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HomeMy WebLinkAboutInsurance Policy 2005/2006 ENDORSEMENT#2 December 15, 2005 MG COVERED PARTY COVENANT NUMBER EFFECTIVE DATE OAK PARK HEIGHTS CMC 26394 12/01/05 IT IS HERE BY UNDERSTOOD AND AGREED THAT COMMON COVERAGE DECLARATIONS FORM DEC-011 (11/86)(Rev.11/03) IS AMENDED TO READ: Item 4. COVERAGE PARTS: EQUIPMENT BREAKDOWN COVERED IT IS FURTHER AGREED THAT MUNICIPAL PROPERTY, CRIME, BOND and EQUIPMENT BREAKDOWN DECLARATIONS FORM DEC-012(11-86)(Rev.11/04) IS AMENDED TO READ: EQUIPMENT BREAKDOWN LIMIT; $ 6.244.072. DEDUCTIBLE: .$ 500. ANY ONE ACCIDENT Item 16. COVERAGE PARTS, FORMS,SCHEDULES AND ENDORSEMENTS APPLICABLE TO THIS COVERAGE. ME063(11/01) PM-100 j11/03} BM-200(11/04) BM-212(11/01) p _. TOTAL ENDORSEMENT PREMIUM $ 762. ® ADDITIONAL PREMIUM ❑ RETURN PREMIUM (See Below for Billing Info.) (DO NOT PAY) ❑ PREMIUM ADJUSTMENT TO BE MADE NOW (See Invoice) OR ❑ PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATION All other terms and conditions remain unchanged. PR .597 Executive Director, LMCIT LMCIT Page 1 of 1 ME044(1-95)(Rev.11.00) 431 -OS?4 9T0/T00lj ZYd SI'OT a3M 9002/80/C0 EQUIPMENT BREAKDOWN COVERAGE FORM Various provisions in this covenant restrict coverage. Read the entire covenant carefully to determine rights, duties, and what is or is not covered. Words and phrases that are in italics have special meaning. Refer to Section G•DEFINITIONS, except for accident and covered equipment,which are defined in A.1.a. and b. below. A. COVERAGE 1. Covered Cause of Loss The insurance provided by this Coverage Part applies to the direct result of an accident to covered equipment. a. Accident means direct physical loss as follows; (1) Mechanical breakdown, including rupture or bursting caused by centrifugal force; (2) Artificially generated electrical current, including electrical arcing, that disturbs electrical devices, appliances or wires; (3) Explosion of steam boilers, steam piping, steam engines or steam turbines owned or leased by Y ou, or operated under your control; b (4) Loss or damage to steam boilers, steam pipes, steam engines or steam turbines caused by or resulting from any condition or event inside such equipment; or (5) Loss or damage to hot water boilers or other water heating equipment caused by or resulting from any condition or event inside such boilers or equipment. b. Covered equipment,unless specified otherwise in the Declarations, means: (1) Any property built to operate under vacuum or pressure, other than weight of contents; or (2) Any property, other than excluded electrical generating equipment, used for the generation, r _. transmission,or utilization of energy. Such property must be at a location described in the Declarations and must be owned or leased by you or operated under your control, except as specifically provided for under Service Interruption coverage and the Service Interruption component of other cbvrages. 2. Coverages Provided expenses to the extent•that they The following coverages are provided. do not exceed the amount of g otherwise would have occur during loss that The accident must 9 the been payable under this Covenant Period,but expiration of the coverage. covenant does not limit our liability. (c) We will consider the actual experience of your business a. Property Damage before the accident and the We will pay for direct damage to covered probable experience you would Y p property. have had without the accident in determining the amount of our b. Business Income and Extra Expense payment. (1) Business Income (d) This coverage ends 60 days (a) We will pay your actual loss of after the date the damaged business income that results property is repaired or replaced. directly from the necessary total (2) Extra t Expense or partial interruption of your We will pay the reasonable extra business. expense to operate your business (b) We will also pay any necessary during a total or partial interruption expenses you incur to reduce of business. the amount of loss under this coverage. We will pay for such LMCIT BM-200{11/01)(Rev.11/04) Page 1 of 12 9tO/C0011 %V3 St:07 QOM 900Z/80/C0 c. Service Interruption f. Demolition and ICC(Increased Cost (1) Any insurance provided for Business of Construction) Income and Extra Expense If an accident to covered equipment coverage is extended to apply to damages a building that Is covered loss as qualified below. property, and the loss is increased by (2) The covered equipment is owned by a enforcement of any ordinance or law in (a) Utility, force at the time of the accident that Landlord, regulates the construction or repair of (b) , or buildings, or establishes zoning or land (c) Other supplier use requirements, we will pay for the with whom you have a contract to following additional costs to comply with provide you with any of the following such ordinance or law: services: electrical power, (1) Your actual expenditures for the communications,waste disposal, air cost to demolish and clear the site of conditioning, refrigeration, heating, undamaged parts. gas, air,water or steam. (2) Your actual expenditures for The most we will pay for loss or damage increased costs to repair, rebuild, or under this coverage is$100,000. construct the building. If the building is repaired or rebuilt, it must be d. Perishable Goods intended for similar use or . (1) We will pay for your loss of occupancy as the current building, perishable goods due to spoilage. unless otherwise required by zoning (2) We will also pay for such loss or land use ordinance or law. caused by an accident to covered (3) Your loss as described in Business equipment owned by a Income and Extra Expense coverage caused by loss covered in (a) Utility, (1)or(2) above. (b) Landlord,or We will not pay for: _. (c) Other supplier (4) Any fine; with whom you have a contract to (5) Any liability to a third party; provide you with any of the following (6 'Any increase in loss due to a services: electrical ower, p pollutant; or communications, waste disposal, air conditioning,refrigeration,heating, (7) increased construction costs until gas, air,water or steam. the building is actually repaired or (3) We will also pay for your loss of replaced. perishable goods due to The most we will pay for loss or damage contamination from the release of under this coverage is $100,000. refrigerant, including but not limited to ammonia. g Expediting P Ex editin Expenses (4) We will also pay any necessary With respect to your damaged covered expenses you incur to reduce the property, we will pay the reasonable amount of loss under this coverage. extra cost to: We will pay for such expenses to the (1) Make temporary repairs; and extent that they do not exceed the (2) Expedite permanent repairs or amount of loss that otherwise would permanent replacement. have been payable under this p p coverage. The most we will pay for loss or damage The most we will pay for loss or damage under this coverage is $100,000. under this coverage is $100,000. h. Pollutants G. Data Restoration We will pay for the additional cost to We will pay for your cost to research, repair or replace covered property re lace and restore data, including because of contamination by a pollutant. p programs and operating systems. The This includes the additional expenses to most we will pay for loss or damage clean up or dispose of such property. under this coverage is $100,000. Additional costs mean those beyond LMCIT BM-200(11/01)(Rev.11/04) Page 2 of 12 9T0/1,002] IVA St:Oi au 900Z/80/£0 what would have been required had no you alleging that you are liable for pollutant been involved. damage to property of another in We will also pay for additional loss as your care, custody or control,that described in Business income and Extra was directly caused by an accident Expense, and Perishable Goods to covered equipment, we will either: coverages caused by such (a) Settle the claim or suit, or contamination. (b) Defend you against the claim The most we will pay for loss or damage or suit but keep for ourselves under this coverage is$100,000. the right to settle it at any point. CFC Refrigerants (2) We will pay,with respect to any We will pay for the additional cost to claim or suit we defend: repair or replace covered property (a) All expenses we incur; because of the use or presence of a (b) The cost of bonds to release refrigerant containing CFC attachments. we do not have to (chlorofluorocarbon)substances. This furnish these bonds; means the additional expense to do the (c) All reasonable expenses least expensive of the following: incurred by you at our request to (1) Repair the damaged property and assist us in the investigation or replace any lost CFC refrigerant; defense of the claim or suit, (2) Repair the damaged property, including actual loss of earnings retrofit the system to accept a non- up to $250 a day because of CFC refrigerant and charge the time off from work; system with a non-CFC refrigerant; (d) All costs taxed against you in or any suit we defend; (3) Replace the system with one using a (e) Prejudgment interest awarded non-CFC refrigerant. against you on that part of the _ Additional costs mean those beyond judgment we pay. If we make what would have been required had no an offer to pay the applicable CFC refrigerant been involved. limits,we will not pay any We will also pay for additional loss as • ' prejudgment interest based on described in Business Income and Extra that period of time after the Expense, and Perishable Goods offer; and coverages caused by such loss. (f) All interest on the full amount of The most we will pay for loss or damage any judgment that acciues after under this coverage is $100,000. entry of the judgment and before we have paid.offered to pay,or j. Ice Rink Buried Piping deposited in court the part of the We will pay for loss or damage caused judgment that Is within the p Y 9 applicable limits. by or resulting from an accident to burled piping at an ice rink. The most m. Mold we will pay under this coverage Is $50,000. (1) We will pay for loss, damage or expense caused by mold, only when k. Newly Acquired Locations mold is the direct result of an accident to covered equipment that All coverages provided by this Coverage occurs during the policy period. This Part are extended to a newly acquired includes, but is not limited to, costs location that you have purchased or arising from clean up, removal, or leased. abatement of such mold. As used in this coverage, the term I. Defense loss or damage means: This coverage is automatically included (a) Direct physical loss or damage and does not need to be indicated in the to covered property caused by Declarations. mold including the cost of (1) if a claim or suit is brought against removal of the mold; LMCIT BM-200(11/01)(Rev.11/04) Page 3 of 12 9TO/S00IJ XVd 9Y:OT aaM 900Z/80/CO (b) The cost to tear out and replace results, we will pay for that resulting loss any covered property as needed or damage. to gain access to the mold; b. The enforcement of any ordinance, law, (c) The cost of testing performed regulation, rule or ruling regulating or after removal, repair, restricting repair, replacement, replacement or restoration of alteration, use, operation, construction the damaged property is or installation, except as provided under completed, provided there is a the following coverages: Demolition and reason to believe that mold is ICC, Pollutants or CFC Refrigerants. present; and c. Any earth movement, including but not (d) Additional loss as described in limited to earthquake, subsidence, Business Income and Extra sinkhole collapse, landslide, mudslide, Expense coverages caused by earth sinking, tsunami or volcanic action. such loss. d. Flood, surface water,waves,tides,tidal (2) The most we will pay for loss or waves, overflow of any body of water, or damage under this coverage is their spray, all whether driven by wind or $1,000,000. Regardless of the not. number of claims,the most we will However, if electrical covered equipment pay for the total of all loss or requires drying out because of the damage arising out of all accidents above, we will pay for the direct to covered equipment which take expenses of such drying out,subject to place within the 12-month period the applicable Property Damage limit starting with the beginning of the and deductible. present annual policy period is e. Windstorm or hail. $1,000,000.With respect to a However, we will pay if: particular accident which results In mold, we will not pay more than a (1) Covered equipment located within a total of$1,000,000 even if the mold building or structure suffers an continues to be present or active or accident that results from rain, recurs in a later policy period. snow, sand or dust; and (3) The coverage provided under this (2) The building or structure did not first Mold Coverage does not increase r sustain wind or hail damage to its the Equipment Breakdown Limit on roof or walls through which the rain, any covered property. If a particular snow, sand or dust entered. occurrence results in loss or f. Nuclear reaction or radiation,or damage by mold,and other loss or radioactive contamination, however damage, we will not pay more,for caused. the total of all loss or damage,than g. War, including undeclared or civil war; the Equipment Breakdown Limit on Warlike action by a military force, the affected covered property. including action in hindering or If there is covered loss or damage to defending against an actual or expected covered property not caused by attack, by any government, sovereign or mold, toss payment will not be other authority using military personnel limited by the terms of this or other agents; or coverage, except to the extent that Insurrection, rebellion, revolution, mold causes an increase in the loss. usurped power or action taken by Any such increase in the loss will be governmental authority in hindering or subject to the terms of this defending against any of these. coverage. h. Fire or combustion explosion,whether or not caused by or resulting from an B. EXCLUSIONS accident. 1. We will not pay for loss or damage caused i. Any of the following tests: by or resulting from: (1) A hydrostatic, pneumatic or gas a. Depletion, deterioration, corrosion, pressure test of any boiler or erosion,wear and tear, or other pressure vessel; or gradually developing conditions. (2) An insulation breakdown test of any But if loss or damage from an accident type of electrical equipment. LMCIT$M-200(11/01)(Rev.11(04) Page 4 of 12 9T0/900 i %V'd 91,:OT OM 800Z/80/CO j. Water or other means used to extinguish cause of loss is provided by another a fire, even when such an attempt is coverage part or policy of insurance you unsuccessful. have. k. Any of the following causes of loss: (1) Lightning, Explosion (except for 4. With respect to Perishable Goods coverage, steam or centrifugal explosion); we will also not pay for loss or damage as a Smoke, Aircraft or Vehicles, Riot or result of your failure to use all reasonable Civil Commotion,Vandalism or means to protect the perishable goods from Sprinkler Leakage; damage following an accident. (2) Breakage of Glass, Falling Objects, Weight of Snow, Ice or Sleet or 5. We will also not pay for loss or damage Water Damage(including Water caused by or resulting from any defect, Damage that is the result of art programming error, programming limitation, accident): or virus, loss of data,loss of access, loss of (3) Freezing (caused by cold weather), use,loss of functionality or other condition Collapse or Molten Material. within or involving data or media of any kind. 1. The presence, growth, proliferation, But if loss or damage from an accident spread or activity of mold. This includes, results, we will pay for that resulting loss or but is not limited to, costs arising from damage. clean up, removal, or abatement of such mold. However, if an accident occurs, 6. None of the following is covered equipment: we will pay the resulting loss or damage. a. Structure,foundation,cabinet, This exclusion does not apply: compartment, or air supported structure (1) to spoilage of personal property that or building; is perishable goods, to the extent b. insulating or refractory material; that spoilage is covered under c. Sewer piping, underground vessels or Perishable Goods coverage;or piping, or piping forming a part of a (2) to the extent that coverage is sprinkler system, except as provided -• provided under Mold coverage for under Ice Rink Buried Piping coverage; that portion of any loss or damage d. Water piping other than boiler feed water resulting from the presence,growth, , piping, boiler condensate return piping or proliferation, spread or activity of water piping forming a part of a mold as a result of an accident to refrigerating or air conditioning system: 9 g 9 Y covered equipment. e. Vehicle, aircraft,floating vessel or any equipment mounted on such vehicle, 2. With respect to Business Income, Extra aircraft or floating vessel. However, any Expense and Service interruption property that is stationary, permanently coverages, we will also not pay for: installed at a covered location and that a. Loss caused by your failure to use due receives electrical power from an diligence and dispatch and all external power supplier will not be reasonable means to resume business considered a vehicle, aircraft or floating at the described location; vessel; b. That part of any loss that is due solely to f. Dragline, excavation or construction the suspension, lapse or cancellation of equipment; a contract following an accident g. Equipment manufactured by you for extending beyond the time business sale; or income is applicable; or h. Electronic data processing equipment, c. Delay in resuming operations due to the unless used to control or operate need to reconstruct or re-input data or covered equipment. Electronic Data programs on media. Processing Equipment includes programmable electronic equipment that 3. With respect to Service interruption is used to store, retrieve and process coverage and paragraph (2)of Perishable data; and associated peripheral Goods coverage, we will also not pay for equipment. loss caused by or resulting from any of the causes of loss named in Exclusion 1.k. 7. Covered property does not include live above, whether or not coverage for such animals. LMCIT BM-200(11/01)(Rev.11/04) Page 5 of 12 9TO/L001j %v3 L17:0T Q3M 9002/80/£0 C. LIMITS OF INSURANCE 2. We will not pay for loss or damage resulting Any payment made under this Coverage Part will from any one accident until the amount of not be increased if more than one city is shown loss or damage exceeds the applicable in the Declarations. deductible or deductibles shown in the if two or more limits apply to the same portion of Declarations. We will then pay the amount of a loss, we will only pay the smaller limit for that loss or damage in excess of the applicable portion of the loss. deductible or deductibles, subject to the applicable limits shown in the Declarations. 1. Equipment Breakdown Limit The most we will pay for loss or damage E. LOSS CONDITIONS arising from any one accident is the amount The following conditions apply In addition to the shown as the Equipment Breakdown Limit in Common Covenant Conditions: the Declarations. This total limit applies to all coverages under this Coverage Part except 1. Abandonment Defense. The costs we incur under the There can be no abandonment of any Defense coverage shall not reduce the property to us. available Equipment Breakdown Limit. 2. Appraisal 2. Coverage Limits If we admit liability for a loss and we and you The limit of your insurance under each of the disagree on the value of the property or coverages from loss or damage arising from business income, either may make written any one accident is the amount shown for demand for an appraisal of the loss. In this that coverage. Unless otherwise shown event, each party will select a competent below, these limits are a part of, and not in and impartial appraiser. The two appraisers addition to, the Equipment Breakdown Limit. will select an umpire. If they cannot agree, either may request that selection be made 3. Business Income and Extra Expense Limit by a judge of a court having jurisdiction. The The limit of your insurance for Business appraisers will state separately the value of Income and Extra Ex erase covers es Is the property or business income. If they?ail -' P g $5,000,000. This limit Is in addition to the to agree, they will submit their differences to Equipment Breakdown Limit. the umpire. A decision agreed to by any two willbetbinding. Each party will: 4. Newly Acquired Locations Limit a. Pay Its chosen appraiser, and b. Bear the other expenses of the appraisal The limit of your insurance for Newly and umpire equally. Acquired Locations coverage is $5,000,000. This limit is in addition to the Equipment Breakdown Limit. 