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League of Minnesota Cities <br />183 University Ave. East <br />St. Paul, MN 55101-2526 <br />(612) 227-5600 (FAX: 221.0986) <br />May 6, 1988 <br />To: City officials and insurance agents <br />From: League of Minnesota Cities Insurance Trust <br />Re: Inverse condemnation and pollution liability coverages <br />Member cities of the League of Minnesota Cities Insurance Trust <br />can now add liability coverage for certain pollution exposures <br />and for inverse condemnation liability arising out of zoning and <br />other land use regulations. The city can add either or both <br />coverages, either at renewal or as a mid -term endorsement. <br />Copies of the endorsements are attached. <br />/POLLUTION POLLUTION COVERAGE 0.1-°7P <br />LMCIT is now offering to member cities an endorsement which adds <br />back coverage for certain pollution exposures, replacing the <br />strict pollution exclusion currently used. <br />The optional limited pollution liability endorsement gives the <br />city coverage for property damage or bodily injury caused by a <br />release or discharge of pollutants, where three conditions are <br />met: 1) the release is accidental; 2) the release occurs <br />entirely above ground; and 3) the release begins and ends within <br />72 hours of the accident. The endorsement also adds back <br />coverage for liability stemming from the use of mace, tear gas, <br />or similar substances. <br />Obviously, this does not provide a solution to all of a city's <br />exposures to pollution liability. Landfills and underground <br />storage tanks are two examples of exposures that would not be <br />covered. However, it will provide protection for things like a <br />malfunctioning ventilation system in a city building, or an <br />accidental spill of herbicides by park maintenance workers. <br />The pollution coverage is subject to a $600,000 annual aggregate <br />limit, including defense costs. The cost of adding the <br />pollution coverage is 3.5% of the city's liability premium. <br />.V INVERSE CONDEMNATION LIABILITY FOR LAND USE REGULATION . J'5 <br />In a 1987 decision, the U.S. Supreme Court ruled that a city <br />could be held liable for a temporary taking of private property <br />resulting from enforcement of a zoning ordinance or other land <br />use regulation. This is a new liability exposure for cities; in <br />the past, courts would bar future enforcement of an ordinance <br />which went too far, but generally would not award damages. The <br />PAGE -5- <br />