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i i 34901&ia ton Aveame North St.Paul,MN 551268494 League of Minnesota Cities (612)490.5600 OPEN MEETING LAW DEFENSE COST REIMBURSEMENT COVERAGE NOW AVAILABLE Beginning November 15, 1993, LMCIT is offering an new open Meeting Law Defense Cost coverage. This optional coverage will reimburse city officials for 80% of the legal costs they incur to defend themselves if they are charged with violating the Open Meeting Law. This new coverage is quite different from anything LMCIT (or anyone else, for that matter) has done before. We'll try in this memo to answer some of the questions that will come up when city -officials are deciding whether this coverage makes sense for their city. • I. Why is this needed? Doesn't our existing LMCIT coverage apply to Open Meeting Lav claims? Generally, no. The LMCIT liability coverage is designed to respond to claims for damages. The Open Meeting Law doesn't provide for damages; it provides for a $100 civil penalty, and loss of office for repeated violations. Fines and penalties are not "damages" for purposes of the liability coverage, and LMCIT therefor generally has no duty to get involved in defending Open Meeting Law charges under the liability coverage. The only exception is if the Open Meeting Law charge is combined with a claim for damages that is covered under the liability coverage. For instance, if an employee brought a wrongful termination action against a city, the employee might also charge that there was a violation of the open meeting law as part of the termination process. In that case, LMCIT would be responsible for defending the entire litigation - the Open Meeting Law charge as well as the covered liability claim. But an Open Meeting Law charge by itself is not a claim for damages, and the LMCIT liability coverage would therefor not respond. II. Why provide coverage for this type of exposure? • One of LMCIT's member cities asked the Trust Board to consider adding this kind of coverage. The request grew out of an instance in which several council members incurred very substantial legal bills defending themselves against an Open Meeting Law charge.