3. Brands and Labels However, any newly acquired location that If branded or labeled merchandise that is has covered electrical generating equipment covered property is damaged by an accident must be reported to us within 90 days after to covered equipment, but retains a salvage you have purchased or leased the location value, you may, at your expense: and will be subject to the terms and a. Stamp the word SALVAGE on the conditions as determined by us. merchandise or its containers if the stamp will not physically damage the D. DEDUCTIBLE merchandise; or 1. If deductibles vary by type of covered b. Remove the brands or labels, if doing so equipment and more than one type of will not physically damage the 1 must re-label the equipment is involved in any one merchandise. You abet e accident, the highest deductibles will apply. merchandise or Its containers to comply Unless otherwise shown In the Declarations, with the law. We will pay for any reduction in value of the the Deductibles apply to all loss or damage • salvage merchandise resulting from either of covered by this Coverage Part. Defense Coverage is not subject to a these two actions. deductible, If a Brands and Labels Limit is shown on the Declarations, we will not pay more than the indicated amount for coverage under this Condition. LMCIT BM-200(11/01)(Rev.11/04) Page 6 of 12 9T0/9001j xva Lt:OT aaM 900Z/80/CO 4. Duties In the Event of Loss or Damage reasonable amount of time does not You must see that the following are done in necessarily end when the operations are the event of loss or damage: resumed; a. Give us prompt notice of the loss or c. Using merchandise or other property damage. Include a description of the available to you; property involved; d. Using the property or services of others; or b. As soon as possible, give us a e. Salvaging the damaged property. description of how,when and where the loss or damage occurred; 6. Salvage and Recoveries c. Allow us a reasonable time and When, in connection with any loss under this opportunity to examine the property and Coverage Part, any salvage or recovery is premises before repairs are undertaken received subsequent to the payment of such or physical evidence of the accident is loss,the loss shall be refigured on the basis removed. But you must take whatever on which it would have been settled had the measures are necessary for protection amount of salvage or recovery been known from further damage; at the time the loss was originally d. Permit us to inspect the property and determined. Any amounts thus found to be records.Also permit us to take samples due either party from the other shall be paid of damaged and undamaged property promptly. for inspection, testing and analysis; e. If requested, permit us to question you 7. Valuation under oath, at such times as may be a. Our payment for damaged covered reasonably required about any matter property will be the smallest of: relating to this insurance or your claim (1) The cost to repair the damaged including your books and records. In property; such event,your answers must be (2) The cost to replace the damaged signed; f. Send us a signed, sworn proof of loss property on the same site; or containing the information we request to (3) The amount you actually spend that settle the claim. You must do this within is necessary to repair or replace the 60 days after our request; damaged.property. g. Cooperate with us in the investigation b.' Eicept as described under f. below,you must pay the extra cost of replacing and settlement of the claim; h. Promptly send us any legal papers or damaged property with property of a P Y Y 9 P P better kind or quality or of a different size notices received concerning the loss or or capacity. damage; and c. If you do not repair or replace the i. Make no statement that will assume any damaged property within 24 months obligation or admit any liability, for any after the date of the accident, then we loss or damage for which we may be will pay only the smaller of the: liable,without our consent. (1) Cost it would have taken to repair at We may examine any city under oath, while the time of the accident; or not in the presence of any other city and at (2) Actual cash value; at the time of the such times as may be reasonably required, accident. about any matter relating to this coverage or the claim, including a city's books and d. If any of the following conditions are records. In the event of an examination, a met, property held by you for sale will be city's answers must be signed. valued at the sales price as if no loss or damage had occurred, less any 5. Reducing your Loss discounts and expenses you otherwise You must reduce your loss, if possible, by: would have had: (1) The property was manufactured by a. Resuming business, partially or you; completely; b. Making up lost business within a (2) The sales price of the property is 9 P less than the replacement cost of reasonable amount of time. This includes the property; or working extra time or overtime at the location of loss or at another location.The (3) You are unable to replace the property before its anticipated sale. LMCIT BM-200(11/01)(Rev.11/04) Page 7 of 12 9T0/60021 XVd LP:OT Q3M 9002/e0/CO e. The most we will pay for loss or damage this Coverage Part as an additional city, we arising from any one accident is the will consider them to be a city under this amount shown as the Equipment Coverage Part only to the extent of their Breakdown Limit in the Declarations.This interest. total limit applies to all coverages under this Coverage Part except Defense.The 2. Bankruptcy costs we incur under the Defense The bankruptcy or insolvency of you or your coverage shall not reduce the available estate will not relieve us of any obligation Equipment Breakdown Limit except as under this Coverage Part. specifically provided for under Data Restoration Coverage, data and media 3. Concealment, Misrepresentation or Fraud will be valued on the following basis: We will not pay for any loss if you or any (1) For mass-produced and other city at any time intentionally conceal or commercially available software, at misrepresent a material fact concerning: the replacement cost. a. This Coverage Part; (2) For all other data and media, at the cost of blank material for reproducing b. The covered property, the records.This includes data c. Your interest in the covered property, or representing financial records. We d. A claim under this Coverage Part. will not pay based on their face value. f. Environmental, Safety and Efficiency 4. Jurisdictional Inspections Improvements If any covered equipment requires inspection if covered equipment requires to comply with state or municipal boiler and replacement due to an accident, we will pressure vessel regulations, we agree to P pay your additional cost to replace with perform such inspection on your behalf. equipment that is better for the environment, safer or more efficient than 5. Legal Action Against Us • the equipment being replaced. No one may bring a legal action against-us -• However, we will not pay more than under this Covenant unless: 125%of what the cost would have been a. There has been full compliance with all to repair or replace with like kind and quality.This coverage does not increase . the.temis of this Covenant; and any of the applicable limits. This b. The action is brought within two years coverage does not apply to any property after the date of the accident or indicated as being valued on an Actual c. We agree in writing that you have an Cash Value basis. obligation to pay for damage to'covered g. In any event. we will not pay more than property of others or until the amount of the following, whichever is the least: that obligation has been determined by (1) Your financial interest in the covered final judgment or arbitration award. No property, one has the right under this Covenant to (2) 150% of the estimated replacement bring us into an action to determine your O liability. cost of the covered property as stated in the Schedule of Covered Property, or 6. Loss Payable (3) The Actual Cash Value of the a. We will pay you and the loss payee covered property, if the covered shown in the Declarations for loss by this Coverage Part, as property is vacant property. covered y 9 interests may appear.The insurance However, any amounts paid for covers the interest of the loss payee coverages as provided by A. Coverages, unless the loss results from conversion, 2.b.-2.j. are in addition to these secretion or embezzlement on your part. limitations. b. We may cancel the covenant as allowed F. ADDITIONAL CONDITIONS by the Cancellation Condition. Cancellation ends this agreement as to The following conditions apply in addition to the the loss payee's Interest. If we cancel, Common Conditions: we will mail you and the loss payee the 1. Additional Covered Party same advance notice. If a person or organization is designated in LMCIT BM-200(11/01)(Rev.11/04) Page 8 of 12 9T0/OT012] Xva S ?:OT 11M 900Z/80/C0 c. If we make any payment to the loss cancellation if we cancel for your payee, we will obtain their rights against nonpayment of premium; or any other party. (2) 30 days before the effective date of cancellation if we cancel for any 7. Mortgage Holders other reason. a. The term mortgage holder includes g. if we elect not to renew this covenant, trustee. we will give written notice to the b. We will pay for direct damage to covered mortgage holder at least 10 days before property due to an accident to covered the expiration date of this covenant. equipment to you and each mortgage h. If we suspend coverage, it will also be holder shown in the Declarations in their suspended as respects the mortgage order of precedence, as interests may holder. We will give written notice of the appear. suspension to the mortgage holder. c. The mortgage holder has the right to receive loss payment even if the 8. Other insurance mortgage holder has started foreclosure a. You may have other insurance subject or similar action on the covered property. to the same plan, terms, conditions and d. If we deny your claim because of your provisions as the insurance under this acts or because you have failed to Coverage Part. If you do, we will pay our comply with the terms of this Coverage share of the covered loss or damage. Part, the mortgage holder will still have Our share is the proportion that the the right to receive loss payment if the applicable limits under this Coverage mortgage holder: Part bear to the Limits of insurance of all (1) Pays any premium due under this insurance covering on the same basis, Coverage Part at our request if you b. If there is other insurance covering the have failed to do so; same toss or damage, other than that (2) Submits a signed, sworn proof of described in (a)above, we will pay only loss within 60 days after receiving the amount of covered loss or damaged. notice from us of your failure to do in excess of the amount due from that so, and other insurance, whether you can collect (3) Has notified us of any change in on it or not. • ownership or material change in risk In notase will we pay more than the known to the mortgage holder. applicable limits. All of the terms of this Coverage Part will then apply directly to the mortgage holder. 9. Coverage Period, Coverage Territory e. If we pay the mortgage holder for any loss Under this Coverage Part: and deny payment to you because of your a. The accident must occur: acts or because you have failed to comply (1) During the Coverage Period shown with the terms of this Coverage Part: in the Declarations; and (1) The mortgage holder's right under (2) Within the Coverage Territory. the mortgage will be transferred to us to the extent of the amount we b. The Coverage Territory is: pay; and (1) The United States of America (2) The mortgage holder's right to recover (including its territories and the full amount of the mortgage possessions); holder's claim will not be impaired. (2) Puerto Rico;and At our option, we may pay to the (3) Canada. mortgage holder the whole principal on the mortgage plus any accrued Interest. 10. Privilege to Adjust with Owner in this event,your mortgage and note In the event of loss or damage involving will be transferred to us and you will pay property of others in your care, custody or your remaining mortgage debt to us. control, we have the right to settle the loss or f. If we cancel this covenant, we will give damage with respect to such property with written notice to the mortgage holder at the owner of the property.A receipt for least: payment from the owners of that property (1) 10 days before the effective date of will satisfy any claim of yours. IMCiT BM-200(11/01)(Rev.11/04) Page 9 of 12 9T0/TTOIj Xd3 at:OT aat 900Z/80/C0 11. Suspension e. We will return premium to you if a Whenever covered equipment is found to be location with replacement cost values of in, or exposed to, a dangerous condition, greater than $5,000,000 Is deleted any of our representatives may immediately during the Covenant Period. suspend the coverage against loss from an accident to that covered equipment. This G. DEFINITIONS cart be done by delivering or mailing a 1. Accident is defined in A.1.a., COVERAGE - written notice of suspension to: Covered Cause of Loss. a. Your last known address;or b. The address where the covered 2. Boilers and Vessels means: equipment is located. a. Any boiler, Including attached steam, Once suspended in this way, your coverage condensate and feed water piping;and can be reinstated only by an endorsement b. Any fired or unfired pressure vessel for that covered equipment. subject to vacuum or internal pressure If we suspend your coverage,you will get a other than the static pressure of its pro rata refund of premium for that covered contents. equipment. But the suspension will be This term does not appear elsewhere in this effective even if we have not yet made or • coverage form, but may appear in the offered a refund. Declarations. - 12. Transfer of Rights of Recovery Against 3. Business Income means the sum of: Others to Us a. The Net Income (net profit or loss before If any person or organization to or for whom income taxes)that would have been we make payment under this Coverage Part earned or incurred; and has rights to recover damages from another, b. Continuing normal operating expenses those rights are transferred to us to the incurred,including employee payroll. extent of our payment.That person or organization must do everything necessary 4, City means governmental body or entity first to secure our rights and must do nothing named in the Declarations. For purposes of after loss to impair them. But you may waive this coverage, city includes relief your rights against another party in writing: assoctitions. Unless specifically named in a. Prior to a loss to your covered property. the Declarations, city shall not include: b. After a loss to your covered property a. Gas, electrical, or team utilities only if, at time of loss, that party is one of commission; the following: b. Port authority, housing and (1) Someone insured by this insurance; or redevelopment authority, economic (2) A business firm: development authority, area or municipal (a) Owned or controlled by you;or redevelopment authority, or similar (b) That owns or controls you. agency. c. Municipal power agency; 13. Premiums and Premium Adjustments d. Municipal gas agency; a. You agree to furnish us with a schedule e. Hospital or nursing home board or of locations prior to the beginning of commission; each Covenant Period. f. Airport commission; b. These schedules must include all g. Welfare or public relief agency; locations that were covered by your prior h. School board;or covenant but were not described in the i. Joint power entities. Schedule of Covered Property. c. The initial annual premiums will be 5. Covered Equipment is defined in A.1.b., based upon these schedules and the COVERAGE-Covered Cause of Loss. appropriate replacement cost values. d. You will pay us additional premium if a 6. Covered Electrical Generating Equipment new location with replacement cost means: values of greater than $5,000,000 is a, Engine generators, but only if you do not added during the Covenant Period. own a steam, gas, water or wind turbine; LMCIT BM-200(11Io1)(Rvv.11/04) Page 10 of 12 9T0/ZTO2 %V3 617:0T au 9002/80/CO b. Electrical transformers, switchgear and (1) Boilers used primarily to provide power lines used to convey the steam for one or more turbine- generated electricity;and generator units; c. Associated equipment necessary for the (2) Turbine-generators (including operation of any of the equipment listed steam, gas,water, or wind turbines); in a. and b, above. (3) Engine-generators, but only if you also own a steam, gas, water, or 7. Covered Property means property that: wind turbine; a. You own; or (4) Fuel cells or other alternative b. Is in your care, custody or control and electrical generating equipment; for which you are legally liable while at a (5) Electrical transformers, switchgear location described in the Declarations. and power lines used to convey the But, covered property does not Include generated electricity; and excluded electrical generating equipment. (6) Associated equipment necessary for the operation of any of the 8. Data means information or instructions equipment listed in (1)through (5) stored in digital code capable of being above. processed by machinery. b. Excluded Electrical Generating 9. Employee means: Equipment does not mean: a. A person whom you compensate directly (1) Elevator or hoist motors that by salary,wages or commission, and generate electricity when releasing who you have the right to direct or cable; or control while performing duties for you; (2) Equipment intended to generate b. Member of the city council; electricity solely on an emergency, c. Member of a city board, commission, or back-up basis. committee which is not excluded by the P -. definition of city; 11. Extra Expense means the additional cost d. Elected or appointed official of the city, you incur to operate your business during e. Volunteer person or organization while the interruption over and above the cost that g normtrly would have been incurred to acting on behalf of the city and subject operate the business during the same period to the city's direction and control; had no accident occurred. f. Other authorized person or agent of the city while acting on behalf of the city,but 12. Joint Power Entity means an operating excludes independent contractors; entity created by two or more governmental g. City relief association members, officers, units entering into an agreement as provided and employees;or by statute for the joint exercise of h. Any natural person employed by an governmental powers. An intergovernmental employment contractor while that person agreement will be deemed to create a joint is subject to your direction and control powers entity if the agreement establishes a and performing services for you board with the effective power to do any of excluding, however, any such person the following, regardless of whether the while having care and custody of specific consent of the constituent property outside the premises. governmental units may also be required: But employee does not mean any agent, a. To receive and expend funds; broker,factor, commission merchant, b. To enter into contracts; consignee, independent contractor or c. To hire employees; representative of the same general d. To purchase or otherwise acquire or character. hold real or personal property; or pro P 10. Excluded Electrical Generating e. To sue or be sued. Equipment means: a. Equipment which converts any other 13. Media means all forms of electronic, form of energy into electricity. This magnetic and optical tapes and discs for use includes, but is not limited to,the in any electronic computer or electronic data following: processing equipment. LMCIT BM-200(11/01)(Rev.11/04) Page 11 of 12 9TO/Ct0Lj %V3 6P OT Q3M 900g/90/CO 14. Mold means any mold, fungus,mildew or 24. We means the League of Minnesota yeast, including any spores or toxins Insurance Trust. produced by or emanating from such mold, fungus, mildew or yeast. 25. Vacant property means: a. Covered property is deemed to be 15. One Accident means: vacant property If for a period of 60 If an initial accident causes other accidents, consecutive days less than 31% of the all will be considered one accident. All covered property square footage is accidents that are the result of the same either used by the city for customary event will be considered one accident. operations or is leased out. b. Covered property rented or leased to the 16. Our means the League of Minnesota city is deemed to be vacant property if insurance Trust. for a period of 60 consecutive days the covered property does not contain 17. Perishable Goods means any covered enough property to conduct customary property subject to deterioration or operations. impairment as a result of a change of However, builders risk property is not conditions, including but not limited to considered vacant property, temperature, humidity or pressure. 26, Builders Risk Property means: 18. Pollutant means any substance other than a. Covered property in the course of ammonia that has been declared to be construction; hazardous to health by a governmental agency. b. Alterations or repair to the city's existing covered property, 19. Production Machinery means: c. Addition to the city's existing covered Any machine or apparatus that processes or property produces a product intended for eventual d. Builders risk property also includes: sale. However,production machinery does (1) Foundation of covered property in not mean any fired or unfired pressure the course of construction or an vessel other than a cylinder containing a addition to the city's existing covered movable plunger or piston. r property, This term does not appear elsewhere in this (2) Materials, equipment and supplies coverage form, but may appear in the used for construction, alteration or Declarations. repair,provided such property is intended to be permanently in or on 20. Suit means a civil proceeding to which this the builders risk property; and insurance applies and includes: (3) Temporary structures built or a. An arbitration proceeding in which assembled at a location described in damages are claimed and to which you the Declarations including cribbing, must submit or do submit with our scaffolding and construction forms consent;or used in the course of construction or b. Any other alternative dispute resolution alterations or repair of the builders proceeding in which damages are risk property. claimed and to which you submit with our consent. 21. Us means the League of Minnesota Insurance Trust. 22. You means the city shown in the Declarations. 23. Your means the city shown in the Declarations. LMCIT BM-200(11/01)(Rev.11/04) Page 12 of 12 9TO/tTOtj iv 6t OT 13t 900Z/80/£0 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXCLUSION OF CERTAIN COMPUTER-RELATED LOSSES This endorsement modifies insurance provided under the following: EQUIPMENT BREAKDOWN COVERAGE FORM A. We will not pay for loss or damage caused directly or indirectly by the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage. 1. The failure, malfunction or inadequacy of: a. Any of the following, whether belonging to any insured or to others: (1) Computer hardware, including microprocessors; (2) Computer application software; (3) Computer operating systems and related software; • (4) Computer networks; (5) Microprocessors(computer chips) not part of any computer system; or (6) Any other computerized or electronic equipment or components; or b. Any other products, and any services, data or functions that directly -. or indirectly use or rely upon, in any manner, any of the items listed in paragraph A.1.a. of this endorseme t; • due to the ability to correctly recognize, process, distinguish, interpret or accept one or more dates or times. An example is the inability of computer software to recognize the year 2000. 