Agenda - Council - 12/09/1997 - Laserfiche WebLink

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I I I I I I I I I I I I i I I I ! I I CASE # 7 DECIDE WHETHER OR NOT TO WAIVE STATUTORY LIABILITY LIMITS FOR INSURANCE APPLICATION Linda Waite Smith, Administrative Services Manager Background: We are currently completing the annual application for general liability and property insurance through the League of Minnesota Cities Insurance Trust (LMCIT). This year LMCIT is requiring that city councils take official action to waive or decline to waive statutory tort liability limits. Effective January 1, 1998, the statutory tort liability limit will be $750,000 per occurrence (it is now $600,000 per occurrence). Tort liability per claimant will be. $300,000 (it is now $200,000). In the past, LMCIT policies automatically waived the per claimant liability limit. A claimant could, potentially, receive an amount up to the total limit per occurrence. Under the new policy, claimants who have actual damages that exceed the per claimant limit of $300,000, will not be compensated for damages beyond the $300,000 limit. If, however, the City Council chooses to waive the statutory limits per claimant, actual damages up to the $750,000 per occurrence could be paid. The potential amount paid for claims increases if the Council chooses to waive the statutory limits. Therefore, the premiums are somewhat higher if limits are waived. Attached to this case is a copy of the LMCIT memo which more fully explains the policy changes. Staff Recommendations: The Council may find it unpalatable for citizens to be denied, because of statutory limits, full compensation for actual damages incurred because of a City act or omission. Therefore, staff recommends that Council waive the statutory limits. Reviewed by: Acting City Administrator/Administrative Services Manager Finance Officer Also distributed to: City Attorney CC: I2/09/97 /qq