CCP 04-08-1996 - Laserfiche WebLink

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I I ,. liability for actions in another state; e.g. by a city official attending a conference, or under a mutual aid agreement with a political subdivision across tlle border . liability for a zoning action under an "inverse condemnation" theory of law I I Second, the underlying coverage might not cover the filii extent of the city's exposure within the statutory liability limits in all cases. LMCIT applies a $600,000 aggregate limit to the "products liability," the "limited pollution," and the optional "inverse condemnation" coverages. This is an I additional limit, besides the $600,000 per occurrence limit that applies to all liability coverage. The annual limit is the maximum amount the policy will pay for this kind of liability, regardless of the number of occurrenccs. Thus, if part of the annual limit is used up in one occurrence, I tllere may not be adequate coverage limits available if there is a second loss of that type. Excess coverage can help protect against this risk. I Third, cities sometimes cover other political subdivisions under the city's coverage; since each entity is subject to liability up to the statutory limits, you could /"1m out of coverage if both I entities were found liable in a single occurrence. HRA's or EDA's are corrunon examples of separate public entities that might be covered under the city's coverage. A fue relief association, .. which is legally a separate corporation, could present this issue as well. Under the statutes, these entities are legally separate public corporations and political I subdivisions in their own right. This is true even if the city council serves as the HRA or EDA board. As public corporations, these entities are exposed to liability themselves up to the statutory limits. It's possible there could be a situation in which both the city and the HRA or I EDA were liable on the same claim. The single $600,000 coverage limit per claim would not fully cover the two entities' liability if the sum of the city's and the HRA's or EDA's liability exceeded $600,000. Excess liability coverage is one way to address this issue. Another solution I is for the HRA or EDA to carry separate coverage. I Fourth, the city might be concerned whether the statutory liability limits will stand up in court. The statutory liability limits have now been upheld in several Minnesota Supreme Court cases, so this is now less of a concern. However, it is always difficult to predict the future course of I court decisions. I Carrying excess liability coverage can protect the city against these kinds of risks. The city council must weigh these risks against the cost of the excess covcrage. I . Sometimes city officials reason that "we're only a small city, so we don't need high liability it coverage limits." But if anything the opposite is true. A big city has much more tax base and many more taxpayers over which to spread, say, a $1,000,000 excess judgement. In a small city, the burden per taxpayer could be enormous. I