2. Any advice, consultation, design, evaluation, inspection, installation, maintenance, repair, replacement or supervision provided or done by you or for you to determine, rectify or test for, any potential or actual problems described on Paragraph A.1. of this endorsement. B If an excluded Cause of Loss described in Paragraph A. of this endorsement results in a Covered Cause of Loss, we will pay only for the loss or damage caused by such Covered Cause of Loss. C. We will not pay for repair, replacement or modification of any items in Paragraph A.1.a. and A.1.b. of this endorsement to correct any deficiencies or change any features. All other terms and conditions remain unchanged. LMC(T BM-212(11-01) Page 1 of 1 9TO/STO(j XV'd OS:OT aaM 900Z/90/CO From:Kate Tipping At:Landmark Insurance Services FaxID:651-464-7596 To:Eric Johnson,City Admin. Date: 1/3/2006 11:19 AM Page:2 of 3 JAN-03-2006 10:50 LEAGUE OF MN CITIES 6512811298 P.02 ENDORSEMENT#2 December 15,2005 MG COVERED PARTY COVENANT NUMBER EFFECTIVE DATE OAK PARK HEIGHTS CMC 26394 12101105 � _ y IT IS HERE BY UNDERSTOOD AND AGREED THAT COMMON COVERAGE DECLARATIONS FORM DEC-011 (11/$6)(Rev.11/03)IS AMENDED TO READ: Item 4. COVERAGE PARTS: EQUIPMENT BREAKDOWN COVERED IT IS FURTHER AGREED THAT MUNICIPAL PROPERTY,CRIME,BOND and EQUIPMENT BREAKDOWN DECLARATIONS FORM DEC-012 (11-66)(Rev_11104)IS AMENDED TO READ: EQUIPMENT BREAKDOWN LIMIT: $ 6.244,072. DEDUCTIBLE: $ 500. ANY ONE ACCIDENT Item 16. COVERAGE PARTS,FORMS,SCHEDULES AND ENDORSEMENTS APPLICABLE TO THIS COVERAGE. ME063(11/011 PM-100(11/03) BM-200(11/04) BM-212(11/01) TOTAL ENDORSEMENT PREMIUM $762. Z ADDITIONAL PREMIUM ❑ RETURN PREMIUM (gee Selow for Billing Info.) (DO NOT PAY) PREMIUM ADJUSTMENT TO BE MADE NOW (See Invoice) OR 0 PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATION All other terms and conditions remain unchanged. PR .597 xecutive Director, LMCIT LMCIT Page 1 of 1 ME044(1-95)(Rev.11-00) From:Kate Tioaino At:Landmark Insurance Services FaxlD:651-464-7596 To:Eric Johnson.City Admin. Date:1/32006 11:19 AM Pace: 1 of 3 Phone: (651)464-3333 ext. 209 Fax: (651) 464-7596 Fax From: Kate Tipping To: Eric Johnson, City Admin. Pages: 3 Fax: (651) 439-0574 Date: 1/3/2006 11:19:28 AM Phone: (651) 439-4439 Subject: System BD endmt Message: G (,J / < lam" `� Vii i 1a-r-0) by - Y Oak Park Heights rIll" . Request for Council Action fito Meeting Late September 27, 2005 10 Agenda Item Title League of Minnesota Cities Insurance for Equipment Breakdown Coverage Proposal Time Required 5 Minutes Agenda Placement Consent Originating Department/Requestor Finance - Judy Hoist, Deputy Clerk/Finance Director ,,// Requester's Signature �/`/af- Action Requested Approve additional LMCIT coverage for equipment breakdown Background/Justification (Please indicate any previous action, financial implications including budget information and recommendations). The League of Minnesota Cities Insurance Trust (LMCIT) has made equipment breakdown coverage available to Municipalities. The coverage is an addition / . enhancement to what was Boiler Coverage. Equipment breakdown covers equipment, machinery and systems failure. Equipment breakdown insurance pays for damage caused by electrical malfunction, mechanical breakdown, power surges, centrifugal force, etc. Some common equipment, machinery and system failures that would be covered are heating and cooling systems, security systems, generators, computers, faxes, phone systems, and communications equipment. The coverage would be for repair costs, property damage, relocation costs, and extra expenses. The quote for this coverage is $1,277 per year. The deductible is $500 for any one accident. This was not budgeted for 2005. My recommendation would be to split the cost between the General Fund, Water Utility Fund and Sewer Utility Fund; 70% ($893) General, 15% ($192) Water, 15% ($192) Sewer. I recommend a budget transfer in the amount of$900 from the General Fund Contingency to Insurance for this coverage. The budget for 2006 for this coverage was $900.00 in the General Fund and would need to be added to the Water Utility Fund and Sewer Utility Fund. Attached are the LMCIT Equipment Breakdown Coverage Proposal, Equipment 11 Breakdown Coverage Form, Quick Reference Chart, A Handy Reference Guide for Equipment Failures and Causes, and a brochure on Equipment Breakdown Insurance for Municipalities. 09/09/2005 FRI 08:23 FAX SEP-07-2005 07:5S LEAGUE OF MN CITIES 5512011298 P.02 i LEAGUE OF MINNESOTA CITIES Equipment Breakdown Coverage Proposal for: City of Oak Park Heights This is a proposal only. Coverage is nor hound atoll you refelliwe a confirmation to writing from LMC17'. Coverages)quo&are: I. Comprehensive(Including Production Machines) Lfmitr: $5,993,071. Per,1 ident-Property Damage(360MMMaximum) $5,000,000. PerAccidant-Lois Q/7 Venue and Extra Expense Sublimity: 5100,000 Service Interruption $100,000 Perishable Goes $100,0011 Data Restoration 1100,000 Demolition and ICC 5100,000 Expediting Expenses • $100,000 Pollutants 3100,000 CF C Refrigerants • 5100,000 Ica Rink Buried Piping 550,000 Newly Acquired Locations Dcductibie Any one Accident: $500. Ii. Limitation of Coverage for Specified Locations or Objects Location Occupancy ILL Excluded Equipment Annual Premium; S1211. Date September 7,2005 Patricia Mingee CPCU,CIC LMCIT Underwriting i • TOTAL P.02 EQUIPMENT BREAKDOWN COVERAGE FORM • Various provisions in this covenant restrict coverage. Read the entire covenant carefully to determine rights, duties, and what is or is not covered. Words and phrases that are in italics have special meaning. Refer to Section G- DEFINITIONS, except for accident and covered equipment,which are defined in A.1.a.and b. below. A. COVERAGE 1. Covered Cause of Loss The insurance provided by this Coverage Part applies to the direct result of an accident to covered equipment. a. Accident means direct physical loss as follows: (1) Mechanical breakdown, including rupture or bursting caused by centrifugal force; (2) Artificially generated electrical current, including electrical arcing, that disturbs electrical devices, appliances or wires; (3) Explosion of steam boilers, steam piping, steam engines or steam turbines owned or leased by you, or operated under your control; (4) Loss or damage to steam boilers, steam pipes, steam engines or steam turbines caused by or resulting from any condition or event inside such equipment; or (5) Loss or damage to hot water boilers or other water heating equipment caused by or resulting from any condition or event inside such boilers or equipment. b. Covered equipment,unless specified otherwise in the Declarations, means: (1) Any property built to operate under vacuum or pressure,other than weight of contents;or • (2) Any property,other than excluded electrical generating equipment, used for the generation, transmission, or utilization of energy. Such property must be at a location described in the Declarations and must be owned or leased by you or operated under your control, except as specifically provided for under Service Interruption coverage and the Service Interruption component of other coverages. 2. Coverages Provided expenses to the extent that they The following coverages are provided. do not exceed the amount of The accident must occur during the loss that otherwise would have Covenant Period, but expiration of the been payable under this coverage. covenant does not limit our liability. (c) We will consider the actual a. Property Damage experience of your business p Y 9 a before the accident and the We will pay for direct damage to covered probable experience you would property, have had without the accident in determining the amount of our b. Business Income and Extra Expense payment. (1) Business Income (d) This coverage ends 60 days (a) We will pay your actual loss of after the date the damaged business income that results property is repaired or replaced. directly from the necessary total (2) Extra Expense or partial interruption of your We will pay the reasonable extra business. expense to operate your business (b) We will also pay any necessary during a total or partial interruption • expenses you incur to reduce of business. the amount of loss under this coverage. We will pay for such LMCIT BM-200(11/01)(Rev.11/04) Page 1 of 12 c. Service Interruption f. Demolition and ICC (Increased Cost (1) Any insurance provided for.Business of Construction) Income and Extra Expense If an accident to covered equipment coverage is extended to apply to damages a building that is covered loss as qualified below. property; and the loss is increased by (2) The covered equipment is owned by a enforcement of any ordinance or law in (a) Utility, force at the time of the accident that regulates the construction or repair of (b) Landlord, or buildings, or establishes zoning or land (c) Other supplier use requirements,we will pay for the with whom you have a contract to following additional costs to comply with provide you with any of the following such ordinance or law: services:electrical power, (1) Your actual expenditures for the communications,waste disposal, air cost to demolish and clear the site of conditioning, refrigeration, heating, undamaged parts. gas, air,water or steam. (2) Your actual expenditures for The most we will pay for loss or damage increased costs to repair, rebuild, or under this coverage is $.100,000. construct the building.If the building is repaired or rebuilt,it must be d. Perishable Goods intended for similar use or (1) We will pay'for your loss of occupancy as the current building, perishable goods due to spoilage. unless otherwise required by zoning (2) We will also pay for such loss or land use ordinance or law. caused by an accident to covered (3) Your loss as described in Business equipment owned by a Income and Extra Expense coverage caused by loss covered in (a) Utility, (1)or(2) above. (b) Landlord, or We will not pay for: (c) Other supplier (4) Any fine; with whom you have a contract to (5) Any liability to a third party; provide you with any of the following services: electrical power, (6) Any increase in loss due to a communications, waste disposal, air pollutant; or conditioning, refrigeration, heating, (7) Increased construction costs until gas, air,water or steam. the building is actually repaired or (3) We will also pay for your loss,of replaced. perishable goods due to The most we will pay for loss or damage contamination from the release of under this coverage is $100,000. refrigerant, including but not limited to ammonia. g. Expediting Expenses (4) We will also pay any necessary With respect to your damaged covered expenses you incur to reduce the property, we will pay the reasonable amount of loss under this coverage. extra cost to: We will pay for such expenses to the (1) Make temporary repairs; and extent that they do not exceed the amount of loss that otherwise would (2) Expedite permanent repairs or have been payable under this permanent replacement. coverage. The most we will pay for loss or damage The most we will pay for loss or damage under this coverage is $100,000. under this coverage is $100,000. h. Pollutants e. Data Restoration We will pay for the additional cost to We will pay for your cost to research, repair or replace covered property replace and restore data, including because of contamination by a pollutant. • programs and operating systems. The This includes the additional expenses to pay loss or clean up or dispose of such property. most we will for to s o damage P Y g under this coverage is $100,000. Additional costs mean those beyond LMCIT BM-200(11/01)(Rev.11/04) Page 2 of 12 what would have been required had no you alleging that you are liable for pollutant been involved. damage to property of another in i We will also pay for additional loss as your care, custody or control,that described in.Business Income and Extra was directly caused by an accident Expense, and Perishable Goods to covered equipment, we will either: coverages caused by such (a) Settle the claim or suit,or contamination. (b) Defend you against the claim The most we will pay for loss or damage or suit but keep for ourselves under this coverage is $100,000. the right to settle it at any point. CFC Refrigerants (2) We will pay,with respect to any We will pay for the additional cost to claim or suit we defend: repair or replace covered property (a) All expenses we incur; because of the use or presence of a (b) The cost of bonds to release refrigerant containing CFC ' attachments. we do not have to (chlorofluorocarbon)substances. This furnish these bonds; means the additional expense to do the (c) All reasonable expenses least expensive of the following: incurred by you at our request to (1) Repair the damaged property and assist us in the investigation or replace any lost CFC refrigerant; defense of the claim or suit, (2) Repair the damaged property, including actual loss of earnings retrofit the system to accept a non- up to $250 a day because of CFC refrigerant and charge the time off from work; system with a non-CFC refrigerant; (d) All costs taxed against you in or any suit we defend; (3) Replace the system with one using a (e) Prejudgment interest awarded non-CFC refrigerant. against you on that part of the 9 a i 9 Y P • Additional costs mean those beyond judgment we pay. If we make what would have been required had no an offer to pay the applicable CFC refrigerant been involved. limits, we will not pay any We will also pay for additional loss as prejudgment interest based on described in Business Income and Extra that period of time after the Expense, and Perishable Goods offer; and coverages caused by such loss. (f) All interest on the full amount of The most we will pay for loss or damage any judgment that accrues after under this coverage is $100,000. entry of the judgment and before we have paid, offered to pay, or j. Ice Rink Buried Piping deposited in court the part of the We will pay for loss or damage caused judgment that is within the P y g applicable limits. by or resulting from an accident to buried piping at an ice rink. The most m. Mold we will pay under this coverage is $50,000. (1) We will pay for loss, damage or expense caused by mold, only when k. Newly Acquired Locations mold is the direct result of an All coverages provided by this Coverage accident to covered equipment that g P Y g occurs during the policy period. This Part are extended to a newly acquired includes, but is not limited to,costs location that you have purchased or arising from clean up, removal, or leased. abatement of such mold. As used in this coverage,the term I. Defense loss or damage means: • This coverage is automatically included (a) Direct physical loss or damage and does not need to be indicated in the to covered property caused by Declarations. mold including the cost of (1) If a claim or suit is brought against removal of the mold; LMCIT BM-200(11/01)(Rev.11/04) Page 3 of 12 (b) The cost to tear out and replace results, we will pay for that resulting loss any covered property as needed or damage. to gain access to the mold; b. The enforcement of any ordinance, law, (c) The cost of testing performed regulation, rule or ruling regulating or after removal, repair, restricting repair, replacement, replacement or restoration of alteration,use, operation, construction the damaged property is or installation,except as provided under completed, provided there is a the following coverages: Demolition and reason to believe that mold is ICC, Pollutants or CFC Refrigerants.` present; and c. Any earth movement, including but not (d) earthquake,loss as described in limited to earth quake subsidence Business Income and Extra sinkhole collapse, landslide, mudslide, Expense coverages caused by earth sinking,tsunami or volcanic action. such loss. d. Flood, surface water, waves,,tides,tidal (2) The most we will P a Y for loss or waves,overflow of any body of water, or damage under this coverage is t heir spray,Y, all whether driven by wind or $1,000,000.Regardless of the not: number of claims, the most we will However, if electrical covered equipment pay for the total of all loss or requires drying out because of the damage arising out of all accidents above, we will pay for the direct to covered equipment which take expenses of such drying out,subject to place within the 12-month period the applicable Property Damage limit starting with the beginning of the " and deductible. present annual policy period is e. Windstorm or hail. $1,000,000.'With respect to a particular accident which results in However; we will pay if: mold, we will not pay more than a (1) Covered equipment located within a total of$1,000,000 even if the mold building or structure suffers an • continues to be present or active or accident that results from rain, recurs in a later policy period. snow, sand or dust; and (3) The coverage provided under this (2) The building or structure did not first Mold Coverage does not increase sustain wind or hail damage to its the Equipment Breakdown Limit on roof or walls through which the rain, any covered property. If a particular snow, sand or dust entered. occurrence results in loss or f. Nuclear reaction or radiation, or damage by mold, and other loss or radioactive contamination,however damage, we will not pay more,for caused. the total of all loss or damage,than g. War, including undeclared or civil war; the Equipment Breakdown Limit on Warlike action by a military force, the affected covered property. including action in hindering or If there is covered loss or damage to defending against an actual or expected covered property not caused by attack, by any government, sovereign or mold, loss payment will not be other authority using military personnel limited by the terms of this or other agents; or coverage, except to the extent that Insurrection, rebellion,revolution, mold causes an increase in the loss. usurped power or action taken by Any such increase in the loss will be governmental authority in hindering or subject to the terms of this defending against any of these. coverage. h. Fire or combustion explosion,whether or not caused by or resulting from an B. EXCLUSIONS accident. 1. We will not pay for loss or damage caused i. Any of the following tests: by or resulting from: (1) A hydrostatic, pneumatic or gas a. Depletion, deterioration, corrosion, pressure test of any boiler or • erosion,wear and tear, or other pressure vessel; or gradually developing conditions. (2) An insulation breakdown test of any But if loss or damage from an accident type of electrical equipment. LMCIT BM-200(11/01)(Rev.11/04) Page 4 of 12 j. Water or other means used to extinguish cause of loss is provided by another a fire, even when such an attempt is coverage part or policy of insurance you • unsuccessful. have. k. Any of the following causes of loss: (1) Lightning, Explosion (except for 4. With respect to Perishable Goods coverage, steam or centrifugal explosion); we will also not pay for loss or damage as a Smoke, Aircraft or Vehicles, Riot or result of your failure to use all reasonable Civil Commotion,Vandalism or means to protect the perishable goods from Sprinkler Leakage; damage following an accident. (2) Breakage of Glass, Falling Objects, Weight of Snow, Ice or Sleet or 5. We will also not pay for loss or damage Water Damage (including Water caused by or resulting from any defect, Damage that is the result of an °programming error,programming limitation, accident); or virus,loss of data, loss of access, loss of (3) Freezing (caused by cold weather), use, loss of functionality or other condition Collapse or Molten Material. within or involving data or media of any kind. I. The presence, growth, But if loss or damage from an accident P 9 results we will P a y resulting for that resultin loss or - spread or activity of mold. This includes, damage. but is not limited to, costs arising from clean up, removal, or abatement of such mold. However, if an accident occurs, 6. None of the following is covered equipment: we will pay the resulting loss or damage. a. Structure,foundation,cabinet, This exclusion does not apply: compartment, or air supported structure (1) to spoilage of personal property that or building; O P P P ►�Y is perishable goods,to the extent b. Insulating or refractory material; that spoilage is covered under c. Sewer piping,underground vessels or Perishable Goods coverage; or piping, or piping forming a part of a • (2) to the extent that coverage is sprinkler system, except as provided provided under Mold coverage for under Ice Rink.Buried Piping coverage; that portion of any loss or damage d. Water piping other than boiler feed water resulting from the presence,growth, piping, boiler condensate return piping or proliferation, spread or activity of water piping forming a part of a mold as a result of an accident to refrigerating or air conditioning system; covered equipment. e. Vehicle, aircraft, floating vessel or any equipment mounted on such vehicle, 2. With respect to Business Income, Extra aircraft or floating vessel. However, any Expense and Service Interruption property that is stationary, permanently coverages, we will also not pay for: installed at a covered location and that a. Loss caused by your failure to use due receives electrical power from an diligence and dispatch and all external power supplier will not be reasonable means to resume business considered a vehicle, aircraft or floating at the described location; vessel; b. That part of any loss that is due solely to f. Dragline, excavation or construction the suspension, lapse or cancellation of equipment; a contract following an accident g. Equipment manufactured by you for extending beyond the time business sale; or income is applicable; or h. Electronic data processing equipment, c. Delay in resuming operations due to the unless used to control or operate need to reconstruct or re-input data or covered equipment. Electronic Data programs on media. Processing Equipment includes programmable electronic equipment that 3. With respect to Service Interruption is used to store, retrieve and process III coverage and paragraph (2)of Perishable data; and associated peripheral Goods coverage, we will also not pay for equipment. loss caused by or resulting from any of the causes of loss named in Exclusion 1.k. 7. Covered property does not include live above, whether or not coverage for such animals. LMCIT BM-200(11/01)(Rev.11/04) Page 5 of 12 C. LIMITS OF INSURANCE 2. We will not pay for loss or damage resulting Any payment made under this Coverage Part will from any one accident until the amount of not be increased if more than one city is shown loss or damage exceeds the applicable in the Declarations. deductible or deductibles shown in the If two or more limits apply to the same portion of Declarations. We will then pay the amount of a loss, we will only pay the smaller limit for that loss or damage in excess of the applicable portion of the loss. deductible or deductibles, subject to the applicable limits shown in the Declarations. 1. Equipment Breakdown Limit The most we will pay for loss or damage E. LOSS CONDITIONS arising from any one accident is the amount The following conditions apply in addition to the shown as the Equipment Breakdown Limit in the Declarations.This total limit applies to all Common Covenant Conditions: coverages under this Coverage Part except 1. Abandonment Defense.The costs we incur under the There can be no abandonment of any the coverage shall not reduce he roe to us. g P P nY available Equipment Breakdown Limit. • 2. Appraisal 2. Coverage Limits If we admit liability for a loss and we and you The limit of your insurance under each of the disagree on the value of the property or coverages from loss or damage arising from business income, either may make written any one accident is the amount shown for demand for an appraisal of the loss. In this that coverage.Unless otherwise shown event,each party will select a competent below, these limits are a part of, and not in and impartial appraiser.The two appraisers addition to, the Equipment Breakdown Limit. will select an umpire. If they cannot agree, either may request that selection be made 3. Business Income and Extra Expense Limit by a judge of a court having jurisdiction. The The limit of your insurance for Business appraisers will state separately the value of • the Income and Extra Expense coverages is property or business income. If they fail $5,000,000.This limit is in addition to the agree they will to a ll submit their differences to. Equipment Breakdown Limit. the umpire. A decision agreed to by any two indi party be binding.n ..Each -will: 9 P �Y 4.. Newly Acquired Locations Limit a. Pay its chosen appraiser;and The limit of your insurance for Newly b. Bear the other expenses of the appraisal Acquired Locations coverage is$5,000,000. and umpire equally. This limit is in addition to the Equipment Breakdown Limit. 