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<br />If the statute limits our liability to 51,000,000 per occurrence, why would the city purchase <br />bighc.- coverage limits than that'! <br /> <br />There are several different reasons why cities should strongly consider carrying higher limits of <br />liability coverage. <br /> <br />1. The statutory tort limits either do not or may not apply to se\'eral types of claims. Some <br />examples include: <br /> <br />· Claims underfet/eral civil rights laws. These include Section 1983, the Americans with <br />Disabilities Act, etc. <br /> <br />· Claims for tort liability that the city has assumed hy contract. This occurs when a city <br />agrees in a contract to defend and indemnify a private party. <br /> <br />· Claims for actions in aI/other state. This might occur in border cities that have mutual <br />aid agreements ,vith adjoining states. or when a city official attends a national conference <br />or goes to Washington to lobby, elc. <br /> <br />. Claims based oJ/liquor sales. This mostly affects cities with municipal liquor stores, but <br />it could also arise in connection with beer sales at a fire relief association fund-raiser, for <br />example. <br /> <br />. Claims based on a "taking" theOl)'. Suits challenging land use regulations frequently <br />include an "inverse condemnation" claim, alleging that the regulation amounts to a <br />"taking" of the property. <br /> <br />2. LMCIT's primary liability coverage has annual limits on coverage for a few specific <br />risks. The table on page I lists the liability risks to which aggregate coverage limits apply. <br />If the city has a loss or claim in one of these areas, there might not be enough limits <br />remaining to cover the city's full exposure if there is a second loss of the same sort during the <br />year. Excess liability coverage gives the city additional protection against this risk as well. <br /> <br />However there are a couple of important restrictions on how the excess coverage applies to <br />risks that are subject to aggregate limits: <br /> <br />. The excess coverage does lIot apply to four risks: lead alld asbestosJailure to supply <br />utilities: mold: al/d "limited pollution" claims if either the pOllufa1l/ release or the <br />damage is below ground or ill a bOl(V of water; and <br /> <br />. The excess coverage does 1I0t al/fomQtic:ally apply to liquor liability unless the city <br />specifically requests il. <br /> <br />3. The city may be required b)' contl.act to carry higher coverage limits. Occasionally, a <br />contract might include a requirement that the city carry more than $1,000,000 of coverage <br />limits. Carrying excess coverage is a way to meet these requirements. (There.s also another <br /> <br />2 <br />