HomeMy WebLinkAbout2014-03-05 PACKET 04.E.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM # �
DATE 3/5/2014 • �
PREPARED BY CITY CLERK CARON STRANSKY
ORIGINATING DEPARTMENT STAFF AUTHOR
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COUNCIL ACTION REQUEST
To not waive the tort liability limits.
STAFF RECOMMENDATION
Recommends that the City Council not waive the statutory tort limits where an individual claimant would
be able to recover no more than $500,000 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 $1.5 million.
BUDGET IMPLICATION
ADVISORY COMMISSION ACTION: N/A
SUPPORTING DOCUMENTS:
� MEMO/LETTER: City Clerk Caron Stransky dated February 26, 2014
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
ADMINISTRATORS COMMENTS
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�- ity Administrator Date
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COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
CITY OF
MINNESOTA
COTTAGE GROVE
MEMO
To:
From:
Date:
Subject:
Honorable Mayor and City Council Members
Caron Stransky, City Clerk
February 26, 2014
TORT LIABILITYLIMITS
Cities obtaining liability insurance coverage from the League of Minnesota Cities Insurance
Trust (LMCIT) must decide annually whether to waive the statutory tort liability limits to the
extent of the coverage purchased. The decision to waive or not to waive statutory limits has
the following effects:
• If the Citv does not waive the statutorv tort liabilit ly imits, an individual claimant would be
able to recover no more than $500,000 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 $1.5 million, regardless of the
number of claimants.
• If the Citv waives the statutorv tort limits and does not purchase excess liability
coveraqe, a single claimant could potentially recover up to $1.5 million on a single
occurrence. The total which all claimants would be able to recover for a single
occurrence to which the statutory tort limits apply would also be limited to $1.5 million,
regardless of the number of claimants.
• If the City waives the statutory tort limits and purchases excess liabilitv coverage, a
single claimant could potentially recover an amount up to the limit of the coverage
purchased. The total which all claimants would be able to recover for a single
occurrence to which the statutory tort limits would apply would also be limited to the
amount of coverage purchased, regardless of the number of claimants.
Claims to which the statutory municipal tort limits do not apply are not affected by this decision.
The City does not purchase excess liability coverage. In 1986, the City established a Self-
Insurance Fund to provide self-insurance against liability for the City and its officers,
employees, agents and servants.
The Self Insurance Fund is devoted for the: (1) Payment of insurance losses; (2) Costs of
defense and investigation; (3) Premiums and deductible amounts when commercial insurance
is purchased for a risk; (4) Costs of loss control activities; and (5) Any other costs customarily
borne by commercial insurers under conventional insurance policies.
Since its inception, the Self-Insurance Fund has grown from the initial deposit into the fund in
1986 of $25,000 to a fund balance for year end 2013 totaling $2,466,233.66.
RECOMMENDATION
It is recommended by City Attorney, Korine Land that the City Council select the first bullet and
not waive the statutory tort liability limits.
/cs