3. Brands and Labels However, any newly acquired location that If branded or labeled merchandise that is has covered electrical generating equipment covered property is damaged by an accident must be reported to us within 90 days after to covered equipment, but retains a salvage you have purchased or leased the location value,you may, at your expense: and will be subject to the terms and a. Stamp the word SALVAGE on the merchandise or its containers the as determined by us. merchandise amers if he stamp will not physically damage the D. DEDUCTIBLE merchandise; or 1. If deductibles vary by type of covered b. Remove the brands or labels,if doing so equipment and more than one type of will not physically damage the covered equipment is involved in any one merchandise. You must re-label the accident, the highest deductibles will apply. merchandise or its containers to comply Unless otherwise shown in the Declarations, with the law. the Deductibles apply to all loss or damage We will pay for any reduction in value of the covered by this Coverage Part. salvage merchandise resulting from either of Defense Coverage is not subject to a these two actions. ID deductible. If a Brands and Labels Limit is shown on the Declarations, we will not pay more than the indicated amount for coverage under this Condition. LMCIT BM-200(11/01)(Rev.11/04) Page 6 of 12 4. Duties In the Event of Loss or Damage reasonable amount of time does not - You must see that the following are done in necessarily end when the operations are the event of loss or damage: resumed; a. Give us prompt notice of the loss or c. Using merchandise or other property damage.Include a description of the available to you; property involved; d. Using the property or services of others; or b. .As soon as possible,give us a e. Salvaging the damaged property. description of how,when and where the loss or damage occurred; 6. Salvage and Recoveries c. Allow us a reasonable time and When, in connection with any loss under this opportunity to examine the property and Coverage Part,any salvage or recovery is premises before repairs are undertaken received subsequent to the payment of such or physical evidence of the accident is loss,the loss shall be refigured on the basis removed. But you must take whatever on which it would have been settled had the measures are necessary for protection amount of salvage or recovery been known from further damage; at the time the loss was originally d. Permit us to inspect the property and determined. Any amounts thus found to be records.Also permit us to take samples due either party from the other shall be paid of damaged and undamaged property promptly. for inspection,testing and analysis; e. If requested, permit us to question you 7. Valuation under oath, at such times as may be a. Our payment for damaged covered reasonably required about any matter property will be the smallest of: relating to this insurance or your claim (1) The cost to repair the damaged u books and records. In including your n 9 Y property; such event,your answers must be ) T (2) The cost to replace the damaged signed; property on the same site;or 40 f. Send us a signed, sworn proof of loss containing the information we request to (3) The amount you actually spend that is necessary to repair or replace the settle the claim. You must do this within ry P P 60 days after our request; damaged property. b. Except as described under f. below,you g. Cooperate with us in the investigation must pay the extra cost of replacing py P 9 and settlement of the claim; damaged property with property of a h. Promptly send us any legal papers or better kind or quality or of a different size notices received concerning the loss or or capacity. P ty. dmae; and a g � c. If you do not repair or replace the i. Make no statement that will assume any damaged property within 24 months obligation or admit any liability,for any after the date of the accident,then we loss or damage for which we may be will pay only the smaller of the: liable, without our consent. have taken to repair(1) Cost it would h at p We may examine any city under oath, while the time of the accident; or not in the presence of any other city and at (2) Actual cash value; at the time of the such times as may be reasonably required, accident. about any matter relating to this coverage or the claim, including a city's books and d. If any of the following conditions are records. In the event of an examination, a met, property held by you for sale will be citys answers must be signed. valued at the sales price as if no loss or damage had occurred, less any 5. Reducing your Loss discounts and expenses you otherwise would have had: You must reduce your loss, if possible, by: (1) The property was manufactured by a. Resuming business, partially or you; completely; (2) The sales price of the property is fa b. Making up lost business within a less than the replacement cost of reasonable amount of time. This includes the property; or working extra time or overtime at the (3) You are unable to replace the location of loss or at another location.The property before its anticipated sale. LMCIT BM-200(l1/01)(Rev.11/04) Page 7 of 12 e. The most we will pay for loss or damage this Coverage Part as an additional city, we arising from any one accident is the will consider them to be a city under this amount shown as the Equipment Coverage Part only to the extent of their Breakdown Limit in the Declarations.This interest: total limit applies to all coverages under this Coverage Part except Defense.The 2. Bankruptcy costs we incur under the Defense The bankruptcy or insolvency of you or your coverage shall not reduce the available estate will not relieve us of any obligation Equipment Breakdown Limit except as under this Coverage Part. specifically provided for under Data Restoration Coverage, data and media 3. Concealment, Misrepresentation or Fraud will be valued on the following basis: We will not pay for any loss if you or any (1) For mass-produced and commercially available software,at other city at any time intentionally conceal or the replacement cost. misrepresent a material fact concerning: a. This Coverage Part; (2) For all other data and media, at the b. The covered property' cost of blank material for reproducing p p Y the records.This includes data c. Your interest in the covered property; or representing financial records. We d. A claim under this Coverage Part. will not pay based on their face value. f. Environmental,Safety and Efficiency 4. Jurisdictional Inspections Improvements If any covered equipment requires inspection If covered equipment requires to comply with state or municipal boiler and replacement due to an accident, we will pressure vessel regulations, we agree to pay your additional cost to replace with perform such inspection on your behalf. equipment that is better for the, environment, safer or more efficient than 5. Legal Action Against Us the equipment being replaced. No one may bring a legal action against us • However, we will not pay more than under this Covenant unless: 125% of what the cost would have been to repair or replace with like kind and a. There has been full compliance with all quality. This coverage does not increase the terms of this Covenant; and any of the applicable limits. This b. The action is brought within two years coverage does not apply to any property after the date of the accident, or indicated as being valued on an Actual c. We agree in writing that you have an Cash Value basis. obligation to pay for damage to covered g. In any event, we will not pay more than property of others or until the amount of the following,whichever is the least: that obligation has been determined by (1) Your financial interest in the covered final judgment or arbitration award. No property; one has the right under this Covenant to (2) 150% of the estimated replacement bring us into an action to determine your liability. cost of the covered property as stated in the Schedule of Covered Property,or 6. Loss Payable (3) The Actual Cash Value of the a. We will pay you and the loss payee covered property, if the covered shown in the Declarations for loss property is vacant property. covered by this Coverage Part, as However, any amounts paid for interests may appear.The insurance coverages as provided by A. Coverages, covers the interest of the loss payee 2.b.-2.j. are in addition to these unless the loss results from conversion, 2 b.-2. . are or embezzlement on your part. b. We may cancel the covenant as allowed F. ADDITIONAL CONDITIONS by the Cancellation Condition. The following conditions apply in addition to the the loss ends this agreement cs , • Common Conditions: the loss payee s interest. If we cancel, we will mail you and the loss payee the 1. Additional Covered Party same advance notice. If a person or organization is designated in LMCIT BM-200(11101)(Rev.11104) Page 8 of 12 c. If we make any payment to the loss cancellation if we cancel for your payee,we will obtain their rights against nonpayment of premium; or • any other party. . (2) 30 days before the effective date of cancellation if we cancel for any 7. Mortgage Holders other reason. a. The term mortgage holder includes g. If we elect not to renew this covenant, trustee. we will give written notice to the b. We will pay for direct damage to covered mortgage holder at least 10 days before property due to an accident to covered the expiration date of this covenant. equipment to you and each mortgage h. If we suspend coverage, it will also be holder shown in the Declarations in their suspended as respects the mortgage order of precedence,as interests may holder. We will give written notice of the appear. : suspension to the mortgage holder. c. The mortgage holder has the right to receive loss payment even if the 8. Other Insurance mortgage holder has started foreclosure ,may have other insurance subject or similar action on the covered property. to the same plan,terms,conditions and d. If we deny your claim because of your provisions as the insurance under this acts or because you have failed to Coverage Part. If you do, we will pay our comply with the terms of this Coverage •share of the covered loss or damage. Part, the mortgage holder will still have Our share is the proportion that the the right to receive loss payment if the applicable limits under this Coverage mortgage holder: Part bear to the Limits of Insurance of all (1) Pays any premium due under this insurance covering on the same basis. Coverage Part at our request if you b. If there is other insurance covering the have failed to do so; same loss or damage, other than that (2) Submits a signed, sworn proof of described in(a)above, we will pay only ii) loss within 60 days after receiving the amount of covered loss or damaged notice from us of your failure to do in excess of the amount due from that so;and other insurance,whether you can collect (3) Has notified us of any change in on it or not. ownership or material change in risk In no case will we pay more than the known to the mortgage holder, applicable limits. All of the terms of this Coverage Part will then apply directly to the mortgage holder. 9. Coverage Period,Coverage Territory e. If we pay the mortgage holder for any loss Under this Coverage Part: and deny payment to you because of your a. The accident must occur: acts or because you have failed to comply (1) During the Coverage Period shown with the terms of this Coverage Part in the Declarations; and (1) The mortgage holder's right under (2) Within the Coverage Territory. the mortgage will be transferred to us to the extent of the amount we b. The Coverage Territory is: pay; and (1) The United States of America (2) The mortgage holder's right to recover (including its territories and the full amount of the mortgage possessions); holder's claim will not be impaired. (2) Puerto Rico;and At our option,we may pay to the (3) Canada. mortgage holder the whole principal on the mortgage plus any accrued interest. 10. Privilege to Adjust with Owner In this event,your mortgage and note In the event of loss or damage involving will be transferred to us and you will pay property of others in your care, custody or your remaining mortgage debt to us. control, we have the right to settle the loss or III f. If we cancel this covenant, we will give damage with respect to such property with written notice to the mortgage holder at the owner of the property. A receipt for least: payment from the owners of that property (1) 10 days before the effective date of will satisfy any claim of yours. LMCIT BM-200(11/01)(Rev.11104) Page 9 of 12 11. Suspension e. We will return premium to you if a Whenever covered equipment is found to be location with replacement cost values of in,or exposed to, a dangerous condition, greater than$5,000,000 is deleted any of our representatives may immediately during the Covenant Period. suspend the coverage against loss from an accident to that covered equipment. This G. DEFINITIONS can be done by delivering or mailing a 1. Accident• defined in A.1.a.,'COVERAGE- written notice of suspension to: Covered Cause of Loss. a. Your last known address; or b. The address where the covered 2. Boilers and Vessels means: equipment is located. a. _ Any boiler, including attached steam, Once suspended in this way,your coverage condensate and feed water piping;and can be reinstated only by an endorsement b. Any fired or unfired pressure vessel for that covered equipment. subject to vacuum or internal pressure If we suspend your coverage,you will get a other than the static pressure of its pro rata refund of premium for that covered contents. equipment. But the suspension will be This term does not appear elsewhere in this effective even if we have not yet made or coverage form, but may appear in the offered a refund. Declarations. 12. Transfer of Rights of Recovery Against 3. Business Income means the sum of: Others to Us a. The Net Income(net profit or loss before If any person or organization to or for whom income taxes)that would have been, we make payment under this Coverage Part earned or incurred; and has rights to recover damages from another, b. Continuing normal operating expenses those rights are transferred to us to the incurred, including employee payroll. extent of our payment.That person or organization must do everything necessary 4. City means governmental body or entity first to secure our rights and must do nothing named in the Declarations. For purposes of after loss to impair them.But you may waive this coverage, city includes relief your rights against another party in writing: associations. Unless specifically named in a. Prior to a loss to your covered property. the Declarations, city shall not include: b. ' After a loss to your covered property a. Gas, electrical, or team utilities only if, at time of loss, that party is one of commission; the following: b. Port authority, housing and (1) Someone insured by this insurance;or redevelopment authority, economic (2) A business firm: development authority, area or municipal (a) Owned or controlled by you; or redevelopment authority, or similar (b) That owns or controls you. agency: c. Municipal power agency; 13. Premiums and Premium Adjustments d. Municipal gas agency; a. You agree to furnish us with a schedule e. Hospital or nursing home board or of locations prior to the beginning of commission; each Covenant Period. f. Airport commission; b. These schedules must include all g. Welfare or public relief agency; locations that were covered by your prior h. School board; or covenant but were not described in the i. Joint power entities. Schedule of Covered Property. c. The initial annual premiums will be 5. Covered Equipment is defined in A.1.b., based upon these schedules and the COVERAGE-Covered Cause of Loss. appropriate replacement cost values. d. You will pay us additional premium if a 6. Covered Electrical Generating Equipment • new location with replacement cost means: values of greater than $5,000,000 is added during the Covenant Period. a. Engine generators, but only if you do not own a steam, gas,water or wind turbine; LMCIT BM-200(11/01)(Rev.11/04) Page 10 of 12 b. Electrical transformers, switchgear and (1) Boilers used primarily to provide power lines used to convey the steam for one or more turbine- ill generated electricity;and generator units; c. Associated equipment necessary for the (2) Turbine-generators (including operation of any of the equipment listed steam, gas,water, or wind turbines); in a. and b. above. (3) Engine-generators, but only if you also own a steam, gas, water, or 7. Covered Property means property that: wind turbine; a You own or (4) cells or other alternative . , ) Fu e I b. Is in your care,custody or control and electrical generating equipment; for which ou are legally liable while at a (5) Electrical transformers, switchgear Y 9 Y location described in the Declarations. and power lines used to convey the But, covered property does not include generated electricity; and excluded electrical generating equipment. (6) Associated equipment n necessary for the operation of any of the 8. Data means`information or instructions equipment listed in(1)through (5) stored in digital code capable of being above g P 9 . processed by machinery. b. Excluded Electrical Generating 9. Employee means: Equipment does not mean: a. A p erson whom you compensate directly ou com ensate directl (1) Elevator or hoist motors that by salary,wages or commission,and generate electricity when releasing who you have the right to direct or cable; or control while performing duties for you; (2) Equipment intended to generate b. Member of the city.council• electricity solely on an emergency, c. Member of a city board, commission,or back-up basis. 40 committee which is not excluded by the definition of city; 11. Extra Expense means the additional cost. you incur to operate erate our business during Elected or appointed official of the city; Y P your 9 the interruption over and above the cost that e. Volunteer person or organization while normally would have been incurred to acting on behalf of the city and subject to the city's direction and control; operate the business during the same period Y had no accident occurred. f. Other authorized person or agent of the city while acting on behalf of the city,but 12. Joint Power Entity means an operating excludes independent contractors; entity created by two or more governmental g._ City relief association members, officers, units entering into an agreement as provided and employees;or by statute for the joint exercise of h. Any natural person employed by an governmental powers. An intergovernmental employment contractor while that person agreement will be deemed to create a joint 0 wers entity if the agreement establishes a is subject to your direction and control A Y J Y board with the effective power to do any of and performing services for you p Y excluding, however, any such person the following, regardless of whether the specific consent of the constituent s while having care and custody of P ro property outside the premises. governmental units may also be required: P P Y P But employee does not mean any agent, a. To receive and expend funds; broker, factor, commission merchant, b. To enter into contracts; consignee, independent contractor or c. To hire employees; representative of the same general d. To purchase or otherwise acquire or character. hold real or personal property; or 10. Excluded Electrical Generating e. To sue or be sued. Equipment means: • a. Equipment which converts any other 13. Media means all forms of electronic, form of energy into electricity. This magnetic and optical tapes and discs for use includes, but is not limited to, the in any electronic computer or electronic data following: processing equipment. LMCIT BM-200(11/01)(Rev.11/04) Page 11 of 12 14. Mold means any mold, fungus,mildew or 24. We means the League of Minnesota yeast,including any spores or toxins Insurance Trust. produced by or emanating from such mold, fungus, mildew or yeast. 25. Vacant property means: a. Covered deemed a v oe dpr ope rty i s d e e o be 15. One Accident means: vacant property if for a period of 60 If an initial accident causes other accidents, consecutive days less than 31% of the all will be considered one accident. All covered property square footage is accidents that are the result of the same either used by the city for customary event will be considered one accident. operations or is leased out. b. Covered property rented or leased to the 16. Our means the League of Minnesota city is deemed to be vacant property if Insurance Trust for a period of 60 consecutive days the covered property d oe s not contain 17. Perishable Goods means any covered enough property to conduct customary property subject to deterioration or operations. impairment as a result of a change of However, builders risk property is not conditions, including but not limited to considered vacant property. temperature,ature, humidity or pressure. 26. Builders Risk Property means: 18. Pollutant means any substance other than a. Covered property in the course of ammonia that has been declared to be construction; hazardous to health by a governmental agency. b. Alterations or repair to the city's existing covered property, 19. Production Machinery means: c. Addition to the city's existing covered ss property Any machine or apparatus tha t processes or produces a product intended for eventual d. Builders risk property also includes: • sale.However,production machinery does (1) Foundation of covered property in not mean any fired or unfired pressure the course of construction or an vessel other than a cylinder containing a addition to the city's existing covered movable plunger or piston. property, This term does not appear elsewhere in this (2) Materials, equipment and supplies coverage form, but may appear in the used for construction,alteration or Declarations repair, such property is intended to be permanently in or on 20. Suit means a civil proceeding to which this the builders risk property, and insurance applies and includes: (3) Temporary structures built or a. An arbitration proceeding in which assembled at a location described in damages are claimed and to which you the Declarations including cribbing, must submit or do submit with our scaffolding and construction forms consent;or used in the course of construction or b. Any other alternative dispute resolution alterations or repair of the builders proceeding in which damages are risk property. claimed and to which you submit with our consent. 21. Us means the League of Minnesota Insurance Trust. 22. You means the city shown in the Declarations. 