Consider Waiving/Not Waiving Statutory Tort Limits

Purpose: The HRA is required to annually pass a resolution waiving or not waiving statutory tort limits of $500,000/$1,500,000 for its liability coverage.

The City of Ramsey annually renews its property, casualty and liability insurance coverage with the League of Minnesota Cities. A form is required to be filed for the City and HRA .

Attached is the Liability Coverage Waiver Form that is required to be signed after HRA approval of a resolution indicating whether the HRA chooses to waive or not waive the statutory tort limits. If the HRA were to waive the statutory limits, additional insurance would need to be purchased by the HRA to cover the increased liability. This increased liability has not currently been budgeted for, nor has the  HRA waived the tort limits in the past.
 
If the HRA was to consider waiving the tort limits and/or purchasing additional insurance coverage, staff would request rates for the increased coverage for 2014 and bring them back for consideration at a future regularly scheduled meeting of the HRA along with budget considerations.

Option #1: Not Waive the Statutory Tort Limits for League of Minnesota Cities Insurance Trust Liability Coverage for the HRA- $500,000/$1,500,000. An individual claimant would be able to recover no more than $500,000 on any claim to which the statutory tort limits apply. The total which all claimants for any single occurrence to which the statutory tort limits apply would be limited to $1,500,000.

Option #2: Waive the Statutory tort limits and not purchase excess liability coverage - $1,500,000/$1,500,000. An individual claimant would be able to recover up to $1,500,000 on a single occurrence, whereas the total of all claimants per single occurrence, would also be limited to $1,500,000 regardless of the number of claimants.

 Option #3: Waive the Statutory tort limits and purchase excess liability coverage. A single claimant could potentially recover an amount up to the limit of the coverage purchased. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage purchased, regardless of the number of claimants. As noted, this option is more expensive and is currently not budgeted for.

Liability coverage for Not-Waiving Statutory Tort Limits was included in the 2014 HRA Budget.

Staff recommends that the HRA adopt Option #1 Not Waiving the Statutory Tort Limits for Liability Coverage.

Adopt Resolution #HRA-13-12-219 Not Waiving the Statutory Tort Limits for League of Minnesota Cities Insurance Trust Liability Coverage for the HRA of the city of Ramsey.