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 The result is that the city will have $750,000 of coverage limits available for most claims. But on those claims to which the statutory limits apply, the city and LMCIT will be able to use the statutory tort liability limit to limit an individual claimant's recovery to no more than $300,000. Of course, there are some claims to which the statutory liability limits don't apply. A federal civil right claim is one likely example. For these claims, there is no monetary limit on what the individual claimant can recover from the city. On these claims, the city has $750,000 of coverage limits available, regardless of whether it's one claimant or several. The LMCIT Board decided to restructure the liability coverage in this way for two reasons: First, it lets a city to take advantage of all of the defenses and protections that the legislature has provided. Second, the projected savings from being able to apply the $300,000 per claimant statutory limit will roughly offset the projected increased cost for the higher per-occurrence limit. The city's option to waive the statutory limits The statutory liability limit only comes into play if somebody has been injured by the city's negligence, and has proved to the court that his/her actual injuries exceed $300,000. The statutory liability limit means, very literally, that the city and LMCIT won't fully compensate that individual for his/herinjuries which the city caused. Because of this, some cities may decide that as a matter of public policy you want to have more than $300,000 available to compensate a citizen who has been injured by the city's negligence. For this reason, LMCIT gives the city the option to waive the statutory liability limit if the city wishes to do so. By waiving the statutory limit, the city makes it possible for a claimant to recover up to the full limit of the city's LMCIT liability coverage. Since it increases the loss exposure, there is an additional cost if the city decides to waive the statutory limits. If a city decides to waive the statutory liability limit and doesn't carry thc optional excess liability coverage, the city's cOverage would essentially be identical to the current coverage but with a higher limit. For cities that carry the optional excess liability coverage, the waiver also applies to that coverage. T,.~The decision to waive or not to waive the statutory liability limits must be made by the city _-----. ~ The' package ~newai materials inclucles atorm that must be c0rhpleted~ci returned to LMCIT to document the council's decision on whether or not to waive the statutory limits. Here's a shorthand summary of the practical effects of that decision: 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 $750,000. These statutory tort limits would apply regardless of whether or not the city purchases the optional excess liability coverage.