23. Your means the city shown in the Declarations. LMCIT BM-200(11/01)(Rev.11/04) Page 12 of 12 • ��ANDslribv'"[i' Quick Reference Chart Equipment Insurance Vs. Warranties and Contracts Typical "Full" Mfg.'s Maint. Equipment Type Of Occurrence Or Service Warranty Contract Insurance Pay for direct damage to NO NO YES surrounding property Provide required jurisdictional NO NO YES inspection services Pay for lost refrigerant NO NO YES Pay for breakdown caused by YES NO YES faulty materials or workmanship Pay for labor cost to repair/replace NO SOMETIMES YES parts Pay for accidental breakdown NO YES YES (see Exclusions) Pay for Business Income losses NO 0 NO YES • (Optional)( P Pay for Extra Expense of rental NO NO YES equipment,rental facilities and (Optional) temporary repairs Pay for spoilage of perishables NO NO YES (Optional) Pay for Ammonia Contamination NO NO YES of product (Optional) Pay for operator error or misuse NO NO YES of equipment Pay for full repair or replacement NO NO YES cost of parts and property Pay for Expediting Expenses of NO NO YES overtime,labor,fast freight,etc. Pay for refrigerant lost through NO NO NO leakage Oil,clean,adjust,change filters,etc. NO YES NO 4110 Repair and replace worn parts NO YES NO Equipment 0 e t , �., . • „,,p;y7/i ,, 4•a. aA_,16- ...,14 A //OnRèfrence u e , t- (k\i. .....t „ ) ,,, 0.,,,,.2,*.,,,4„ ...,..1.74,,,.,,, 1 „"',,,,--,n1/ h-.8:.,..1:4,;„.--, „ ,-... ' ■ ''',``f,-T,",,Y;ri-f, ,',':,,,, _ �' J }i -e i ay -'c--- A world that depends on equipment -- k_ > �" ` Businesses, institutions and municipalities are acquiring and increasingly relying on costly equipment and new technologies. Whether it's electrical � � '' supply and distribution, environmental controls, refrigeration or computer 0 F', -�7,' systems, equipment is vital in today's world. Reliance on new technologies ' 4 , ,a' and equipment has actually led to a greater probability that a business- ' with equipment -���`''� � �� � '' � : � critical system will fait. Understanding what can go wrong w h : ' I P't is a key to preventing losses and protecting the bottom line. fir$ q i.' C •„yam -«\s / '� Insurance that protects equipment — �,: ae. ; a o and the bottom line F °', Equipment is exposed to unique risks that other property is not, such , as electrical short circuits and mechanical forces. Unbudgeted tosses from a breakdown can be extremely costly, and in many cases, greatly impact •r-.ter ... f'�''i+1 I } ,A� the bottom line. Therefore, equipment breakdown coverage is needed to 7., pay for the financial loss incurred as a consequence of a breakdown. , = n S;` i� Insurance that protects the head of your business " x Equipment breakdown coverage protects the heart of your business — ii ;r '. '. the equipment, machinery and systems that run your business. Equipment ''=::::: 11:-.;11 '''•::-_. breakdown insurance pays for damage caused by tp�`" ` `` 4, ti 0 ® Electrical malfunction `° ` � t° � ® Mechanical breakdown ii• irf� � Rj�uy �'.. r r, � �_ � ' _ 4 • Power surges i- _' � .�' ii ' • Centrifugal force r Centre ug t ' ® And more 1 r... e ! a n { i Common f j„ L � i \ ” r' equipment 1 1 t failures and ,, k , . ,, „.„.,._, i ___ , causes. .- . �_ . T-gar: Electrical Equipment Mechanical Equipment The loss of power can mean the loss of Buildings are loaded with mechanical income and customers. Since the panels, equipment that contains sophisticated,heating . . . and how circuit breakers cables ee technology. cal sY s emare all interconnected, short and cooling systems, securi ty Elevators, are circuit in one part can spread to other all heavily used,in some cases around breakdowns parts of the system. The cause can be: • Loose connections the clock, making it even more prone to breakdown. Common causes are: •impact Dust • Oil contamination • Moisture or high humidity • Misalignment can • Supply line surges • Metal fatigue • Insulation deterioration • Operator error t he bottom • Overload conditions • Electrical disturbances Electrical system breakdowns are a lead- • Vibration • • • ing cause of equipment and business Line • Foreign material interruption losses. It's a growing problem Mechanical equipment breakdown can line.GG and the losses can be substantial— significantly impact a business. A break- electrical systems constitute a major down can cost thousands in repair bills, percentage of a property's total value. business interruption and lost income. TYPICAL LOSSES: TYPICAL LOSSES: OFFICE BUILDING HOSPITAL Electrical arcing destroyed three main A turbine generator supplying power to electrical panels and left an office build- a hospital failed when blades broke and ing without power. Temporary measures penetrated the engine. were taken to restore power to tenants — Total Loss: $292,513 particularly to an accounting firm that was in the height of its tax season crunch. PRINTER Total Loss: $1,597,389 A bolt came loose and fell into a high- APARTMENT BUILDING speed press, damaging the cylinder and gears. An apartment complex's aluminum electrical supply bus burned out, severely Total Loss: $136,693 damaging electrical wires and cables. MACHINE SHOP Angry residents had to be relocated. A power surge from a utility line Equipment Repair Cost' $118,681 damaged two computer circuit boards, Relocation Cost: $ 72,152 halting a metal shearing operation for Total Loss: $190,833 nearly a week. Materials and workers FURNITURE MANUFACTURER were sent to another plant several Sawdust in an electrical distribution hundred miles away to meet productill) panel severely damaged the interior of the requirements. n~'Ll panel. Overtime was required to make up Repair Cost: $ 9,485 _ , ``r„ lost production. Extra Expense' $42,541 3868 a Total Loss: $52,026 THE HARTFORD Repair Cost: $21,087 ST' AM BOILERINSPECI'ION Business Interruption: $14,600 AND INSURANCE CO. Total Loss: $35,687 '"":"' ^ate b :}'4k.it •'• ;:":,..,: +, )I ,.*, 1 4 ,. 'N -1. ---L2 --2----. - k • ltt sr ;'i pt 1s\y 1' � fir � 11 .{�.� � 4 ' ., t� t I rrJJ! , Le 4, f� , vV1 fir) I -- - .. .. :.., -. ,/., 4. ,,!.. . i .41 �j I 4* m x ' I Air Conditioning and Boilers and Business Equipment Refrigeration Systems Pressure Vessels and Systems An air conditioning or refrigeration Boilers are commonly used to generate Computers, faxes, PBX phone systems breakdown can result in business and distribute heat. Cookers, sterilizers and communications equipment rely on interruption that may far exceed the and vulcanizers also use boilers. This sensitive electronic technology that is property damage loss. Dependence on equipment is vulnerable to breakdown prone to breakdown. This equipment is refrigeration increases the Likelihood due to: particularly susceptible to damage from: of loss due to spoilage. Common • Pump failure • Power surges causes of these breakdowns include: • Low water cut-off mechanism failure • Power interruptions • Control failure • Control failure • Electrical line surges • Vibration • Scale build-up • Insulation deterioration • Lack of lubrication • Inadequate controls of safety devices • Overload conditions Is • Scale build-up The effect that a boiler or pressure • Separation of assembled parts • Rapid weather change vessel breakdown can have on an Business equipment breakdown can shut Compressors, which are particularly operation should not be underestimated. an operation down, result in Lost income, prone to breakdown, can cost $10,000 Repair costs can soar and lack of heat or and Large repair/replacement bills. to $20,000 or more, and replacement hot water can shut down a facility. refrigerant can total in the thousands. TYPICAL LOSSES: TYPICAL LOSSES: MUNICIPAL BUILDING TYPICAL LOSSES: SCHOOL A power surge damaged a generator, APARTMENT BUILDING Sediment in a boiler caused a low-water burned out police radio equipment, An air conditioning motor burned out in condition that resulted in severe over- printed circuit boards for a fire alarm a high-rise,senior citizen's apartment firing, shutting down the boiler— and a system, a small transformer, and building. Ninety-plus degree temperatures school. A rental unit was needed until small electric motors. necessitated setting up four rented "spot the damaged boiler could be replaced. Total Loss: $90,160 coolers." Overtime was required to get Property Damage: $98,500 OFFICE BUILDING the motor back on line. Extra Expense: $ 25,164 Electrical power supply voltage Property Damage. $83,557 Total Loss: $123,664 fluctuation caused two telephone Extra Expense: $ 16,794 MANUFACTURER system terminal boards to burn out. Total Loss: $100,351 A faulty circuit in a water pump caused Total Loss: $52,500 FOOD PROCESSOR a fire tube boiler to dry fire. The boiler SERVICE STATION An ammonia line ruptured when a corn- was severely damaged. A power surge damaged a service station's pressor crankshaft and its connecting rod Total Loss: $90,600 electronics, including the computerized broke. Fresh scallops were contaminated with ammonia. Rental units were needed CHURCH diagnostic system,telephone, paging while the new compressor was installed. A section of a boiler and a steam pipe system and the security system. Total Loss: $65,289 fitting cracked, Steam damaged the Total Loss: $33,388 • church organ, choir robes, and public MEDICAL CLINIC address system. A control failed on a medical clinic's ± Total Loss: $34,969 refrigerator, causing the temperature to ; I dive into single-digit temperatures. Drugs, which normally are stored between 36 to 43 degrees, had to be discarded. Total Loss: $21,953 • Insurance that a S for Equipment breakdown insurance offers protection from the costs associated• p y • with insured losses to a facility's equipment. It pays for: more than just a repair. • Direct property loss — the cost to repair or replace the damaged equipment; • Extra expense losses when a breakdown causes business interruption; • Other expenses incurred to limit the loss or speed business restoration; • The loss value of spoiled products or materials. Equipment breakdown insurance covers the physical damage — and the financial damage -- stemming from equipment failure. It's the bottom-tine protection essential for today's equipment-intensive world. More than protection— At Hartford Steam Boiler, we believe that helping customers prevent costly Losses and business interruption is the best kind of insurance. In fact, prevention the company was founded on that principle. Here are just a few of the toss prevention services we offer: • Fax-On-Demand --technical information you need, 24 hours a day. Call 1-800-716-7874. • Inspection Hotline -- request a jurisdictional inspection for a boiler or pressure vessel.or get an answer to a technical question. Call 1-800-333-4677, fax 1-800-298-4083, or e-mail NSCINSP_HOTLINE @hsb.com • • Infrared Thermography — to help identify potential problems in your electrical system. 11366 • THE HARTFORD • SI'E AM BOILER INSPECTION AND INSURANCE CO. One State Street, P.Q. Box 5024 Hartford, CT 06102-5024 http://www.hsb.com 1-800-472-1866 -.. _,r_[_.—..�� C...11.........-. ....Mg_......1..wl...iw-r •S..to tkn ani1N w 'I' c4 2 H E s °O � 8 ° gym $ ;���e. f V. ry > 1,. l r O 8. 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The League of Minnesota Cities Insurance Trust (LMCIT) has made equipment breakdown coverage available to Municipalities. The coverage is an addition / enhancement to what was Boiler Coverage. Equipment breakdown covers equipment, machinery and systems failure. Equipment breakdown insurance pays for damage caused by electrical malfunction, mechanical breakdown, power surges, centrifugal force, etc. Some common equipment, machinery and system failures that would be covered are heating and cooling systems, security systems, generators, computers, faxes, phone systems, and communications equipment. The coverage would be for repair costs, property damage, relocation costs, and extra expenses. The quote for this coverage is $1,277 per year. The deductible is $500 for any one accident. This was not budgeted for 2005. My recommendation would be to split the cost between the General Fund, Water Utility Fund and Sewer Utility Fund; 70% ($893) General, 15% ($192) Water, 15% ($192) Sewer. I recommend a budget transfer in the amount of$900 from the General Fund Contingency to Insurance for this coverage. The budget for 2006 for this coverage was $900.00 in the General Fund and would need to be added to the Water Utility Fund and Sewer Utility Fund. Attached are the LMCIT Equipment Breakdown Coverage Proposal, Equipment Breakdown Coverage Form, Quick Reference Chart, A Handy Reference Guide for Equipment Failures and Causes, and a brochure on Equipment Breakdown Insurance for Municipalities. 09/09/2005 FRI 08:23 FAX (J002/002 SEP-07-2005 07 55 LEAGUE OF MN CITIES 6512911296 P.02 LEAGUE OF MINNESOTA CITIES Equipment Breakdown Coverage Proposal fort City of Oak Park Heights Thi. is a proposal only Coverage is not hound until you twelve a confirmation in writing from LMCIT Coverage(v)quoted are: L Comprehensive(Including Production Machines) $5,993.071. Per Accident-Property Damage($6OMMMaxinntm) :$5,000,000. Per Accident-Loss efRevenue and/Zara Expense SuhItmits: $100,000 Service lnterruprirm 5100,000 Perishable Goods 3100,000 Data Restoration S/00,000 Demolition and ICC 5100.000 ,Expediting Exponres $100,000 PoilutanL 3100,000 C.'FC Refrigerants $/00,000 Ice Rink Buried Piping $50,000 Newly Acquired Luaattons Deductible Any one Accident: $500. TI. Limitation of Coverage for Specified Locations or Objects Location °mowt III. Excluded Equipment Annual Premium; $1217. Date September 7,2005 Patricia Mingee CPCU,CIC LMCIT Underwriting TOTAL P.02 • EQUIPMENT BREAKDOWN COVERAGE FORM Various provisions in this covenant restrict coverage. Read the entire covenant carefully to determine rights, duties, and what is or is not covered. Words and phrases that are in italics have special meaning. Refer to Section G- DEFINITIONS, except for accident and covered equipment, which are defined in A.1.a. and b. below. A. COVERAGE 1. Covered Cause of Loss The insurance provided by this Coverage Part applies to the direct result of an accident to covered equipment. a. Accident means direct physical loss as follows: (1) Mechanical breakdown, including rupture or bursting caused by centrifugal force; (2) Artificially generated electrical current,including electrical arcing, that disturbs electrical devices, appliances or wires; (3) Explosion of steam boilers, steam piping, steam engines or steam turbines owned or leased by you, or operated under your control; (4) Loss or damage to steam boilers, steam pipes, steam engines or steam turbines caused by or resulting from any condition or event inside such equipment; or (5) Loss or damage to hot water boilers or other water heating equipment caused by or resulting from any condition or event inside such boilers or equipment. b. Covered equipment,unless specified otherwise in the Declarations, means: (1) Any property built to operate under vacuum or pressure, other than weight of contents; or (2) Any property, other than excluded electrical generating equipment, used for the generation, transmission, or utilization of energy. Such property must be at a location described in the Declarations and must be owned or leased by you or operated under your control, except as specifically provided for under Service Interruption coverage and the Service Interruption component of other coverages. 2. Coverages Provided expenses to the extent that they The following coverages are provided. do not exceed the amount of The accident must occur during the loss that otherwise would have Covenant Period, but expiration of the been payable under this covenant does not limit our liability. coverage. (c) We will consider the actual a. Property Damage experience of your business before the accident and the We will pay for direct damage to covered probable experience you would property. have had without the accident in determining the amount of our b. Business Income and Extra Expense payment. (1) Business Income (d) This coverage ends 60 days (a) We will pay your actual loss of after the date the damaged business income that results property is repaired or replaced. directly from the necessary total (2) Extra Expense or partial interruption of your We will pay the reasonable extra business. expense to operate your business (b) We will also pay any necessary during a total or partial interruption expenses you incur to reduce of business. the amount of loss under this coverage. We will pay for such LMCIT BM-200(11/01)(Rev.11/04) Page 1 of 12 c. Service Interruption f. Demolition and ICC (Increased Cost (1) Any insurance provided for Business of Construction) Income and Extra Expense If an accident to covered equipment coverage is extended to apply to damages a building that is covered loss as qualified below. property; and the loss is increased by (2) The covered equipment is owned by a enforcement of any ordinance or law in (a) Utility, force at the time of the accident that regulates the construction or repair of (b) Landlord, or buildings, or establishes zoning or land (c) Other supplier use requirements, we will pay for the with whom you have a contract to following additional costs to comply with provide you with any of the following such ordinance or law: services: electrical power, (1) Your actual expenditures for the communications,waste disposal, air cost to demolish and clear the site of conditioning, refrigeration, heating, undamaged parts. gas, air,water or steam. (2) Your actual expenditures for The most we will pay for loss or damage increased costs to repair, rebuild, or under this coverage is $100,000. construct the building. If the building is repaired or rebuilt, it must be d. Perishable Goods intended for similar use or (1) We will pay for your loss of occupancy as the current building, perishable goods due to spoilage. unless otherwise required by zoning (2) We will also pay for such loss or land use ordinance or law. caused by an accident to covered (3) Your loss as described in Business equipment owned by a Income and Extra Expense (a) Utility, coverage caused by loss covered in (1)or(2) above. (b) Landlord, or We will not pay for: (c) Other supplier (4) Any fine; with whom you have a contract to (5) Any liability to a third party; provide you with any of the following services: electrical power, (6) Any increase in loss due to a communications, waste disposal, air pollutant; or conditioning, refrigeration, heating, (7) Increased construction costs until gas, air,water or steam. the building is actually repaired or (3) We will also pay for your loss of replaced. perishable goods due to The most we will pay for loss or damage contamination from the release of under this coverage is $100,000. refrigerant, including but not limited to ammonia. g. Expediting Expenses (4) We will also pay any necessary With respect to your damaged covered expenses you incur to reduce the property, we will pay the reasonable amount of loss under this coverage. extra cost to: We will pay for such expenses to the (1) Make temporary repairs; and extent that they do not exceed the (2) Expedite permanent repairs or amount of loss that otherwise would have been payable under this permanent replacement. coverage. The most we will pay for loss or damage The most we will pay for loss or damage under this coverage is $100,000. under this coverage is$100,000. h. Pollutants e. Data Restoration We will pay for the additional cost to We will pay for your cost to research, repair or replace covered property replace and restore data including because of contamination by a pollutant. programs and operating systems. The This includes the additional expenses to most we will pay for loss or damage clean up or dispose of such property. under this coverage is $100,000. Additional costs mean those beyond LMCIT BM-200(11/01)(Rev.11/04) Page 2 of 12 what would have been required had no you alleging that you are liable for pollutant been involved. damage to property of another in We will also pay for additional loss as your care, custody or control, that described in Business Income and Extra was directly caused by an accident Expense,and Perishable Goods to covered equipment, we will either: coverages caused by such (a) Settle the claim or suit, or contamination. (b) Defend you against the claim The most we will pay for loss or damage or suit but keep for ourselves under this coverage is $100,000. the right to settle it at any point. i. CFC Refrigerants (2) We will pay, with respect to any We will pay for the additional cost to claim or suit we defend: repair or replace covered property (a) All expenses we incur; because of the use or presence of a (b) The cost of bonds to release refrigerant containing CFC attachments. we do not have to (chlorofluorocarbon)substances. This furnish these bonds; means the additional expense to do the (c) All reasonable expenses least expensive of the following: incurred by you at our request to (1) Repair the damaged property and assist us in the investigation or replace any lost CFC refrigerant; defense of the claim or suit, (2) Repair the damaged property, including actual loss of earnings retrofit the system to accept a non- up to $250 a day because of CFC refrigerant and charge the time off from work; system with a non-CFC refrigerant; (d) All costs taxed against you in or any suit we defend; (3) Replace the system with one using a (e) Prejudgment interest awarded non-CFC refrigerant. against you on that part of the Additional costs mean those beyond judgment we pay. If we make what would have been required had no an offer to pay the applicable CFC refrigerant been involved. limits, we will not pay any We will also pay for additional loss as prejudgment interest based on described in Business Income and Extra that period of time after the Expense, and Perishable Goods offer; and coverages caused by such loss. (f) All interest on the full amount of The most we will pay for loss or damage any judgment that accrues after under this coverage is $100,000. entry of the judgment and before we have paid, offered to pay, or j. Ice Rink Buried Piping deposited in court the part of the We will pay for loss or damage caused judgment th is within the by or resulting from an accident to applicable lim its. buried piping at an ice rink. The most m. Mold we will pay under this coverage is $50,000. (1) We will pay for loss, damage or expense caused by mold, only when mold is the direct result of an k. Newly Acquired Locations accident to covered equipment that All coverages provided by this Coverage occurs during the policy period. This Part are extended to a newly acquired includes, but is not limited to, costs location that you have purchased or arising from clean up, removal, or leased. abatement of such mold. As used in this coverage, the term L Defense loss or damage means: This coverage is automatically included (a) Direct physical loss or damage and does not need to be indicated in the to covered property caused by Declarations. mold including the cost of (1) If a claim or suit is brought against removal of the mold; LMCIT BM-200(11/01)(Rev.11/04) Page 3 of 12 (b) The cost to tear out and replace results, we will pay for that resulting loss any covered property as needed or damage. to gain access to the mold; b. The enforcement of any ordinance,law, (c) The cost of testing performed regulation, rule or ruling regulating or after removal, repair, restricting repair, replacement, replacement or restoration of alteration, use, operation, construction the damaged property is or installation, except as provided under completed, provided there is a the following coverages: Demolition and reason to believe that mold is ICC, Pollutants or CFC Refrigerants. present; and c. Any earth movement, including but not (d) Additional loss as described in limited to earthquake, subsidence, Business Income and Extra sinkhole collapse,landslide, mudslide, Expense coverages caused by earth sinking,tsunami or volcanic action. such loss. d. Flood, surface water,waves,tides,tidal (2) The most we will pay for loss or waves, overflow of any body of water, or damage under this coverage is their spray, all whether driven by wind or $1,000,000. Regardless of the not. number of claims, the most we will However, if electrical covered equipment pay for the total of all loss or requires drying out because of the damage arising out of all accidents above, we will pay for the direct to covered equipment which take expenses of such drying out, subject to place within the 12-month period the applicable Property Damage limit starting with the beginning of the and deductible. present annual policy period is e. Windstorm or hail. $1,000,000. With respect to a particular accident which results in However, we will pay if: mold, we will not pay more than a (1) Covered equipment located within a total of$1,000,000 even if the mold building or structure suffers an continues to be present or active or accident that results from rain, recurs in a later policy period. snow, sand or dust; and (3) The coverage provided under this (2) The building or structure did not first Mold Coverage does not increase sustain wind or hail damage to its the Equipment Breakd wn Limit on roof or walls through h which the rain, any covered property. If a particular snow, sand or dust entered. occurrence results in loss or f. Nuclear reaction or radiation, or damage by mold, and other loss or radioactive contamination, however damage, we will not pay more, for caused. the total of all loss or damage,than g. War, including undeclared or civil war; the Equipment Breakdown Limit on Warlike action by a military force, the affected covered property. including action in hindering or If there is covered loss or damage to defending against an actual or expected covered property not caused by attack, by any government, sovereign or mold, loss payment will not be other authority using military personnel limited by the terms of this or other agents;or coverage, except to the extent that Insurrection, rebellion,revolution, mold causes an increase in the loss. usurped power or action taken by Any such increase in the loss will be governmental authority in hindering or subject to the terms of this defending against any of these. coverage. h. Fire or combustion explosion,whether or not caused by or resulting from an B. EXCLUSIONS accident. 