Laserfiche WebLink
CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />4. Other Information <br />A. Risk Management <br />The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of <br />assets; errors or omissions; injuries to employees; or natural disasters. The City participates in <br />the League of Minnesota Cities Insurance Trust (LMCIT) to provide its general liability and <br />property coverage. The LMCIT is a public entity risk pool currently operating as a common risk <br />management and insurance program for participating Minnesota Cities. All cities in the LMCIT <br />are jointly and severally liable for all claims and expenses of the pool. The amount of any liability <br />in excess of assets of the pool may be assessed to the participating cities if a deficiency occurs. <br />The City purchases commercial insurance for property values in excess of the LMCIT policy limits <br />and all other risks of loss. Settled claims have not exceeded the LMCIT or commercial coverage <br />in any of the past three fiscal years. <br />Worker's compensation insurance is also purchased through the League of Minnesota Cities <br />Insurance Trust (LMCIT). The worker compensation program is a retrospectively rated contract <br />with premiums or required contributions based primarily on the experience rates of the <br />participating cities. <br />There were no significant reductions in insurance coverage from the previous year or <br />settlements in excess of insurance coverage for any of the past three fiscal years <br />B. Commitments and Contingencies <br />Insurance: <br />The City has outstanding claims subject to its insurance deductible. Although the outcome of <br />these actions are not presently determinable, in the opinion of management, the resolution of <br />these matters will not have a material adverse effect on the financial condition of the City. <br />General Litigation: <br />Although the City is occasionally involved in litigation, management was unaware of any pending <br />lawsuits in which the City was involved as of December 31, 2015. It is the opinion of management <br />that any potential claim regarding any lawsuits against the City would be covered by the liability <br />insurance of the City and that any potential claim against the City would not materially affect the <br />financial statements. <br />54 <br />