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I' The following types of litigation are excluded under Coverage D of the LMCIT liability coverage document: Something to ThinkAbout • Physical takings. Litigation that seeks only • Subject to the exceptions compensation or other relief for an actual or alleged listed to the left, litigation physical occupation, invasion,or use of property by. relating to land use the city. regulation,development, • Special assessments. Litigation that seeks only franchising,or authority to reduction or invalidation of a special assessment. engage in enterprise • Negligent inspection. Litigation that seeks only operations is covered compensation for damages based on the city's actual whether or not it includes a or alleged negligent inspection or enforcement of the claim for damages. state building code or the state plumbing,electrical, fire, or similar codes. (These"negligent inspection" • The coverage is available damage claims are covered under the general regardless of the whether the municipal liability coverage found in Coverage A.) action is brought by or • Contractual obligations. Litigation that seeks only against the city. Accordingly, amounts due or allegedly due under contract, the coverage is available even including any city bonds or other obligations. if the city is a plaintiff seeking • Ordinary land use enforcement. Litigation which to enforce its land use, was initiated by the city to enforce a land use development,franchise, or regulation, and which does not involve a challenge enterprise rights. to the validity or constitutionality of the regulation. I If we get involved in this kind of litigation, what does the coverage pay for? The coverage applies to the following types of"litigation costs": • Legal fees for the counsel selected jointly by the city and LMCIT to represent the city. • Necessary legal fees for counsel to represent the city which the city incurs prior to reporting the litigation to LMCIT(these fees are covered at 50 percent). • Necessary litigation expenses other than legal fees. • Most damages the city is required to pay. • Supplementary payments, including up to$200,000 of statutory attorneys fees. Effective November 15, 2010 coverage for"litigation costs" is based on a sliding scale and also based on whether members participate in the land use incentive program (please note that for litigation between LMCIT members, the coverage pays only one-half of the percentages described below, subject to a $500,000 maximum): Coverage for members that do participate in Coverage for members that don't participate in incentive incentive • 100%of first$25,000 • 85%of first$250,000 • 85%of next$225,000 • 60%of amounts above $250,000 • 60%of amounts above$250,000 • 50%of necessary legal fees members incur • 50%of necessary legal fees members incur prior to reporting litigation to LMCIT prior to reporting litigation to LMCIT • $1 million annual aggregate limit • $1 million annual aggregate limit 2 Small Cities Track-2011 Planning&Zoning 101-20