1. We will not pay for loss or damage caused i. Any of the following tests: by or resulting from: (1) A hydrostatic, pneumatic or gas a. Depletion, deterioration, corrosion, pressure test of any boiler or erosion, wear and tear, or other pressure vessel; or gradually developing conditions. (2) An insulation breakdown test of any But if loss or damage from an accident type of electrical equipment. LMCIT BM-200(11/01)(Rev.11/04) Page 4 of 12 j. Water or other means used to extinguish cause of loss is provided by another a fire, even when such an attempt is coverage part or policy of insurance you unsuccessful. have. k. Any of the following causes of loss: (1) Lightning, Explosion (except for 4. With respect to Perishable Goods coverage, steam or centrifugal explosion); we will also not pay for loss or damage as a Smoke, Aircraft or Vehicles, Riot or result of your failure to use all reasonable Civil Commotion,Vandalism or means to protect the perishable goods from Sprinkler Leakage; damage following an accident. (2) Breakage of Glass, Falling Objects, Weight of Snow, Ice or Sleet or 5. We will also not pay for loss or damage Water Damage (including Water caused by or resulting from any defect, Damage that is the result of an programming error, programming limitation, accident); or virus, loss of data, loss of access, loss of (3) Freezing (caused by cold weather), use, loss of functionality or other condition Collapse or Molten Material. within or involving data or media of any kind. I. The presence, growth, proliferation, But if loss or damage from an accident spread or activity of mold. This includes, results, we will pay for that resulting loss or but is not limited to, costs arising from damage. clean up, removal,or abatement of such mold. However, if an accident occurs, 6. None of the following is covered equipment: we will pay the resulting loss or damage. a. Structure,foundation, cabinet, This exclusion does not apply: compartment, or air supported structure (1) to spoilage of personal property that or building; is perishable goods, to the extent b. Insulating or refractory material; that spoilage is covered under c. Sewer tin underground vessels or Perishable Goods p P 9� 9 nods coverage; or piping,or piping forming a part of a (2) to the extent that coverage is sprinkler system, except as provided provided under Mold coverage for under Ice Rink Buried Piping coverage; that portion of any loss or damage d. Water piping other than boiler feed water resulting from the presence, growth, piping, boiler condensate return piping or proliferation,spread or activity of water piping forming a part of a mold as a result of an accident to refrigerating or air conditioning system; covered equipment. e. Vehicle, aircraft, floating vessel or any equipment mounted on such vehicle, 2. With respect to Business Income, Extra aircraft or floating vessel. However, any Expense and Service Interruption property that is stationary, permanently coverages, we will also not pay for: installed at a covered location and that a. Loss caused by your failure to use due receives electrical power from an diligence and dispatch and all external power supplier will not be reasonable means to resume business considered a vehicle, aircraft or floating at the described location; vessel; b. That part of any loss that is due solely to f. Dragline, excavation or construction the suspension, lapse or cancellation of equipment; a contract following an accident g. Equipment manufactured by you for extending beyond the time business sale; or income is applicable; or h. Electronic data processing equipment, c. Delay in resuming operations due to the unless used to control or operate need to reconstruct or re-input data or covered equipment. Electronic Data programs on media. Processing Equipment includes programmable electronic equipment that 3. With respect to Service Interruption is used to store, retrieve and process coverage and paragraph (2)of Perishable data; and associated peripheral Goods coverage, we will also not pay for equipment. loss caused by or resulting from any of the causes of loss named in Exclusion 1.k. 7. Covered property does not include live above, whether or not coverage for such animals. LMCIT BM-200(11/01)(Rev.11/04) Page 5 of 12 C. LIMITS OF INSURANCE 2. We will not pay for loss or damage resulting Any payment made under this Coverage Part will from any accident until the amount of not be increased if more than one city is shown loss or damage exceeds the applicable in the Declarations. deductible or deductibles shown in the If two or more limits apply to the same portion of Declarations. We will then pay-the amount of a loss, we will only pay the smaller limit for that loss or damage in excess of the applicable portion of the loss. deductible or deductibles, subject to the applicable limits shown in the Declarations. 1. Equipment Breakdown Limit The most we will pay for loss or damage E. LOSS CONDITIONS arising from any one accident is the amount The following conditions apply in addition to the shown as the Equipment Breakdown Limit in the Declarations. This total limit applies to all Common Covenant Conditions: coverages under this Coverage Part except 1. Abandonment Defense. The costs we incur under the There can be no abandonment of any Defense coverage shall not reduce the property to us. available Equipment Breakdown Limit. 2. Appraisal 2. Coverage Limits If we admit liability for a loss and we and you The limit of your insurance under each of the disagree on the value of the property or coverages from loss or damage arising from business income, either may make written any one accident is the amount shown for demand for an appraisal of the loss. In this that coverage. Unless otherwise shown event, each party will select a competent below, these limits are a part of, and not in and impartial appraiser. The two appraisers addition to, the Equipment Breakdown Limit. will select an umpire. If they cannot agree, either may request that selection be made 3. Business Income and Extra Expense Limit by a judge of a court having jurisdiction. The The limit of your insurance for Business - appraisers will state separately the value of Income and Extra Expense covers es is the property or business income. If they fail '° g to agree, they will submit their differences to $5,000,000. This limit is in addition to the the umpire. A decision agreed to by any two Equipment Breakdown Limit. will be binding. Each party will: 4. Newly Acquired Locations Limit a. Pay its chosen appraiser;and The limit of your insurance for Newly b. Bear the other expenses of the appraisal and umpire equally. Acquired Locations coverage is $5,000,000. This limit is in addition to the Equipment Breakdown Limit. 3. Brands and Labels However, any newly acquired location that If branded or labeled merchandise that is has covered electrical generating equipment covered property is damaged by an accident must be reported to us within 90 days after to covered equipment, but retains a salvage you have purchased or leased the location value,you may, at your expense: and will be subject to the terms and a. Stamp the word SALVAGE on the conditions as determined by us. merchandise or its containers if the stamp will not physically damage the D. DEDUCTIBLE merchandise; or 1. If deductibles vary by type of covered b. Remove the brands or labels, if doing so equipment and more than one type of will not physically damage the covered equipment is involved in any one merchandise. You must re-label the accident, the highest deductibles will apply. merchandise or its containers to comply Unless otherwise shown in the Declarations, with the law. the Deductibles apply to all loss or damage We will pay for any reduction in value of the covered by this Coverage Part. salvage merchandise resulting from either of these two actions. Defense Coverage is not subject to a If a Brands and Labels Limit is shown on the deductible. Declarations, we will not pay more than the indicated amount for coverage under this Condition. LMCIT BM-200(11/01)(Rev.11/04) Page 6 of 12 4. Duties In the Event of Loss or Damage reasonable amount of time does not You must see that the following are done in necessarily end when the operations are the event of loss or damage: resumed; a. Give us prompt notice of the loss or c. Using merchandise or other property damage. Include a description of the available to you; property involved; d. Using the property or services of others; or b. As soon as possible,give us a e. Salvaging the damaged property. description of how,when and where the loss or damage occurred; 6. Salvage and Recoveries c. Allow us a reasonable time and When,in connection with any loss under this opportunity to examine the property and Coverage Part,any salvage or recovery is premises before repairs are undertaken received subsequent to the payment of such or physical evidence of the accident is loss, the loss shall be refigured on the basis removed. But you must take whatever on which it would have been settled had the measures are necessary for protection amount of salvage or recovery been known from further damage; at the time the loss was originally d. Permit us to inspect the property and determined. Any amounts thus found to be records.Also permit us to take samples due either party from the other shall be paid of damaged and undamaged property promptly. for inspection,testing and analysis; e. If requested, permit us to question you 7. Valuation under oath,at such times as may be a. Our payment for damaged covered reasonably required about any matter property will be the smallest of: relating to this insurance or your claim (1) The cost to repair the damaged including your books and records. In property; such event,your answers must be (2) The cost to replace the damaged signed; property on the same site; or f. Send us a signed,sworn proof of loss containing the information we request to (3) The amount you actually spend that settle the claim. You must do this within necessary repair or replace the 60 days after our request; damaged property. erty. g. b. Except as described under f. below,you . Cooperate with us in the investigation and settlement of the claim; must pay the extra cost of replacing damaged property with property of a h. Promptly send us any legal papers or better kind or quality or of a different size notices received concerning the loss or or capacity_ damage; and c. If you do not repair or replace the i. Make no statement that will assume any damaged property within 24 months obligation or admit any liability, for any after the date of the accident, then we loss or damage for which we may be will pay only the smaller of the: liable, without our consent. (1) Cost it would have taken to repair at We may examine any city under oath,while the time of the accident; or not in the presence of any other city and at (2) Actual cash value; at the time of the such times as may be reasonably required, accident. about any matter relating to this coverage or the claim, including a city's books and d. If any of the following conditions are records. In the event of an examination, a met, property held by you for sale will be citys answers must be signed. valued at the sales price as if no loss or damage had occurred, less any 5. Reducing your Loss discounts and expenses you otherwise would have had: You must reduce your loss, if possible, by: (1) The property was manufactured by a. Resuming business, partially or you; completely; (2) The sales price of the property is b. Making up lost business within a less than the replacement cost of reasonable amount of time. This includes the property; or working extra time or overtime at the location of loss or at another location. The (3) You are unable to replace the property before its anticipated sale. LMCIT BM-200(11/01)(Rev.11/04) Page 7 of 12 e. The most we will pay for loss or damage this Coverage Part as an additional city, we arising from any one accident is the will consider them to be a city under this amount shown as the Equipment Coverage Part only to the extent of their Breakdown Limit in the Declarations. This interest. total limit applies to all coverages under this Coverage Part except Defense. The 2. Bankruptcy costs we incur under the Defense The bankruptcy or insolvency of you or your coverage shall not reduce the available estate will not relieve us of any obligation Equipment Breakdown Limit except as under this Coverage Part. specifically provided for under Data Restoration Coverage, data and media 3. Concealment, Misrepresentation or Fraud will be valued on the following basis: (1) For mass-produced and We will not pay for any loss if you or any other city at any time intentionally conceal or commercially available software, at misrepresent a material fact concerning: the replacement cost. a. This Coverage Part; (2) For all other data and media, at the b. The covered property; cost of blank material for reproducing the records. This includes data c. Your interest in the covered property; or representing financial records. We d. A claim under this Coverage Part. will not pay based on their face value. f. Environmental, Safety and Efficiency 4. Jurisdictional Inspections Improvements If any covered equipment requires inspection If covered equipment requires to comply with state or municipal boiler and replacement due to an accident, we will pressure vessel regulations, we agree to pay your additional cost to replace with perform such inspection on your behalf. equipment that is better for the environment, safer or more efficient than 5. Legal Action Against Us the equipment being replaced. No one may bring a legal action against us However, we will not pay more than under this Covenant unless: 125%of what the cost would have been to repair or replace with like kind and a. There has been full compliance with all quality. This coverage does not increase the terms of this Covenant; and any of the applicable limits. This b. The action is brought within two years coverage does not apply to any property after the date of the accident; or indicated as being valued on an Actual c. We agree in writing that you have an Cash Value basis. obligation to pay for damage to covered g. In any event, we will not pay more than property of others or until the amount of the following,whichever is the least: that obligation has been determined by (1) Your financial interest in the covered final judgment or arbitration award. No property, one has the right under this Covenant to (2) 150% of the estimated replacement bring us into an action to determine your cost of the covered property as liability. stated in the Schedule of Covered Property;or 6. Loss Payable (3) The Actual Cash Value of the a. We will pay you and the loss payee covered property, if the covered shown in the Declarations for loss property is vacant property. covered by this Coverage Part, as However, any amounts paid for interests may appear.The insurance covers the interest of the loss payee coverages as provided by A. Coverages, unless the loss results from conversion, 2.b. 2.j. are in addition to these secretion or embezzlement on your part. limitations. b. We may cancel the covenant as allowed F. ADDITIONAL CONDITIONS by the Cancellation Condition. The following conditions apply in addition to the Cancellation ends this agreement as to Common Conditions: the loss payee's interest. If we cancel, we will mail you and the loss payee the 1. Additional Covered Party same advance notice. If a person or organization is designated in LMCIT BM-200(11/01)(Rev.11/04) Page 8 of 12 y c. If we make any payment to the loss cancellation if we cancel for your payee, we will obtain their rights against nonpayment of premium; or any other party. (2) 30 days before the effective date of cancellation if we cancel for any 7. Mortgage Holders other reason. a. The term mortgage holder includes g. If we elect not to renew this covenant, trustee. we will give written notice to the b. We will pay for direct damage to covered mortgage holder at least 10 days before property due to an accident to covered the expiration date of this covenant. equipment to you and each mortgage h. If we suspend coverage, it will also be holder shown in the Declarations in their suspended as respects the mortgage order of precedence, as interests may holder. We will give written notice of the appear. suspension to the mortgage holder. c. The mortgage holder has the right to receive loss payment even if the 8. Other Insurance mortgage holder has started foreclosure a. You may have other insurance subject or similar action on the covered property. to the same plan,terms, conditions and d. If we deny your claim because of your provisions as the insurance under this acts or because you have failed to Coverage Part. If you do, we will pay our comply with the terms of this Coverage share of the covered loss or damage. Part, the mortgage holder will still have Our share is the proportion that the the right to receive loss payment if the applicable limits under this Coverage mortgage holder: Part bear to the Limits of Insurance of all (1) Pays any premium due under this insurance covering on the same basis. Coverage Part at our request if you b. If there is other insurance covering the have failed to do so; same loss or damage, other than that (2) Submits a signed, sworn proof of described in (a)above,we will pay only loss within 60 days after receiving the amount of covered loss or damaged notice from us of your failure to do in excess of the amount due from that so; and other insurance,whether you can collect (3) Has notified us of any change in on it or not. ownership or material change in risk In no case will we pay more than the known to the mortgage holder. applicable limits. All of the terms of this Coverage Part will then apply directly to the mortgage holder. 9. Coverage Period, Coverage Territory e. If we pay the mortgage holder for any loss Under this Coverage Part: and deny payment to you because of your a. The accident must occur: acts or because you have failed to comply (1) During the Coverage Period shown with the terms of this Coverage Part: ( ) 9 9 in the Declarations; and (1) The mortgage holder's right under (2) Within the Coverage Territory. the mortgage will be transferred to us to the extent of the amount we b. The Coverage Territory is: pay; and (1) The United States of America (2) The mortgage holder's right to recover (including its territories and the full amount of the mortgage possessions); holder's claim will not be impaired. (2) Puerto Rico; and At our option, we may pay to the (3) Canada. mortgage holder the whole principal on the mortgage plus any accrued interest. 10. Privilege to Adjust with Owner In this event,your mortgage and note In the event of loss or damage involving will be transferred to us and you will pay property of others in your care, custody or your remaining mortgage debt to us. control, we have the right to settle the loss or f. If we cancel this covenant, we will give damage with respect to such property with written notice to the mortgage holder at the owner of the property. A receipt for least: payment from the owners of that property (1) 10 days before the effective date of will satisfy any claim of yours. LMCIT BM-200(11/01)(Rev.11/04) Page 9 of 12 11. Suspension e. We will return premium to you if a Whenever covered equipment is found to be location with replacement cost values of in, or exposed to, a dangerous condition, greater than$5,000,000 is deleted any of our representatives may immediately during the Covenant Period. suspend the coverage against loss from an accident to that covered equipment. This G. DEFINITIONS can be done by delivering or mailing a 1. Accident is defined in A.1.a., COVERAGE - written notice of suspension to: Covered Cause of Loss. a. Your last known address; or b. The address where the covered 2. Boilers and Vessels means: equipment is located. a. Any boiler, including attached steam, Once suspended in this way,your coverage condensate and feed water piping;and can be reinstated only by an endorsement b. Any fired or unfired pressure vessel for that covered equipment. subject to vacuum or internal pressure If we suspend your coverage,you will get a other than the static pressure of its pro rata refund of premium for that covered contents. equipment. But the suspension will be This term does not appear elsewhere in this effective even if we have not yet made or coverage form, but may appear in the offered a refund. Declarations. 