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2007-01-10 CC
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2007-01-10 CC
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<br />· A formally organized membership organization <br />· A professional organization <br />· Any for-profit or non-profit corporation <br /> <br />These new provisions and limits don't affect city relief associations, which are already <br />automatically covered under the city's LMCIT liability coverage. Nor do these changes affect <br />joint powers entities or other governmental entities such as HRAs, utilities commissions, port <br />authorities, etc. (Information on how coverage works for these types of entities is available on <br />the League website. Contact LMCIT with any questions.) Finally, these provisions and limits <br />don't affect any entity that's named as a covered party on the city's coverage. <br /> <br />What should the city do to manage these risks? <br /> <br />As a first step, it's a good idea to find out what organizations your city employees are involved <br />in as members or officers, that might arguably be considered to be city-related. You'll also want <br />to find out what the purpose of each organization is and what sorts of activities the organization <br />is involved in. . <br /> <br />In some cases, the city might determine that participation in a particular organization is not part <br />of the city employee's city duties. In such a case, the city should let the employee know that if <br />slhe chooses to participate in the organization, slbe is doing so on hislher own. It is a good <br />practice to provide that information to the employee in writing. <br /> <br />In other cases, the city might conclude that an employee should be encouraged or even required <br />to participate in a particular organization. In those cases, the city will want to find out whether <br />the organization has liability coverage to protect its members and officers for claims arising from <br />those activities. If the organization hasn't done anything to cover the liability risks its officers <br />and members face because of the organization's activities, the city has several options: <br /> <br />· You might decide that the city is comfortable simply assuming the risk that the damages and <br />defense costs for a liability claim against a city employee arising from his/her activities in the <br />organization will be greater than the $100,000 limit. (In evaluating that risk, note that for <br />unpaid officers or members of a non-profit corporation, M.S. 317 A.257 provides some, but <br />by no means complete, protection from liability claims.) <br /> <br />· You might decide that participating in the organization will not be considered part of the <br />employee's city duties. In that case, of course, the city should make sure the employee <br />understands that if s/he chooses to participate, s/he is doing so on hislher own. <br /> <br />· The city may want to encourage the organization to get liability coverage. (In some cases <br />depending on the organization's purpose and structure, the organization may be eligible to <br />obtain coverage through LMCIT.) <br /> <br />Questions? Contact Pete Tritz (651-281-1265; ptritz@lmnc.org) or Ann Gergen (651-281- <br />1291; agergen@lmnc.org) at the League office. <br /> <br />3 <br />
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