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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 />December 1, 1989 <br />To: LMCIT member cities <br />From: Peter Tritz <br />Re: New excess liability coverage options <br />The League of Minnesota Cities Insurance Trust now offers cities <br />two options in purchasing excess liability coverage: <br />- LMCIT now makes it possible for cities to obtain excess <br />coverage without waiving the statutory liability limit of <br />$600,000 per occurrence. Under this option, the higher <br />excess coverage limits would be available only for those <br />claims which are not covered by the statutory limits. <br />- Alternately, cities may choose to waive the statutory <br />liability limits to the extent of the excess liability <br />coverage purchased. Under this option, the higher <br />coverage limits would be available for all claims, <br />including claims covered by the statutory liability <br />limits. <br />Cost <br />The city's premium for excess coverage will be 15% lower if the <br />city chooses not to waive the statutory monetary liability <br />limits. In addition overall rate levels for excess coverage <br />will be substantially below last year's levels. <br />Background <br />LMCIT's basic liability coverage provides limits of $600,000 per <br />occurrence. LMCIT also offers cities the option of an <br />additional $1 million, $3 million, or $5 million of liability <br />coverage limits. Since the statutes provide that cities and <br />city officials and employees can't be held liable for amounts <br />over $600,000 per occurrence, city officials often ask why it <br />would ever make sense to buy coverage limits higher than <br />$600,000. There are four basic kinds of reasons why a city <br />might choose to buy limits of coverage greater than the <br />statutory liability limits. <br />