12. Transfer of Rights of Recovery Against 3. Business Income means the sum of: Others to Us a. The Net Income (net profit or loss before If any person or organization to or for whom income taxes)that would have been we make payment under this Coverage Part earned or incurred; and has rights to recover damages from another, b. Continuing normal operating expenses those rights are transferred to us to the incurred, including employee payroll. extent of our payment.That person or organization must do everything necessary 4. City means governmental body or entity first to secure our rights and must do nothing named in the Declarations. For purposes of after loss to impair them. But you may waive this coverage, city includes relief your rights against another party in writing: associations. Unless specifcal!y named in a. Prior to a loss to your covered property. the Declarations, city shall not include: b. After a loss to your covered property a. Gas, electrical, or team utilities only if, at time of loss, that party is one of commission; the following: b. Port authority, housing and (1) Someone insured by this insurance; or redevelopment authority, economic (2) A business firm: development authority, area or municipal (a) Owned or controlled by you; or redevelopment authority, or similar (b) That owns or controls you. agency: c. Municipal power agency; 13. Premiums and Premium Adjustments d. Municipal gas agency; a. You agree to furnish us with a schedule e. Hospital or nursing home board or of locations prior to the beginning of commission; each Covenant Period. f. Airport commission; b. These schedules must include all g. Welfare or public relief agency; locations that were covered by your prior h. School board; or covenant but were not described in the i. Joint p ower entities. Schedule of Covered Property. c. The initial annual premiums will be 5. Covered Equipment is defined in A.1.b., based upon these schedules and the COVERAGE-Covered Cause of Loss. appropriate replacement cost values. d. You will pay us additional premium if a 6. Covered Electrical Generating Equipment new location with replacement cost means: values of greater than $5,000,000 is i a. Engine generators, bu t only if you do not added during the Covenant Period. own a steam, gas,water or wind turbine; LMCIT BM-200(11/01)(Rev.11/04) Page 10 of 12 b. Electrical transformers, switchgear and (1) Boilers used primarily to provide power lines used to convey the steam for one or more turbine- generated electricity; and generator units; c. Associated equipment necessary for the (2) Turbine-generators (including operation of any of the equipment listed steam,gas,water, or wind turbines); in a. and b. above. (3) Engine-generators, but only if you also own a steam, gas, water, or 7. Covered Property means property that: wind turbine; a. You own;or (4) Fuel cells or other alternative b. Is in your care,custody or control and electrical generating equipment; for which you are legally liable while at a (5) Electrical transformers, switchgear location described in the Declarations. and power lines used to convey the But, covered property does not include generated electricity;and excluded electrical generating equipment. (6) Associated equipment necessary for the operation of any of the 8. Data means information or instructions equipment listed in (1)through (5) stored in digital code capable of being above. processed by machinery. b. Excluded Electrical Generating 9. Employee means: Equipment does not mean: a. A person whom you compensate directly (1) Elevator or hoist motors that by salary,wages or commission, and generate electricity when releasing who you have the right to direct or cable; or control while performing duties for you; (2) Equipment intended to generate b. Member of the city council; electricity solely on an emergency, c. Member of a city board, commission, or back-up basis. committee which is not excluded by the definition of city, 11. Extra Expense means the additional cost d. Elected or appointed official of the city, you incur to operate your business during e. Volunteer person or organization while the interruption over and above the cost that normally would have been incurred to acting on behalf of the city and subject to the city's direction and control; operate the business during the same period had no accident occurred. f. Other authorized person or agent of the city while acting on behalf of the city, but 12. Joint Power Entity means an operating excludes independent contractors; entity created by two or more governmental g. City relief association members, officers, units entering into an agreement as provided and employees;or by statute for the joint exercise of h. Any natural person employed by an governmental powers. An intergovernmental employment contractor while that person agreement will be deemed to create a joint is subject to your direction and control powers entity if the agreement establishes a and performing services for you board with the effective power to do any of excluding, however, any such person the following, regardless of whether the while having care and custody of specific consent of the constituent property outside the premises. governmental units may also be required: But employee does not mean any agent, a. To receive and expend funds; broker,factor, commission merchant, b. To enter into contracts; consignee, independent contractor or c. To hire employees; representative of the same general d. To purchase or otherwise acquire or character. hold real or personal property;or 10. Excluded Electrical Generating e. To sue or be sued. Equipment means: a. Equipment which converts any other 13. Media means all forms of electronic, form of energy into electricity. This magnetic and optical tapes and discs for use includes, but is not limited to,the in any electronic computer or electronic data following: processing equipment. LMCIT BM-200(11/01)(Rev.11t04) Page 11 of 12 14. Mold means any mold,fungus, mildew or 24. We means the League of Minnesota yeast, including any spores or toxins Insurance Trust. produced by or emanating from such mold, fungus, mildew or yeast. 25. Vacant property means: a. Covered property is deemed to be 15. One Accident means: vacant property if for a period of 60 If an initial accident causes other accidents, consecutive days less than 31%of the all will be considered one accident. All covered property square footage is accidents that are the result of the same either used by the city for customary event will be considered one accident. operations or is leased out b. Covered property rented or leased to the 16. Our means the League of Minnesota city is deemed to be vacant property if Insurance Trust. for a period of 60 consecutive days the covered property does not contain 17. Perishable Goods means any covered enough property to conduct customary property subject to deterioration or operations. impairment as a result of a change of However, builders risk property is not conditions, including but not limited to considered vacant property. temperature, humidity or pressure. 26. Builders Risk Property means: 18. Pollutant means any substance other than a. Covered property in the course of ammonia that has been declared to be construction; hazardous to health by a governmental agency. b. Alterations or repair to the city's existing covered property; 19. Production Machinery means: c. Addition to the city's existing covered Any machine or apparatus that processes or property produces a product intended for eventual d. Builders risk property also includes: sale. However,production machinery does (1) Foundation of covered property in not mean any fired or unfired pressure the course of construction or an vessel other than a cylinder containing a addition to the city's existing covered movable plunger or piston. property, This term does not appear elsewhere in this (2) Materials, equipment and supplies coverage form, but may appear in the used for construction,alteration or Declarations. repair,provided such property is intended to be permanently in or on 20. Suit means a civil proceeding to which this the builders risk property, and insurance applies and includes: (3) Temporary structures built or a. An arbitration proceeding in which assembled at a location described in damages are claimed and to which you the Declarations including cribbing, must submit or do submit with our scaffolding and construction forms consent; or used in the course of construction or b. Any other alternative dispute resolution alterations or repair of the builders risk property. proceeding in which damages are claimed and to which you submit with our consent. 21. Us means the League of Minnesota Insurance Trust. 22. You means the city shown in the Declarations. 23. Your means the city shown in the Declarations. LMCIT BM-200(11/01)(Rev.11/04) Page 12 of 12 6 4000. SITrago N�AND186ILI9�" Quick Reference Chart Equipment Insurance Vs. Warranties and Contracts Typical "Full" Mfg.'s Maint. Equipment Type Of Occurrence Or Service Warranty Contract Insurance Pay for direct damage to NO NO YES surrounding property Provide required jurisdictional NO NO YES inspection services Pay for lost refrigerant NO NO YES Pay for breakdown caused by YES NO YES faulty materials or workmanship Pay for labor cost to repair/replace NO SOMETIMES YES parts Pay for accidental breakdown NO YES YES (see Exclusions) Pay for Business Income losses NO NO YES (Optional) Pay for Extra Expense of rental NO NO YES equipment,rental facilities and (Optional) temporary repairs Pay for spoilage of perishables NO NO YES (Optional) Pay for Ammonia Contamination NO NO YES of product (Optional) Pay for operator error or misuse NO NO YES of equipment Pay for full repair or replacement NO NO YES cost of parts and property Pay for Expediting Expenses of NO NO YES overtime,labor,fast freight,etc. Pay for refrigerant lost through NO NO NO leakage Oil,clean,adjust,change filters,etc. NO YES NO Repair and replace worn parts NO YES NO Jf 1 \ f r " Equipment f, � t� � Failures and :11 III 1 7llJI l A Handy Reference Guide ,,,, ,„.., ,,,,.,,,b,i,-.�, T ,I fly, ., . ),,, . , 1,1,,,s,,,,,,,,,,,,,,,,,„„, \ a-`E�''ti w, A world that depends on equipment Businesses, institutions and municipalities are acquiring and increasingly '''. relying on costly equipment and new technologies. Whether it's electrical ::j �. , supply and distribution, environmental controls, refrigeration or computer I fi.A.-"�* - �' �- systems, equipment is vital in today's world. Reliance on new technologies J. �, .a I r � � �� and equipment has actually led to a greater probability that a business- '. 4 critical system will fail. Understanding what can go wrong with equipment r is a key to preventing losses and protecting the bottom line. *y, �..` �` 10 Insurance that protects equipment — t and the bottom line ^t, Equipment is exposed to unique risks that other property is not, such ' ' as electrical short circuits and mechanical forces. Unbudgeted losses from �w a breakdown can be extremely costly, and in many cases, greatly impact , ; - the bottom line. Therefore, equipment breakdown coverage is needed to pay for the financial loss incurred as a consequence of a breakdown. : . 1 , 4 r 5' Insurance that protects the heart of your business ' ` ` Equipment breakdown coverage protects the heart of your business — , A ._. _µ the equipment, machinery and systems that run your business. Equipment , ' ; breakdown insurance pays for damage caused by: '`G �� 4 "N: t • Electrical malfunction E � a = a • Mechanical breakdown ;y _° .� ' • Power surges �' • Centrifugal force i v i .11g-i-; a i r ; ® And more J� J' j s �co mmon f J�5 4 ` ! 4. w � T r t , ,/ j S / • equipment �� r � tt.c. t . xr failures and �_� .. �� c4 f r causes . . • . 4 Electrical Equipment Mechanical Equipment The loss of power can mean the loss of Buildings are loaded with mechanical income and customers. Since the panels, equipment that contains sophisticated, • . • and how circuit breakers and cables in an electri- sensitive technology. Elevators, heating cal system are all interconnected, a short and cooling systems, security systems are circuit in one part can spread to other all heavily used, in some cases around breakdowns parts of the system. The cause can be: • Loose connections the clock, making it even more prone to breakdown. Common causes are: •impact Dust • Oil contamination • Moisture or high humidity • Misalignment can • Supply line surges • Metal fatigue • Insulation deterioration • Operator error the bottom • Overload conditions • Electrical disturbances Electrical system breakdowns are a lead- ° Vibration ing cause of equipment and business • Foreign material line• interruption losses. It's a growing problem Mechanical equipment breakdown can and the losses can be substantial— significantly impact a business. A break- electrical systems constitute a major down can cost thousands in repair bills, percentage of a property's total value. business interruption and lost income. TYPICAL LOSSES: TYPICAL LOSSES: OFFICE BUILDING HOSPITAL Electrical arcing destroyed three main A turbine generator supplying power to electrical panels and left an office build- a hospital failed when blades broke and ing without power. Temporary measures penetrated the engine. were taken to restore power to tenants — Total Loss: $292,513 particularly to an accounting firm that was in the height of its tax season crunch. PRINTER Total Loss: $1,597,389 A bolt came loose and fell into a high- APARTMENT BUILDING speed press, damaging the cylinder An apartment complex's aluminum and gears. electrical supply bus burned out, severely Total Loss: $136,693 damaging electrical wires and cables. MACHINE SHOP Angry residents had to be relocated. A power surge from a utility line Equipment Repair Cost. $118,681 damaged two computer circuit boards, Relocation Cost: $ 72,152 halting a metal shearing operation for Total Loss: $190,833 nearly a week. Materials and workers FURNITURE MANUFACTURER were sent to another plant several Sawdust in an electrical distribution hundred miles away to meet production panel severely damaged the interior of the requirements. �'"'t`"�v, panel. Overtime was required to make up Repair Cost: $ 9,485 . �°' ```".' lost production. Extra Expense. $42,541 e Repair Cost: $21,087 Total Loss: $52,026 THE HARTFORD STEAM BOILER INSPECTION Business Interruption: $14,600 AND INSURANCE CO. Total Loss: $35,687 1 s ��''' `., ems" 9 (`,w ' c �`' ! a i 'w wig 1 A( i .( /. ' .T.. + 1 x, +C 4 x' r,,I-,1 r 1\-,,,," fi14--.E.--i,..„ .k P. F� 1. 7 )� ' K M ,1, 11 x 1 ., t x 1\'tl t� 1151111 1I�t�t V,Li t11�1'∎11,1(171 4' t I,-, I - 4 ,,y1 ,-...:41:, - I' ' ' 7 '.. '4,*,,,,' 4 1.. 1,(-`):,'''2 al 4 i" i''' r� l g ,. „ 1 - - r.:— .},---. /:as .'",„ ., ,. . , -, ',- /L., 1 . ,,- 4t..,' „ —, ,„..,,,41; '': '' i 'i = - r' t w ': < s. Air Conditioning and Boilers and Business Equipment Refrigeration Systems Pressure Vessels and Systems An air conditioning or refrigeration Boilers are commonly used to generate Computers, faxes, PBX phone systems breakdown can result in business and distribute heat. Cookers, sterilizers and communications equipment rely on interruption that may far exceed the and vulcanizers also use boilers. This sensitive electronic technology that is property damage loss. Dependence on equipment is vulnerable to breakdown prone to breakdown. This equipment is refrigeration increases the likelihood due to: particularly susceptible to damage from: of loss due to spoilage. Common • Pump failure • Power surges causes of these breakdowns include: • Low water cut-off mechanism failure • Power interruptions • Control failure • Control failure • Electrical line surges • Vibration • Scale build-up • Insulation deterioration • Lack of lubrication • Inadequate controls of safety devices • Overload conditions • Scale build-up • Separation of assembled parts • Rapid weather change The effect that a boiler or pressure vessel breakdown can have on an Business equipment breakdown can shut Compressors, which are particularly operation should not be underestimated. an operation down, result in lost income, prone to breakdown, can cost$10,000 Repair costs can soar and lack of heat or and large repair/replacement bills. to $20,000 or more, and replacement hot water can shut down a facility. refrigerant can total in the thousands. TYPICAL LOSSES: TYPICAL LOSSES: MUNICIPAL BUILDING TYPICAL LOSSES: SCHOOL A power surge damaged a generator, APARTMENT BUILDING Sediment in a boiler caused a low-water burned out police radio equipment, An air conditioning motor burned out in condition that resulted in severe over- printed circuit boards for a fire alarm a high-rise, senior citizen's apartment firing, shutting down the boiler — and a system, a small transformer, and building. Ninety-plus degree temperatures school. A rental unit was needed until small electric motors. necessitated setting up four rented "spot the damaged boiler could be replaced. Total Loss: $90,160 coolers." Overtime was required to get Property Damage: $98,500 OFFICE BUILDING the motor back on line. Extra Expense- $ 25,164 Property Damages $83,557 Total Loss: $123,664 Electrical power supply voltage Extra Expense: $ 16,794 fluctuation caused two telephone Total Loss: $100,351 I MANUFACTURER system terminal boards to burn out. A faulty circuit in a water pump caused Total Loss: $52,500 FOOD PROCESSOR a fire tube boiler to dry fire. The boiler SERVICE STATION An ammonia line ruptured when a corn- was severely damaged. A power surge damaged a service station's pressor crankshaft and its connecting rod Total Loss: $90,600 electronics, including the computerized broke. Fresh scallops were contaminated with ammonia. Rental units were needed CHURCH diagnostic system, telephone, paging while the new compressor was installed. A section of a boiler and a steam pipe system and the security system. Total Loss: $65,289 fitting cracked. Steam damaged the ; Total Loss: $33,388 church organ, choir robes, and public MEDICAL CLINIC address system. 1 A control failed on a medical clinic's i Total Loss: $34,969 refrigerator, causing the temperature to dive into single-digit temperatures. Drugs, which normally are stored between 36 to 43 degrees, had to be discarded. Total Loss. $21,953 • Insurance that pays for Equipment breakdown insurance offers protection from the costs associated with insured losses to a facility's equipment. It pays for: more than just a repai re • Direct property loss — the cost to repair or replace the damaged equipment; • Extra expense losses when a breakdown causes business interruption; • Other expenses incurred to limit the Loss or speed business restoration; • The loss value of spoiled products or materials. Equipment breakdown insurance covers the physical damage — and the financial damage — stemming from equipment failure. It's the bottom-line protection essential for today's equipment-intensive world. More than protection_ At Hartford Steam Boiler, we believe that helping customers prevent costly losses and business interruption is the best kind of insurance. In fact, prevention the company was founded on that principle. Here are just a few of the loss prevention services we offer: • Fax-On-Demand --technical information Y ou need, 24 hours a day. Call 1-800-716-7874. • Inspection Hotline — request a jurisdictional inspection for a boiler or pressure vessel or get an answer to a technical question. Catt 1-800-333-4677, fax 1-800-298-4083, or e-mail NSCINSP_HOTLINE @hsb.com • Infrared Thermography -- to help identify potential problems in your electrical system. �r, ►� 111E HARTFORD ORD STEAM BOILER INSPECTION AND INSURANCE CO. One State Street, P.O. Box 5024 Hartford, CT 06102-5024 http://www.hsb.com 1-800-472-1866 rfl• 'An/ed.",in/OM Thin smnmanr gives oenerat information.For all coverages,conditions and exclusions,refer to the policy. V m '0 fir' m ai E 8 N Q a 0 = Jhh§ . C - -$ i o L SC2i `C N N as ,N 2 Ln ticii O co m p a m x -° o G. Too on , >, N C O. .c N . -am q*g° 6- x E o oy0Cx7 +g, ° °' °� @ °. m a to Q m r, Z.o ° Q 8 S m o �y o ,m . .% yO r''jEA" . 5m mog O gmto ,$aO R. 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O N TN t�t,ON N y - -c c C N a, O p 'tc ++ m b j w m c .�" ti ° g, 'O.e .2 N - , i_ C N3 N 3 N g.r C 2 s. q LO O.{ C C tS•Q % W d lc0 O R} a"3 Ln 0)lG O yc o> oO V N N d+ oo 2 E g 2 m a`�Ni • LLEr e O c„.. o y {gyp Zi E,C N N V 4 G Cl o T = 4- N o i _E c y t' ° g W % O N c •- a Lars N 5 g 67 a0i N E w t-3 N O y 7 N3 ;g..... .% g- ..S. ,-, 2�0 y mti, c o a� 2 2at3it3.3 a,t7�i `0 o-... �' cn-c __.=_ d i 0 3 G 3 2-2 O'E Q c°,o.c g v o-S 6 a • • 09/09/2005 FRI 08:22 FAX Z001/002 SEP-07-2005 07:55 LEAGUE OF MN CITIES 6512911298 P.01 FAX TRANSMISSION League of Minnesota Cities Insurance Trust 145 Univeraite Avenue Went,SC Paul,MN 55103.2044 (851)28141200 -(800)925-1122 r�a„a of JN�ii Choi Fax:(eta)2814298 •TDD:(651)2814290 Mae p,°,,,i„y i„a,.,n www.imne.org To; Landmark Ins From: Patricia Mingee CPGU,CIC Attn:Kate Tipping LMCIT Underwriting pmingeetimnc.org Fax Number: 651.464-7596 Phone Number:651-215-4081 or 800-925-1122 ext 4081 Date: September 7,2005 Total Pages: 2 Subject: City of Oak Park Heights • Comments: re:Equipment Breakdown Quotation-per attached GSA.v ,� a 0Q. Please deliver this fax to the above addressee. If you did not receive all of the pages in good condition, please advise the sender at your earliest convenience. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER *3c — Landmark Insurance Services MEMO Page 1 232 South Lake Street .4 O ,,$ %:, ...:z...77,-,?y,.,r..: z : :° Forest Lake,MN 55025 OAKPA-1 KT 08/24/2005 Phone: 651-464-3333 Fax: 651-464-7596 CMC25101 CP 07/07/2005 07/07/2006 City of Oak Park Heights 14168 Oak Park Blvd PO Bx 2007 Oak Park Heights,MN 55082-6476 °' * \\ \` %/, te. \ /f ,k.- t Here is the League ' s reply to your questions about increased limits on the Umbrella coverage; their note about the 96 Chevy; and their info on Systems Breakdown, including the coverage part that would apply. Please note the last item on the list titled "Quick Reference Chart" - as a matter-of-fact the last three items are not insurable - but on the other hand many other causes of breakdown are - hope it helps ! 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Understanding what can go wrong with equipment is a key to preventing losses and protecting the bottom line. Insurance that protects equipment — ' and the bottom line Equipment is exposed to unique risks that other property is not, such ' • as electrical short circuits and mechanical forces. Unbudgeted losses from 410. p a breakdown can be extremely costly, and in many cases, greatly impact the bottom line. Therefore, equipment breakdown coverage is needed to ` ., pay for the financial loss incurred as a consequence of a breakdown. Insurance that protects the heart of your business Equipment breakdown coverage protects the heart of your business — „ .. °'''? .4 the equipment, machinery and systems that run your business. Equipment breakdown insurance pays for damage caused by: - _;, �;,'t 1 • Electrical malfunction } r N • Mechanical breakdown ' 3 r • Power surges ° 4_ _ • Centrifugal force p^, 1i • And more I I) b , . ''' I " A i ) td? ; e Common � � �� ������ , e � I u� merit � ... 