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FEB 22 '94 09 :58AM ROTHSCHILD B W INC P.4/5 v. What does the Open Meeting Law Defense Cost Reimbursement Agreement cover? Under the new coverage, LMCIT will reimburse a city official for 801 of the defense cost incurred by the city official in defending an Open Meeting Law lawsuit. The Open Meeting Law Defense Costs Reimbursement Agreement is limited to $20,000. This is the most LMCIT will reimburse any one city official for defense costs for Open Meeting Law lawsuits commenced during the term of the insurance coverage agreement, regardless of the number of lawsuits or the number of actual alleged violations. VI. What doesn't it cover? There are two Major kinds of costs for which this coverage would not reimburse the official: 1. Any fine or penalty for violating the open meeting law. 2. Any award that orders the city official to pay for the opposing party's attorney's fees. As an example, suppose a newspaper is successful in bringing an open meeting claim against a city official. The judge awards a $100 penalty against the official and also orders the official to pay the attorneys fees incurred by the newspaper in bringing the claim. The new coverage would not pay or reimburse either the penalty or the attorneys fees awarded. Note too that this coverage would not cover any legal costs that the city might incur if the city itself were a party to the Open Meeting Law litigation unless, of course, it was part of a suit that also included a covered claim for damages, as discussed earlier. VII. How will the Open Meeting Law Defense Cost Reimbursement Agreement work? The coverage is significantly different than other coverage provided under the standard LMCIT coverage agreements in a couple important ways. First, unlike LMCIT's liability coverages, the Open Meeting Law coverage does not pay the legal costs on the city official's behalf. Instead, LMCIT will reimburse the city official for 80% of those costs, to a maximum of $20,000, after the official has incurred those costs. The city official remains responsible for paying his/her defense attorney, including the 20% which LMCIT will not reimburse as well as any costs over $20,000.