2.7. ERMUSR 06-11-2013 - Laserfiche WebLink

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What's the Effect of Walvin the Per Claimant Statutory Liability Limit? If the city chooses the"waiver"pfiort,lhe city and LMCIT no longer can use the statutory limit of $500,000 per claimant as a defense. Because the waiver increases the exposure,the premium is roughly 3%higher for coverage under the waiver option, If the city waives the statutory limit, an individual claimant could therefore recover up to$1,500,000 in damages on a claim. Of course, the individual would still have to prove to the court or jury that s/he really does have that amount of damages. Also,the statutory limit of$1,500,000 per occurrence would still apply; that would limit the individual's recovery to a lesser amount if there were multiple claimants. Why Would the City Choose to Pay More to Get Waiver-Option Coverage? The statutory liability limit only comes into play in a case where • The city is in fact liable. MUM • The injured party's actual proven damages are greater than the statutory limit. The waiver option coverage does not give the city better protection. The Very literally,applying the statutory liability limit means benefit is to the Injured party. an injured party won't be fully compensated for his/her actual, proven damages that were caused by city negligence. Some cities as a matter of public policy may want to have more assets available to compensate their citizens for injuries caused by the city's negligence. Waiving the statutork ability limits is a way to do that. Other cities may feel that the apprdp idtq policy is to minimize the expenditure of the taxpayers' funds by taking full advantage of eVery p btection the legislature has decided to provide. There's no right or wrong answer on this point. It's a discretionary question of city policy that each city council needs to decide for itself, For claims the statutory tort liability limits don't apply to, it doesn't affect how the city's coverage or risk on those claims. Waiving the statutory tort limits has no effect on claims the statutory limits don't apply to. Effects of Waiving the Statutory Limits if there is Excess Coverage If the city has$1 million of excess coverage and chooses to waive the statutory tort limits,the claimants(whether it's one claimant or several)could then potentially recover up to$2.5 million in damages in a single occurrence. If the city carries higher excess coverage limits,the potential maximum recovery per occurrence is correspondingly higher. Carrying excess coverage under the waiver option is a way to address an issue that some cities find troubling: the case where many people are injured in a single occurrence caused by city negligence. Suppose, for example, that a city vehicle negligently runs into a school bus full of kids,causing multiple serious injuries. $1,500,000 divided 50 ways may not go far toward compensating for those A' I 4