4.9. ERMUSR 04-21-2014 s/i
Elk REQUEST FOR ACTION
River
TO ITEM NUMBER
Mayor and City Council 4.9
AGENDA SECTION MEETING DATE PREPARED BY
Consent April 21, 2014 Lori Ziemer,Asst. Finance Director
ITEM DESCRIPTION REVIEWED By
Annual approval electing not to waive the statutory tort limits Tim Simon,Finance Director
for liability insurance Peter Beck, City Attorney
REVIEWED BY
ACTION REQUESTED
Approve election not to waive the statutory tort limits for liability insurance.
BACKGROUND/DISCUSSION
The City of Elk River participates in the League of Minnesota Cities Insurance Trust (LMCIT) for the
purpose of securing its liability,property, casualty, automobile and workers compensation insurance
coverage. As a condition of insurance policy renewal the City must annually execute an"LMCIT Liability
Coverage Waiver Form" and:
1. Determine whether to waive the statutory liability limits; and
2. Determine whether to acquire excess liability insurance coverage.
As established by Minnesota Statute 466.04, the statutory liability limits for claims that occur after July 1,
2009 are $500,000 per claimant and $1,500,000 per occurrence.
Annually the City Council must review and make an election of one of the following three options (claims
to which the statutory municipal tort limits do not apply are not affected by this decision):
1. Not to waive the statutory tort limits—staff recommendation
• If the city does not waive the statutory tort limits, an individual claimant would be
able to recover no more than $500,000 on any claim to which the statutory tort limits
apply.
2. Waive the limits and not purchase 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 $1,500,000 on a single
occurrence.
3. Waive the limits and purchase excess liability coverage
• 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.
On June 3, 2013 the City Council approved Resolution 13-34 electing not to waive the statutory tort
limits for liability insurance. This resolution allows the statutory tort limits to remain in place until the
POIEREO 1Y
INATUPE
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Council changes this election. Again, staff recommends approving Option 1 not to waive the statutory
limits.
FINANCIAL IMPACT
The City maintains liability insurance coverage through the League of Minnesota Cities Insurance Trust in
the amount required by State Statute.
ATTACHMENTS
• Resolution 13-34 Electing Not To Waive The Statutory Tort Limits For Liability Insurance
Action Motion by Second by Vote
Follow Up
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