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<br /> <br />tervi{{e <br />'Esta6[isfie.tf 1$57 <br /> <br />18809dJUnStr<et, Crnterville, ?/2If55038 <br />651-429-3232 or <Fa>;: 651-429-8629 <br /> <br />February 9, 2009 <br /> <br />Memo to Council <br /> <br />Re: Insurance matters <br /> <br />You have three issues are on your agenda for consideration that relate to the annual <br />renewal of coverage with the League of Minnesota Cities Insurance Trust (LMCIT). <br /> <br />1) Waiver of statutory immunity to the extent of insurance limits. Staffhas always <br />recommended that the City not waive immunity limits. The only reason to <br />consider waiving limits would be if you felt that someone that would be injured <br />by city negligence should have higher limits of protection. As I understand it, <br />most cities do not waive the statutory immunity limits. <br /> <br />2) Umbrella limits. The City has not carried an umbrella policy to provide higher <br />protection limits. Many cities do carry an umbrella policy. The cost for an <br />umbrella policy is about $1500 per million dollars of additional coverage. The <br />basic policy limit is $400,000 per person, $1.2 million per occurrence. The City <br />attorney can offer insights into when umbrella coverage may be desirable. <br /> <br />3) Finally, LMCIT offers no-fault sewer back-up coverage. Centerville has not <br />carried this coverage in the past. The cost is about $800 per year. The policy <br />would pay a maximum of $1 0,000 per structure. This is similar to no-fault <br />premises medical coverage in that the policy will pay regardless of whether the <br />city was negligent or not. For example, you could have a plug in a city sewer that <br />backed up sewage into one or more basements. As long as the city has a <br />reasonable maintenance program for its sewers, it is likely that the city would not <br />be found negligent and therefore the liability policy would not pay anything. The <br />down side of having the "no-fault" coverage is that it is easier to have payouts on <br />your policy that will adversely affect future dividends and rates. <br /> <br />Dallas Larson, Administrator <br /> <br />/~ ()/ <br />