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MINUTES <br />CITY COUNCIL <br />March 13, 1991 <br />The City Administrator indicated that Mr. Morelan's <br />points are well taken. Dram Shop coverage is expensive <br />on a temporary basis. However, the issue the <br />Administrator sees is one of risk management and <br />exposure. The Administrator pointed out that with the <br />Rec Association and Canadian Days the argument may be <br />made that these are City organizations. The <br />Administrator also pointed out that most of these <br />organizations~ events are held on City property. The <br />Administrator also pointed out that usually with Dram <br />Shop claims all the liquor establishments that have <br />been visited in the course of a day are included in the <br />claim. Therefore, even if someone was not intoxicated <br />while at a Rec Association event, for example, but <br />later became intoxicated at another location, the Rec <br />Association, and potentially the City, could be named <br />in a claim. <br />Morelan stated that it was his understanding that this <br />insurance coverage would not protect the City. <br />The City Attorney stated that if not, the City would be <br />in the same situation, however, there would be Dram <br />Shop insurance coverage. <br />The City Administrator stated that if the City can be <br />named as an additional insured, the policy may provide <br />the City with defense coverage. <br />Scalze asked what other cities do in this instance. <br />The City Administrator stated that his experience has <br />been that the distinguishing factor is how closely the <br />event is tied to the City. He knew of instances where <br />the organization was clearly not associated with the <br />City nor on City property, and Dram Shop was not <br />required. <br />The City Attorney suggested that he and the <br />Administrator research the matter to determine if the <br />City can purchase liquor liability coverage and/or if <br />the City can be named as an additional insured on an <br />organization's policy. <br />Blesener asked about the amount of the City's <br />liability. <br />The Attorney replied that the City would not know its <br />exposure until a case is tried. However, he will <br />research the issue to determine if there are other <br />cases pending. <br />Page 6 <br />