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April 25, 1977 Page 7 <br />Councilmember Ziebarth questioned if stop signs would increase <br />the problem by backing up traffic. It was reported that the <br />highway may be finished in another two years which would solve <br />the problem. <br />MUNICIPAL LIABILITY INSURANCE BIDS. Admin. Achen reported that <br />the city sent letters to 50 insurance agents and firms inviting <br />them to participate in bidding. Complete specifications were <br />automatically sent to 10 of those agents who currently are active <br />in the municipal market. Three of the other agents receiving <br />letters requested and were sent complete specifications. <br />Only one bid was received from Larry Donohue of Donohue - Thornton, <br />who handles the present insurance. Gulf Insurance, who presently <br />provides the City's comprehensive general liability, multi -peril <br />and commercial umbrella coverages, is withdrawing from the <br />Minnesota market. Thus, the policy for the city will be cancelled <br />when it comes up for renewal at midnight April 30, 1977. <br />The existing coverage is based upon rates established in 1974. <br />Gulf's bid from 1974 provided constant, flat rates during the <br />entire three year policy period. However, there has been a rash <br />of recent lawsuits against public agencies, large corporations <br />and individuals who are wealthy. The bid received from Home <br />Insurance Co. is for $45,618 or nearly $25,000 more than what <br />was budgeted. However, Home Ins. will not provide umbrella <br />coverage or police liability. A good number of insurance firms <br />have lately been refusing to provide coverage in these areas due <br />to the apparent open -ended risks. <br />Home Insurance's bid of $45,618 is for the first year of a three <br />year period. Their rates may increase for both the remaining <br />years. <br />It was felt by the Councilmembers that umbrella coverage was needed <br />in case of a lawsuit in excess of the $300,000 maximum allowed <br />by the State, since Atty. Meyers stated that it is possible that <br />an award could be made in excess of the $300,000 maximum at any <br />time. Admin. Achen pointed out that if a City provides themselves <br />with more than $300,000 coverage, they are then open to lawsuits <br />above the $300,000. If they carried only the $300,000 coverage, <br />they could very possibly be sued in excess of $300,00 and have <br />damages awarded in excess of $300,000. <br />Mr. Dononue reported that he had gone to 12 different insurance <br />companies. Home Insurance was the only company that would bid <br />on the policy. The insurance companies have become very reluctant <br />to write coverage for municipalities. <br />Mayor Pickar asked if the insurance package that was put together <br />for the City of Mounds View was the most economical way to go. <br />Mr. Donohue replied that the only possible alternative would be to <br />hire a professional insurance consultant and have him look at the <br />various exposures the City has and draw up sepcifications and get <br />companies to bid on them. The present insurance coverage was drawn <br />from past coverage and the model League of Minnesota Cities <br />