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\\ 00 LEAGUE OF CONNECTING & INNOVATING MINNESOTA SINCE 1913 CITIES RISK MANAGEMENT INFORMATION WHEN LMCIT DENIES A LIABILITY CLAIM When the League of Minnesota Cities Insurance Trust(LMCIT)denies a liability claim, it is usually not an issue of coverage - i.e. whether or not the city's LMCIT liability coverage covers the claim. Rather, the issue is liability;that Is, is the city legally liable for the damages of each particular claim? A scenario A water main breaks and your city's sewer system backs up into several homes causing major damage; or someone falls and is injured on a city sidewalk; or a tree falls in a windstorm and damages a car. A citizen has a loss and is looking to the city to pay for it. Your city has liability coverage through LMCIT, so you report the claim to LMCIT-and the claim is denied. City officials quickly hear from angry citizens demanding to know why LMCIT won't pay for such losses and what the city is going to do about it. LMCIT Background LMCIT provides liability coverage to over 800 Minnesota cities. LMCIT is not an insurance company-it is a cooperative self-insurance organization of cities. The idea behind LMCIT is that rather than paying premiums to an insurance company,the cities pool those funds and use them to cover claims. Any funds LMCIT collects from its members that are not needed to cover losses or expenses are returned to member cities as dividends. LMCIT has returned over$210 million in dividends to its member cities since 1987. About liability Something to Think About When a third party makes a claim against the city and the In order for the city to be liable city submits that claim to LMCIT,the key issue is liability. for someone else's damages: It's important to remember the city isn't automatically 1. The city must have been liable simply because the injury occurred on city property, negligent. or because city equipment or personnel were involved. 2. The damages must have been caused by the city's It's very much an over-simplification,but, in general, for negligence. the city to be liable for someone else's damages,three 3. It must not be one of the conditions must be met: areas in which the city is immune from liability. 1. The city must have been negligent. That is, the city must have done something it shouldn't have done, or failed to do something it should have done. 2. The damages must have been caused by the city's negligence. LEAGUE OF MINNESOTA CITIES 145 UNIVERSITY AVE.WEST PHONE:(651)281-1200 FAX:(651)281-1298 INSURANCE TRUST ST.PAUL.MN 55103-2044 TOLL FRFF:(300)925-1122 WFB:WWW.LMC.ORG