HomeMy WebLinkAbout2015-03-04 PACKET 04.B. REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 3/4/2015 ` ," '
PREPARED BY CITY CLERK CARON STRANSKY
ORIGINATING DEPARTMENT STAFF AUTHOR
***********�************************************
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. l"he
total all claimants would be able to recover for a single occurrence to which the statutory tort limits
apply would be limited to $1,500,000.
BUDGET IMPLICATION
ADVISORY COMMISSION ACTION N/A
SUPPORTING DOCUMENTS:
� MEMO/LETTER: City Clerk Caron Stransky dated February 19, 2015
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
ADMINISTRATORS COMMENTS
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Administrator Date
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COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
CITY OF COTTAGE GROVE
� MINNESOTA
MEMO
To: Honorable Mayor and City Council Members
From: Caron Stransky, City Clerk
Date: February 19, 2015
Subject: 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 City 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 all claimants would be able to recover for a single occurrence to which
the statutory tort limits apply, would be limited to $1,500,000. These statutory tort limits
apply regardless of whether the City purchases the optional excess liability coverage..
• If the City waives the statutory tort limits and does notpurchase excess liability
coveraqe, a single claimant could potentially recover up to $2,000,000 for a single
occurrence. (Under this option, the tort cap liability limits are waived to the extent of the
member's liability coverage limits, and the LMCIT per occurrence limit is $2,000,000)
The total all claimants would be able to recover for a single occurrence to which the
statutory tort limits apply would also be limited to $2,000,000, regardless of the number
of claimants.
• Jf the City waives the statutory tort limits and purchases excessJiabilitv covera.qe, a
single claimant could potentially recover an amount up to the limit of the coverage
purchased. The total 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: (1) Payment of insurance losses, (2) Costs#or 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 in 1986 of
$25,000 to a current fund balance totaling $2,383,739.27.
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