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<br /> STAFF REPORT <br />DATE: October 21, 2025 <br /> CONSENT <br />TO: Mayor and City Council <br />FROM: Nina Kraemer, Finance Coordinator <br />AGENDA ITEM: 2026 LMCIT – Statutory Tort Limits <br /> <br /> <br />CORE STRATEGIES: <br /> <br />☐ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services <br />☐ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future <br />☐ Managed Growth ☐ Resilient Infrastructure <br /> <br />BACKGROUND: <br /> <br />As part of the annual insurance renewal process, the League of Minnesota Insurance Trust <br />(LMCIT) requires each City that obtains liability coverage from them to update the Liability <br />Coverage Waiver Form. The City of Lake Elmo has never waived its monetary limits on tort <br />liability. <br /> <br />The decision to waive or not waive must be made annually by the City Council. The decision has <br />the following effects: <br /> <br />• If the member does not waive the statutory tort limits, an individual claimant could <br />recover no more than $500,000 on any claim to which the statutory tort limits apply. The <br />total all claimants could recover for a single occurrence to which the statutory tort limits <br />apply would be limited to $1,500,000. These statutory tort limits would apply regardless <br />of whether the member purchases the optional LMCIT excess liability coverage. <br /> <br />• If the member waives the statutory tort limits and does not purchase excess liability <br />coverage, a single claimant could potentially recover up to $2,000,000 for a single <br />occurrence. (Under this option, the tort cap liability limits are waived to the extent of the <br />member's liability coverage limits, and the LMCIT per occurrence limit is $2,000,000.) <br />The total amount all claimants would be able to recover for a single occurrence to which <br />the statutory tort limits apply would also be limited to $2,000,000, regardless of the <br />number of claimants. <br /> <br />• If the member waives the statutory tort limits and purchases excess liability coverage, a <br />single claimant could potentially recover an amount up to the limit of the coverage <br />purchased. The total all claimants would be able to recover for a single occurrence to <br />which the statutory tort limits apply would also be limited to the amount of coverage <br />purchased, regardless of the number of claimants. <br />