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for cities in this situation. I,MCIT can issue an endorsement to increase the city's coverage limit only <br /> for claims relating to that particular contract. There's a small charge for these "laser" endorsements.) <br /> There may be more than One Political Subdivision Covered Under the City's Coverage <br /> An HRA,EDA, or port authority is itself a separate political subdivision. If the city EDA, for <br /> example, is named as a covered party on the city's coverage and a claim were made that involved <br /> both the city and the EDA, theoretically the claimant might be able to recover up to$1,500,000 from <br /> both the city and the EDA, since there are two political subdivisions involved. Excess coverage is <br /> one way to provide enough coverage limits to address this situation. Another solution is for the HRA, <br /> EDA, or port authority to carry separate liability coverage in its own name. <br /> This issue of multiple covered parties can also arise is if the city has agreed by contract to name <br /> another entity as a covered party, or to defend and indemnify another entity. <br /> Cities Sometimes Carry Higher Coverage Limits Because of a Concern the Courts Might Overturn the <br /> Statutory Liability Limits <br /> However, those limits have now been tested and upheld several times in Minnesota. While it's <br /> always possible that a future court might decide to throw out the statutory limits,this is now less of a <br /> concern. <br /> Available Excess Liability Coverage Limits <br /> Excess coverage is available in $1 million increments, up to a maximum of$5 million. <br /> Does the Optional Excess Coverage Apply to All Types of Claims? <br /> No. The excess liability coverage does not apply to the following types of claims: certain limited <br /> pollution claims; mold claims; claims for failure to supply utilities;auto no-fault claims; uninsured/ <br /> underinsured motorist claims;workers' compensation, disability, or unemployment claims; or claims <br /> under the medical payments coverage. <br /> Who Needs Excess Liability Coverage? <br /> If anything, excess liability coverage is even more important to a small city rather than to a large city. <br /> If a city ends up with more liability than it has coverage,the city will have to either draw on existing <br /> funds or go to its taxpayers to pay that judgment. A large city faced with, say, a million dollars of <br /> liability over and above what its LMCIT coverage pays might be able to spread that$1 million cost <br /> over several thousand taxpayers. The small city by contrast might be dividing that same $1 million <br /> cost among only a couple hundred taxpayers. $1 million divided among 5,000 taxpayers is$200 <br /> apiece—annoying but probably at least manageable for most taxpayers. $1 million divided among <br /> 200 taxpayers is$5,000 apiece—enough to be a real problem for many. <br /> 3 <br />