2.4. ERMUSR 05-10-2016 - Laserfiche WebLink

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4. Overlooked joint powers entities There have been a few instances where cities have inadvertently overlooked a joint powers entity of which they were members, and were left without coverage when the joint powers entity's activities led to claims against the joint powers entity and its member cities. To address this, LMCIT members have the right to have a limited amount of retroactive coverage issued to any joint powers entity of which the city is a member and which does not already have coverage in its own name. This coverage carries the same retroactive date and the same inception date as the city's own coverage. It will then protect the joint powers entity, its member political subdivisions, and their respective officers and employees for claims arising from the joint entity's activities, including claims that have already been made at the time the coverage is actually issued. In effect, this provision lets cities put in place, after the fact, the kind of coverage that should have been in place originally for the joint powers entity's activities. There are two important limitations on the retroactive coverage. • Retroactive coverage for joint powers entity liability carries a $200,000 annual aggregate limit, including defense costs. By contrast, standard See Section II.D,Coverage LMCIT coverage provides a$2 million per occurrence limit for most limits. claims,regardless of the number of claims per year. And for most claims, that$2 million per occurrence limit applies only to damages; defense costs are in addition to the limit. • The premium for the retroactive joint powers entity liability coverage is substantially higher than LMCIT's standard rates for many joint powers exposures. The premium for the retroactive coverage is the greater of LMCIT's standard rates or$5,000. J. Land use and special risk litigation Litigation relating to a city's land use regulation decisions, development and redevelopment activities, franchising, city enterprise operations, or debt obligations can be very expensive. For a city that's hit with this kind of litigation, the legal costs can be a significant financial burden. For this reason, LMCIT has created a specialized approach to cover these types of litigation. Compared to conventional liability insurance, a key difference of the LMCIT coverage is that litigation relating to these types of special litigation risks is covered regardless of whether the litigation includes a claim for damages. 1. Coverage terms LMCIT provides coverage for five broad classes of land use and special risk litigation, which is known as Coverage D in the LMCIT liability coverage document. 78