3.5. SR 07-21-2008 - Laserfiche WebLink

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Republican National Convention JPA Page 4 The following is a brief summary of the policy: • $10 million limit of liability for each wrongful act. • $10 million aggregate limit (i.e., the most the policy will pay out is $10 million for any and all claims). • No deductible. • Occurrence policy (i.e., coverage for losses which occur during the policy period, regardless of when the claim is asserted) • The coverage is primary (the policy will respond to a claim before a city's LMCIT coverage applies, subject to the policy limits). • Defense costs are outside the liability limit (however, attorney fees or expenses awarded to a plaintiff would be subject to the limit). In terms of the coverage, it is important to look at the exclusions in Section V of the law enforcement policy. For example, the policy excludes coverage fora "willful violation...of any federal, state, or local statute, ordinance rule, or regulation" and any "dishonest, fraudulent, bad faith, criminal or malicious: [a]ct; [e]rror or [o]mission." It is easy to imagine that a claim might involve the above type of conduct. The terms of the policy seem to indicate that not only would a claim against a peace officer be excluded but more importantly, also a claim against the city. This language also seems to exclude any claim for punitive damages. It is our understanding that some of the terms of the policy are still open to negotiation. One factor that cities should consider is that municipal tort liability limits of $400,000 per claimant and $1,200,000 per occurrence would not apply to federal claims against a police officer, including claims of excessive force. In addition, cities should be aware that if a plaintiff is successful, the city could be ordered to pay a substantial award of attorney fees even if the actual damages awarded to the plaintiff are relatively small. The payment of a plaintiff's attorney fees would count toward the $10 million policy limit. If the $10 million limit of the law enforcement liability policy is exhausted, a city's LMCIT liability coverage would provide excess coverage. In other words, a city's LMCIT coverage would respond to a claim against the city or a city's police officer that arose from the officer's actions during the RNC. Such a claim would be subject to the city's deductible and LMCIT coverage limits. In addition, the claim would affect a city's experience rating. The experience rating formula used by LMCIT looks at a city's past loss experience as a way to project the city's future losses. The experience rating will then be used to determine future premiums. A claim could also affect the amount of a dividend that is returned to a city by LMCIT. A dividend is only returned when there are unneeded surplus funds. There is never a guarantee that LMCIT will be able to return a dividend in any given year.