers are defined to be
"employees" for purposes of workers compensation, and are therefor eligible for workers
compensation benefits if they are injured. These include volunteer firefighters, ambulance
attendants, first responders, law enforcement assistance volunteers, and civil defense
volunteers. Since these volunteers are already protected by workers compensation, they are
not covered under this plan.
City council, board, committee, and commission members. Other coverage options are
already available for these people. The workers compensation law gives cities the option to
extend workers compensation coverage to elected and appointed officials. LMCIT has also
for several years offered an accident policy underwritten by CIGNA for members of city
councils, boards, and conm2ittees.
Members of private organizations which provide services or participate in city-sponsored
activities as a group.
?olunteers working on construction or demolition projects. These volunteers will not be
covered automatically. However, for an additional charge, the city can add coverage for
volunteers' on a specific construction or demolition project.
What benefits would an injured volunteer receive?
The plan provides three basic benefits:
Disability benefit. A volunteer who is unable to engage in the activities of his/her nomxaI
occupation because of an injury suffered while performing volunteer services for the city will
receive a disability benefit of $400/week for up to 26 weeks.
Death benefit. If a volunteer dies as a result of an injury suffered while performing
volunteer services for the city, a death benefit of $100,000 will be paid to the volunteer's
surv'ivors or estate.
Impairment benefit. If a volunteer suffers a permanent impairment or disability as a result
of an injury suffered while performing volunteer services for the city, the volunteer will
receive a lump sum payment as compensation for that impairment. Payments are based on
the percentage of disability, ranging from $750 for a 1% disability to $100,000 for t00%
disability.: The percentage of disability is determined in the same manner used for
impairment compensation in the workers compensation system.
For an additional charge the city can add coverage for up to $1000 of medical costs. This limited
medical coverage is intended to pick up relatively minor first aid costs. On more serious injuries,
it could also be applied to costs which the individual would otherwise have to bear under his/her
own health coverage's deductible or co-pay provisions.
What does it cost?
The cost is based on the city's population. The basic armuai charge is $. 10 per capita, subject to
a minimum premium of $150 and a maximum premium of $1500. The additional cost to add the
optional medical coverage is 45% of the basic premium. Coverage for volunteers working on a
construction or demolition project can be added for a charge of $300 per project, or $435 per
project if the optional medical coverage is included.
The expiration date of this coverage will be coordinated with the city's LMCIT workers
compensation coverage. For cities that add this coverage mid-term, the initial premium will be
pro-rated.
Why would the city want this coverage? Aren't injuries to volunteers already covered
under the ci~'s liability coverage?
An injury to a volunteer would be covered by the LMCIT liability coverage only if the city was
legally liable for that injury; that is, if the injury was caused by some negligence by the city or a
city officer or employee or another city volunteer. However, just as with any other tort claim,
the city would not be liable for an injury to a volunteer if the volunteer him/herself were more at
fault than the city, or if the injury were simply an accident that really wasn't anyone's fault.
volunteer coach being hit in the head by a batted baseball might be an example of the latter
situation.
A
The volunteer accident coverage protects the volunteer on a "no-fault" basis. The benefits are
automatically payable if the injury occurs while the volunteer is performing services for the city,
regardless of whose fault it was. ]Besides protecting the volunteer whose injury isn't caused by
the city's negligence, having these no-fault benefits available could also help avoid litigation in
cases where the city (or a city officer, employee, or other volunteer) is or may be at £ault. The
injured volunteer can receive these benefits without getting into an adversary situation against
the city.
Of course, if the volunteer's injuries exceeded the benefits paid under this coverage, he/she
would still be able to make a tort claim against the city for those excess damages, if the injury
was caused by the city's negligence.
Why did LMCIT create a whole new program? Why not just offer a "voluntary workers'
compensation endorsement" and provide workers compensation benefits to volunteers?
The LMCIT Board chose this approach for several reasons. It's substantially less expensive to
the city than providing workers compensation benefits would be, reflecting the more limited
scope of benefits provided. Administration is simpler for the city, since the city doesn't have to
keep records of how many hours were worked by how many volunteers, etc. It eliminates the
problem of determining what the appropriate indm2nity rate is for an unpaid volunteer. It's also
less risky for LMCIT and for LMCIT's other members.
How do we enroll?
To em-oil, complete and return the attached form. LMCIT will bill the city for the premium.
Further information
If you have any questions or need further information, contact any of the following: Pete
Tritz at 651-281-1265; Tom Grundhoefer at 651-281-1266; Pat Deshler at 651-281-1267; or
Barb Meyer at 651-281-4173.
PST - 4/13/98 - fax-66050