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If the Statute Limits our Liability, Why Purchase Higher Coverage Limits? <br /> There are several different reasons why cities should strongly consider carrying higher limits of <br /> liability coverage. <br /> The Statutory Tort Limits Either Do Not or May Not Apply to Several Types of Claims <br /> Some examples include: <br /> • Claims under federal civil rights laws. These include Section 1983, the Americans with <br /> Disabilities Act, etc. <br /> • Claims for tort liability that the city has assumed by contract. This occurs when a city agrees in a <br /> contract to defend and indemnify a private party. <br /> • Claims for actions in another state. This might occur in border cities that have mutual aid <br /> agreements with adjoining states, or when a city official attends a national conference or goes to <br /> Washington to lobby, etc. <br /> • Claims based on liquor sales. This mostly affects cities with municipal liquor stores, but it could <br /> also arise in connection with beer sales at a fire relief association fund-raiser, for example. <br /> • Claims based on a "taking" theory. Suits challenging land use regulations frequently include an <br /> "inverse condemnation" claim, alleging that the regulation amounts to a"taking"of the property. <br /> LMCIT's Primary Liability Coverage has Annual Limits on Coverage for a few Specific Risks <br /> The table on page one lists the liability risks to which aggregate coverage limits apply. If the city has <br /> a loss or claim in one of these areas, there might not be enough limits remaining to cover the city's <br /> full exposure if there is a second loss of the same sort during the year. Excess liability coverage gives <br /> the city additional protection against this risk as well. <br /> However,there are a couple important restrictions on how the excess coverage applies to risks that <br /> are subject to aggregate limits: <br /> • The excess coverage does not apply to three risks: failure to supply utilities; mold; and "limited <br /> pollution" claims if either the pollutant release or the damage is below ground or in a body of <br /> water; and <br /> • The excess coverage does not automatically apply to liquor liability unless the city specifically <br /> requests it. <br /> The City may be Required by Contract to Carry Higher Coverage Limits <br /> Occasionally, a contract might include a requirement the city carry more than$1,500,000 of coverage <br /> limits. Carrying excess coverage is a way to meet these requirements. (There's also another option <br /> 2 <br />