01-25-1995 Council Agenda - Laserfiche WebLink

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cx4 2a74 cecrar, 515 Little Canada Road, Little Canada, MN 55117-1600 (612) 484 -2177 / FAX: (612) 484 -4538 MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: January 19, 1995 RE: 1995 Insurance Renewals MAYOR Michael I. Fahey COUNCIL Beverly Scalze Jim LaValle Steve Morelan Bob Pedersen ADMINISTRATOR Joel R. Hanson The cost of insuring the City of Little Canada for the policy year commencing January 1, 1995 is $48,654, exclusive of worker's compensation and open meeting law coverage. This is an increase of $2,751 (6.0%) over 1994 amounts. Major factors accounting for this increase are: * Higher liability exposure as calculated from budgeted expenditures. * Increase in Fidelity Bond limits from 25,000 to 50,000 due to unavailability of lower limit. * City's claims experience (i.e. Mover's Warehouse). This amount does not include excess liability (umbrella) coverage. Due to the fact that statutory limits of liability exist for tort claims against municipalities in the State of Minnesota, we have deemed it unnecessary to provide this coverage the past few years. To add the excess coverage of $1,000,000 in 1995 would cost $9,633 should we not waive our rights of statutory immunity. If we waive the right to statutory immunity, the cost would be $13,135. (What this does is give people the right to sue us for more than statutory limits. I do not feel that is a prudent expenditure.) Based on a discussion with our insurance agent, Mr. Dave Seppelt, I would recommend we not add umbrella coverage again in 1995. In 1994, we also added coverage for violations of the open meeting law. The 1995 premium for this coverage is $618. This coverage provides 80% of defense costs incurred by a City official in defending an open meeting law lawsuit. In some of the recent Minnesota cases, defense costs have been substantial ($10,000 to $20,000). I would recommend we continue with this coverage. Page 137