1 8 e a p fait.uresand € .,, . , .., . , , . I, causes . . • Electrical Equipment Mechanical Equipment The loss of power can mean the loss of Buildings are loaded with mechanical income and customers. Since the panels, equipment that contains sophisticated, • • • and how circuit breakers and cables in an electri- sensitive technology. Elevators, heating cal system are all interconnected, a short and cooling systems, security systems are circuit in one part can spread to other all heavily used, in some cases around breakdowns parts of the system. The cause can be: • Loose connections the clock, making it even more prone to breakdown. Common causes are: • Dust • Oil contamination Can impact • Moisture or high humidity • Misalignment 1 1 1 pac 1. • Supply line surges• • Metal fatigue • Insulation deterioration • Operator error the bottom • Overload conditions • Electrical disturbances Electrical system breakdowns are a lead- • Vibration • ing cause of equipment and business Li Foreign material ne• interruption losses. It's a growing problem Mechanical equipment breakdown can and the losses can be substantial — significantly impact a business. A break- electrical systems constitute a major down can cost thousands in repair bills, percentage of a property's total value. business interruption and lost income. TYPICAL LOSSES: TYPICAL LOSSES: OFFICE BUILDING HOSPITAL Electrical arcing destroyed three main A turbine Ppy in 9p enerator supplying power to electrical panels and left an office build- a p 9 hospital failed when blades broke and ing without power. Temporary measures penetrated the engine. were taken to restore power to tenants — Total Loss: $292,513 particularly to an accounting firm that was in the height of its tax season crunch. PRINTER Total Loss: $1,597,389 A bolt came loose and fell into a high- speed press, damaging the cylinder APARTMENT R BUILDING An apartment complex's aluminum and gears. electrical supply bus burned out, severely Total Loss: $136,693 damaging electrical wires and cables. MACHINE SHOP Angry residents had to be relocated. A power surge from a utility line Equipment Repair Cost. $118,681 damaged two computer circuit boards, Relocation Cost: $ 72,152 halting a metal shearing operation for Total Loss: $190,833 nearly a week. Materials and workers FURNITURE MANUFACTURER were sent to another plant several Sawdust in an electrical distribution hundred miles away to meet production panel severely damaged the interior of the requirements. E T1" panel. Overtime was required to make up Repair Cost: $ 9,485 lost production. Extra Expense. $42,541 THE HARTFORD Repair Cost: $21,087 Total Loss: $52,026 STEAM BOILER INSPECTION Business Interruption: $14,600 AND INSURANCE CO. Total Loss: $35,687 * mom p � � 3 L,m a " 1 gyp. t 1''''' ' ' ' . v a a E AjI r . ''' ,41, ipir + ee., _ Air Conditioning and Boilers and Business Equipment Refrigeration Systems Pressure Vessels and Systems An air conditioning or refrigeration Boilers are commonly used to generate Computers, faxes, PBX phone systems breakdown can result in business and distribute heat. Cookers, sterilizers and communications equipment rely on interruption that may far exceed the and vulcanizers also use boilers. This sensitive electronic technology that is r property damage loss. Dependence on equipment is vulnerable to breakdown j prone to breakdown. This equipment is refrigeration increases the likelihood due to: particularly susceptible to damage from: of loss due to spoilage. Common • Pump failure • Power surges causes of these breakdowns include: • Low water cut-off mechanism failure • Power interruptions • Control failure • Control failure • Electrical line surges • Vibration • Scale build-up • Insulation deterioration • Lack of lubrication • Inadequate controls of safety devices • Overload conditions • Scale build-up • Separation of assembled parts • Rapid weather change The effect that a boiler or pressure vessel breakdown can have on an Business equipment breakdown can shut Compressors, which are particularly operation should not be underestimated. an operation down, result in lost income, prone to breakdown, can cost $10,000 Repair costs can soar and Lack of heat or and large repair/replacement bills. to $20,000 or more, and replacement hot water can shut down a facility. refrigerant can total in the thousands. TYPICAL LOSSES: TYPICAL LOSSES: MUNICIPAL BUILDING TYPICAL LOSSES: SCHOOL A power surge damaged a generator, APARTMENT BUILDING Sediment in a boiler caused a low-water burned out police radio equipment, An air conditioning motor burned out in condition that resulted in severe over- printed circuit boards for a fire alarm a high-rise, senior citizen's apartment firing, shutting down the boiler — and a system, a small transformer, and building. Ninety-plus degree temperatures school. A rental unit was needed until small electric motors. necessitated setting up four rented "spot the damaged boiler could be replaced. Total Loss: $90,160 1 coolers." Overtime was required to get Property Damage:Extra Expense. $98,500 OFFICE BUILDING the motor back on line. $ 25,164 Electrical power supply voltage Property Damage. $83,557 Total Loss: $123,664 fluctuation caused two telephone Extra Expense: $ 16,794 MANUFACTURER system terminal boards to burn out. Total Loss: $100,351 A faulty circuit in a water pump caused Total Loss: $52,500 FOOD PROCESSOR a fire tube boiler to dry fire. The boiler An ammonia line ruptured when a corn- SERVICE STATION P was severely damaged. A power surge damaged a service station's pressor crankshaft and its connecting rod Total Loss: $90,600 electronics, including the computerized broke. Fresh scallops were contaminated with ammonia. Rental units were needed CHURCH diagnostic system, telephone, paging while the new compressor was installed. A section of a boiler and a steam pipe system and the security system. Total Loss: $65,289 fitting cracked. Steam damaged the Total Loss: $33,388 church organ, choir robes, and public MEDICAL CLINIC address system. A control failed on a medical clinic's Total Loss: $34,969 refrigerator, causing the temperature to dive into single-digit temperatures. Drugs, which normally are stored between 36 to 43 degrees, had to be discarded. Total Loss: $21,953 E Insurance that pays for Equipment breakdown insurance offers protection from the costs associated more than just a repair. with insured losses to a facility's equipment. It pays for: • Direct property loss — the cost to repair or replace the damaged equipment; • Extra expense losses when a breakdown causes business interruption; • Other expenses incurred to limit the loss or speed business restoration; • The loss value of spoiled products or materials. Equipment breakdown insurance covers the physical damage — and the financial damage — stemming from equipment failure. It's the bottom-line protection essential for today's equipment-intensive world. More than protection— At Hartford Steam Boiler, we believe that helping customers prevent costly losses and business interruption is the best kind of insurance. In fact, prevention the company was founded on that principle. Here are just a few of the loss prevention services we offer: • Fax-On-Demand — technical information you need, 24 hours a day. Call 1-800-716-7874. • Inspection Hotline — request a jurisdictional inspection for a boiler or pressure vessel or get an answer to a technical question. Call 1-800-333-4677, fax 1-800-298-4083, or e-mail NSCINSP_HOTLINE @hsb.com • Infrared Thermography — to help identify potential problems in your electrical system. 1 1866 THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE CO. One State Street, P.O. Box 5024 Hartford, CT 06102-5024 http://www.hsb.com 1-800-472-1866 COM-142(New 10/98) This summary gives general information.For all coverages,conditions and exclusions,refer to the policy. From:Kate Tipping At Landmark Insurance Services FaxID:651-464-7596 To:LMCIT-Berldey Risk Services,I Date:8/1912005 03:27 PM Page:2 of 2 Landmark Insurance Services MEMO Page1 232 South Lake Street i t , ark jJ : - Y? _,<. lw.;-13! t 7'74 7 (7 7t.W v'Tr,X Forest Lake,MN 55025 OAIN'PA-1 KT 08/I9/2005 Phone: 651-464-3333 Fay: 651-464-7596 ] ]17 '}r,,}}�� tt,� ��,��yy€ }� Yt�j r�tr ).. $3 1�l IInj`: 4�{y ,y. ,f ���,t �, l''ivvil,14,,w,,, { ': `i'�•fc 44 , It`'4,71(4) s#t'1.1.4.'A.,I'j; {.` l7s fi'",,v gfciYir{ CAMC2S101 yy/j��yy,yye }}�[:{5� � i u 7Lbl;;�F't7IdR_r'. .,. z,P.: -;,,',.... ...,P 4^..1t y.. CP 07/0712005 07/07/2006 LMCIT-Berkley Risk Services,I 145 University Avenue West . . St.Paul,MN 55103 CUSTOMER: City of Oak Park Heights Eric Johnson,City Admin. ; AUG 2 4 2005 s y i-.'e. c.,,h,:i it :k.fy l{it F{._ ;:'-Y V,'",{ }, &1.0,',,, {t''{ft 1' .,i'' 4, .1; { .Iaaj s :ill ,, „!, .), .. , „, .,,, r ,.. } ..;,„ ; ff� x,,vS 1 ,H,;:', {x .,;1. "x7 xa {.r rc ,:v {..1., .1 i A.,-!, C t , } .t ..,r ,, all: "'. el��z�>�ir�yfLif,1 {k{ti;, Ky' uk.{,Y Lx �}.y kkz {., ,� ,jr {�1 YF✓`' �..q:��7st�s, •+?` `��}+�li., r _�t� .t „!=Y It sr t�f,:,.s'",i-.1.,,, }� {tjrs.fF, � 'iY� i ',.. ''t%E x,i'''';''tr :k,''",�; 'z 4 +i '., f5':', t f �. rz�#4{, +#�tl :#�r0 t-ya4''r £' t'r c4 �� ,[4f� t _ <t t yt s ': '` 5_'- �'� .��. .a. � a3 , >d�J >n has# � �d, t > # f t 30✓�^ F..<>. ,,� rt �u3.s+ .�,d. ,s_,a��xi�� The insured advises that the 96 CHevy Caprice #--4521 has been sold and is not being replaced and is asking not to be charged for it on the 2005 _ / renewal . They also would like to know if the Systems Breakdown coverage would cover wells and lift station; and under what circumstances. They would also like an alternate quote for a $2, 000,000. limit on the Umbrella policy. 3 (... 7 ? 7( Thank you. . ,5-0 7. .a - r n',;(4-0,-- Kate Tippin: l( . 7-2-..16%$.‘(.4...s"......- t /1%.er.l."'.....-' 0 Return With File O Put tnFile I. get. #0 y,e--,,,,:,,, (From:,Brim Aim At:Landmark insurance Services FaxID:651-464-7596 To:Judy Hoist,Finance Director Date:7172005 01:15 PM Page:2 of 2 ACORD OP ID_ INSURANCE BINDER DATE 07/07/05 THIS BINDER IS A TEMPORARY INSURANCE CONTRACT,SUBJECT TO THE CONDITIONS SHOWN ON THE REVERSE SIDE OF THIS FORM. PRODUCER PHONE COMPANY BINDERt 1236 (AIC,No,Ext): 651-464-3333 651-464-7596 LMCIT-Berkley Risk Services, :BA07072005 EFFECTIVE EXPIRATION Landmark Insurance Services DATE TIME DATE TIME 232 South Lake Street X AM X 12.01 AM Forest Lake MN 55025 07/07/05 12:01 PM 07/07/06 NOON Brian Alm X THIS BINDER IS ISSUED TO EXTEND COVERAGE IN THE ABOVE NAMED COMPANY CODE: SUB CODE: PER EXPIRING POLICY#: SEE REMARKS AGENCY CU DESCRIPTION OF OPERATIONS/VEHICLES/PROPERTY(Including Location) STOMER ID: OAKPA-1 INSURED All city property, Autos and Equipment City of Oak Park Heights Hoist, Finance Director based on renewal application (2005) Judy r provided by the city. 14168 Oak Park Blvd PO Bx 2007 Oak Park Heights MN 55082-2007 COVERAGES LIMITS TYPE OF INSURANCE COVERAGE/FORMS DEDUCTIBLE COINS% AMOUNT PROPERTY CAUSES OF LOSS BLKT BG/PP 500 per schedl BASIC BROAD X SPEC X Replacement Cost GENERAL LIABILITY EACH OCCURRENCE $1,000,000 X COMMERCIAL GENERAL LIABILITY FIRE DAMAGE(My one fire) $50,000 X CLAIMS MADE OCCUR MED EXP IAnY one person) $1,000 PERSONAL&ADVINJURY $1,000,000. GENERAL AGGREGATE $1,000,000. RETRODATEFORCLAIMSMADE. 07/07/87 PRODUCTS-COMP/OP AGG $1,000,000. AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $1,000,000. X ANY AUTO BODILY INJURY(Per person) $ ALL OWNED AUTOS BODILY INJURY(Per accident) -$ SCHEDULED AUTOS PROPERTY DAMAGE $ HIRED AUTOS MEDICAL PAYMENTS $ NON-OWNED AUTOS PERSONAL INJURY PROT $ X $500 DEDUCTIBLE UNINSURED MOTORIST $1,000,000. $ AUTO PHYSICAL DAMAGE DEDUCTIBLE X ALL VEHICLES SCHEDULED VEHICLES X ACTUAL CASH VALUE X COLLISION 500 STATED AMOUNT $ X OTHER THAN COI: 500 OTHER GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $ ANY AUTO OTHER THAN AUTO ONLY EACH ACCIDENT $ AGGREGATE $ EXCESS LIABILITY EACH OCCURRENCE $1,000,000. X UMBRELLA FORM AGGREGATE $1,000,000. OTHER THAN UMBRELLA FORM RETRO DATE FOR CLAIMS MADE: 07/07/8 7 SELF-INSURED RETENTION $10,0 0 0. WC STATUTORY LIMITS WORKER'S COMPENSATION E.L.EACH ACCIDENT $ AND EMPLOYER'S LIABILITY El_DISEASE-EA EMPLOYEE $ E.L.DISEASE-POLICY LIMIT $ SPECIAL Extends renewal of the following policies: CMC25101, MEL4932 and 0140375. FEES $ CONDITIONS( Open Meeting Law Defense Cost Reimbursement - $50,000.; Crime - $100,000. T $ OTHER COVERAGES w/$500, ded ESTIMATED TOTAL PREMIUM $ NAME&ADDRESS . MORTGAGEE ADDITIONAL INSURED LOSS PAYEE LOAN* AUTHORIZED REPRESENTATIVE I )peju:izvts.og)62esnsmmsaw ACORD 75-S(1/98) NOTE:IMPORTANT STATE INFORMATION ON REVERSE SIDE ,, ACORD CORPORATION 1993 From:Brian Alm At:Landmark Insurance Services FaxiD:651-464-7596 To:Judy Hoist.Finance Director Date:7/712005 01:15 PM Pace: 1 of 2 � n �nar ',Mil Fax Insurance Services Phone: (651) 464-3333 ext. 203 Fax: (651)464-7596 From: Brian Alm To: Judy Hoist, Finance Director Pages: 2 Fax: (651) 439-0574 Date: 7/7/2005 01:15:37 PM Phone: (651) 439-4439 Subject: Binder Message: Judy, Kate is out of the office this week. I have sent the application and audit to the underwriter. The following is a binder, extending coverage on the package, umbrella and open meeting law policies. The workers comp policy shows as being renewed already. Please give me a call if you have any questions. Hope you had a nice Independence Day weekend. Sincerely, Brian Aim Agency Manager lL<al]rndhnniark Insurance Sery uce 232 South Lake Street • Forest Lake, MN 55025 • Phone: (651) 464-3333 FAX: (651) 464-7596 Since 1903 August 29,2005 SEP - 2 200 City of Oak Park Heights Eric Johnson, City Admin. • 14168 Oak Park Blvd PO Bx 2007 Oak Park Heights,MN 55082-6476 RE: CMC26394 Dear Judy&Eric; LMCIT has completed the renewal of Oak Park Heights Commercial Package, Excess and Open Meeting Law policies. This renewal extends coverage from 07/07/05 to 07/07/06. also enclosed is the auto change you requested. I would ask you to place this renewal with your other insurance documents. Please take a moment to review your policy. Should you have any questions or changes in coverage(s) please contact me at 464-3333, and I would be happy to review the information with you. My extension is shown below. 1 All claim information should be reported to Landmark Insurance Services. Your premium will be billed as follows: Direct billed by LMCIT- invoices enclosed. I would like to take this time to say thank you for continuing your business insurance with our agency. Landmark Insurance Services handles a full line of Property, Casualty,Life and Health Insurance for both individuals and businesses. Our agency would be happy to provide a no obligation quotation should you have any additional insurance needs. Sincerely, Kate Tipping Telephone Extension: 209 Landmark Insurance Services Enclosure: 7 INVOICE #: 20160 LEAGUE OF MN CITIES INSURANCE TRUS PREMIUM NOTICE C/O BERKLEY RISK SERVICES, LLC Invoice Date: 8/12/05 222 SOUTH NINTH STREET Due Date: 09/10/05 SUITE 1300 MINNEAPOLIS MN 55402-3332 612-766-3000 FAX: 612-766-3281 Bill To Agent 00874 AL's 1 2,„5 OAK PARK HEIGHTS, CITY OF FOREST LAKE INSURANCE AGENCY 14168 OAK PARK BLVD DBA LANDMARK INSURANCE SVCS P.O. BOX 2007 232 S LAKE ST STILLWATER MN 55082 FOREST LAKE - MN 55025-2505 Type of Coverage: MUNICIPALITY Convenant Number CMC 26394 Coverage Period: 7/07/05 To 7/07/06 Covered Party: OAK PARK HEIGHTS, CITY OF Payment Plan Selected: ANNUAL PAY PLAN DUE DATE AMOUNT DUE END.DATE DESCRIPTION 9/10/05 47,476.00 PREMIUM Total : $47,476.00 Payment/Adjustment Applied: $.00 Total : $47,476.00 PLEASE RETURN THIS PORTION WITH YOUR CHECK MADE PAYABLE TO: LEAGUE OF MN CITIES INSURANCE TRUST INVOICE #: 20160 C/0 BERKLEY RISK ADMINISTRATORS COMPANY, LLC P.O. BOX 581517 MINNEAPOLIS MN 55458-1517 612-766-3000 FAX: 612-766-3281 Type of Coverage: MUNICIPALITY Covenant Number: CMC 26394 DUE DATE: 09/10/05 Coverage Period: 7/07/05 To 7/07/06 UNPAID BALANCE: 47,476.00 Covered Party: OAK PARK HEIGHTS, CITY OF AMOUNT DUE: 47,476.00 INVOICE #: 20161 LEAGUE OF MN CITIES INSURANCE TRUS PREMIUM NOTICE C/O BERKLEY RISK SERVICES, LLC Invoice Date: 8/12/05 222 SOUTH NINTH STREET Due Date: 09/10/05 SUITE 1300 MINNEAPOLIS MN 55402-3332 612-766-3000 FAX: 612-766-3281 Bill To Agent 00874 OAK PARK HEIGHTS, CITY OF FOREST LAKE INSURANCE AGENCY 14168 OAK PARK BLVD DBA LANDMARK INSURANCE SVCS P.O. BOX 2007 232 S LAKE ST STILLWATER MN 55082 FOREST LAKE MN 55025-2605 Type of Coverage: MUNICIPALITY Convenant Number MEL 5291 Coverage Period: 7/07/05 To 7/07/06 Covered Party: OAK PARK HEIGHTS, CITY OF Payment Plan Selected: ANNUAL PAY PLAN DUE DATE AMOUNT DUE END.DATE DESCRIPTION 9/10/05 7,871.00 PREMIUM Total : $7,871.00 Payment/Adjustment Applied: $.00 Total : $7,871.00 PLEASE RETURN THIS PORTION WITH YOUR CHECK MADE PAYABLE TO: LEAGUE OF MN CITIES INSURANCE TRUST INVOICE #: 20161 C/O BERKLEY RISK ADMINISTRATORS COMPANY, LLC P.O. BOX 581517 MINNEAPOLIS MN 55458-1517 612-766-3000 FAX: 612-766-3281 Type of Coverage: MUNICIPALITY Covenant Number: MEL 5291 DUE DATE: 09/10/05 Coverage Period: 7/07/05 To 7/07/06 UNPAID BALANCE: 7,871.00 Covered Party: OAK PARK HEIGHTS, CITY OF AMOUNT DUE: 7,871.00 INVOICE #: 20162 LEAGUE OF MN CITIES INSURANCE TRUS PREMIUM NOTICE C/O BERKLEY RISK SERVICES, LLC Invoice Date: 8/12/05 222 SOUTH NINTH STREET Due Date: 09/10/05 SUITE 1300 MINNEAPOLIS MN 55402-3332 612-766-3000 FAX: 612-766-3281 Bill To Agent 00874 OAK PARK HEIGHTS, CITY OF FOREST LAKE INSURANCE AGENCY 14168 OAK PARK BLVD DBA LANDMARK INSURANCE SVCS P.O. BOX 2007 232 S LAKE ST STILLWATER MN 55082 FOREST LAKE MN 55025-2605 Type of Coverage: MUNICIPALITY Convenant Number OML 3726 Coverage Period: 7/07/05 To 7/07/06 Covered Party: OAK PARK HEIGHTS, CITY OF Payment Plan Selected: ANNUAL PAY PLAN DUE DATE AMOUNT DUE END.DATE DESCRIPTION 9/10/05 459.00 PREMIUM Total : $459.00 Payment/Adjustment Applied: $.00 Total : $459.00 PLEASE RETURN THIS PORTION WITH YOUR CHECK MADE PAYABLE TO: LEAGUE OF MN CITIES INSURANCE TRUST INVOICE #: 20162 C/O BERKLEY RISK ADMINISTRATORS COMPANY, LLC P.O. BOX 581517 MINNEAPOLIS MN 55458-1517 612-766-3000 FAX: 612-766-3281 Type of Coverage: MUNICIPALITY Covenant Number: OML 3726 DUE DATE: 09/10/05 Coverage Period: 7/07/05 To 7/07/06 UNPAID BALANCE: 459.00 Covered Party: OAK PARK HEIGHTS, CITY OF AMOUNT DUE: 459.00 ENDORSEMENT# 1 August 24,2005 JH COVERED PARTY COVENANT NUMBER EFFECTIVE DATE CITY OF OAK PARK HEIGHTS CMC 26394 07/07/05 It is hereby understood and agreed that the city's schedule of vehicles as of the renewal date (on file with the company) is amended as follows: DELETE: #003. 1995 CHEV CAPRICE#4521 —VALUE: $17,383. TOTAL ENDORSEMENT PREMIUM $ 516. ❑ ADDITIONAL PREMIUM RETURN PREMIUM (See Below for Billing Info.) (DO NOT PAY) ® PREMIUM ADJUSTMENT TO BE MADE NOW (See Invoice) OR ❑ PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATION All other terms and conditions remain unchanged. PP1* PR 1.0000 Executive Director, LMCIT Page 1 of I LMCIT ME044(1-95)(Rev.11-00) 8 - COMPREHENSIVE \ & iMjnnesciies MUNICIPAL PROPERTY AND . Cities promo J g excellence CASUALTY COVERAGE PREPARED ESPECIALLY FOR CITY OF OAK PARK HEIGHTS 14168 OAK PARK BOULEVARD P.O. BOX 2007 STILLWATER, MN 55082 07/07/05 - 07/07/06 Agent: FOREST LAKE INSURANCE AGENCY DBA LANDMARK INSURANCE SVCS 232 SOUTH LAKE STREET FOREST LAKE, MN 55025-2605 League of Minnesota Cities 145 University Avenue West St. Paul, MN 55103-2044 Phone: (651 281-1200 Fax: (651) 281-1298 Web Site: http://www.Imnc.org **IMPORTANT** PLEASE READ YOUR AGREEMENT Covenant Number: CMC 26394 COMMON COVERAGE DECLARATIONS Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES Previous Covenant Number: INSURANCE TRUST CMC 25101 (Herein called LMCIT) Item 1. CITY and MAILING ADDRESS: League ojNr;nne8ara cases Cities promot�g excel%nce OAK PARK HEIGHTS, CITY OF 14168 OAK PARK BLVD P.O. BOX 2007 STILLWATER MN 55082 Item 2. COVERAGE PERIOD: From: 07/07/05 To: 07/07/06 12:01 AM Standard Time at Mailing Address on Common Coverage Declarations Item 3. THE COVERED PARTY IS: CITY Item 4. COVERAGE PARTS: IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS COVENANT, LMCIT AGREES TO PROVIDE THE COVERED PARTY WITH COVERAGES SHOWN BELOW FOR WHICH A PREMIUM CHARGE IS STATED: PROPERTY, CRIME AND BOND Premium Property $ 17,326 Additional Covered Loss or Damages INCLUDED Water and Supplemental Flood Coverage INCLUDED Crime INCLUDED Bond-Employee Dishonesty NOT COVERED Bond- Faithful Performance NOT COVERED EQUIPMENT BREAKDOWN NOT COVERED MUNICIPAL LIABILITY $ 24,729 Medical and Related Expense INCLUDED AUTOMOBILE LIABILITY $ 3,467 AUTOMOBILE PHYSICAL DAMAGE $ 1 ,954 TOTAL $ 47,476 Item 5. GENERAL ANNUAL AGGREGATE DEDUCTIBLE: DOES NOT APPLY Item 6. PREMIUM IS DUE AND PAYABLE: ANNUAL - IN ADVANCE Item 7. FORMS APPLICABLE TO ALL COVERAGE PARTS: CCM(11-04) Item 8. DECLARATIONS APPLICABLE: DEC-011(11-03) DEC-012(11-04) DEC-013(11-03) DEC-016(11-03) 'ecuti e D'ector,LMC LMCIT DEC-01 1(11/86)(Rev.11/03) COMMON CONDITIONS ALL COVERAGE PARTS INCLUDED IN THIS COVENANT ARE SUBJECT TO THE FOLLOWING CONDITIONS: 1. CANCELLATION AND NON-RENEWAL made a part of this covenant or by acknowledgment by LMCIT that an endorsement will be issued at a later date. a. The city shown in the Declarations may cancel this covenant by mailing or delivering to LMCIT 3. RATING AUTHORITY AND advance written notice of cancellation. EXAMINATION OF THE CITY'S BOOKS AND RECORDS b. LMCIT may cancel this covenant by mailing or delivering to the city shown in the Declarations LMCIT shall have full discretionary authority to written notice of cancellation at least: promulgate rates and establish the premium to be charged for the coverage period under this covenant. (1) 10 days before the effective date of the cancellation if LMCIT cancels for nonpayment of LMCIT may, at its discretion or at the city's request, premium; or examine and audit the city's books as they relate to this covenant during the coverage period and up to one year (2) 30 days before the effective date of the thereafter and, accordingly, make any necessary cancellation if LMCIT cancels for any other reason. adjustments in premium. No premium adjustments will be made after one year following the expiration of the c. LMCIT will mail or deliver its notice to the city coverage period. shown in the Declarations last mailing address known to LMCIT. 4. INSPECTIONS AND SURVEYS d. Notice of cancellation will state the effective date of LMCIT has the right,but it is not obligated to: cancellation. The coverage period will end on that date. a. Make inspections and surveys at any time. e. If this covenant is canceled, LMCIT will send the b. Give the city reports on the conditions it finds; and city shown in the Declarations any premium refund due. If LMCIT cancels, the refund will be pro-rata. c. Recommend changes. If the city cancels, the refund may be less than the pro-rata. The cancellation will be effective even if Neither LMCIT's right to make inspections nor its LMCIT has not made or offered a refund. making any report thereon shall constitute any undertaking on behalf of or for the benefit of the city or f. If LMCIT decides not to renew this covenant, others to determine or warrant that such property or LMCIT will mail or deliver to the city shown in the operations are safe or healthful or free from hazard or Declaration written notice of the non-renewal not are in compliance with any law,rule or regulation. less than 30 days before the expiration date. These conditions apply not only to LMCIT, but also to g. If notice is mailed, proof of mailing will be any rating advisory, rate service, or similar organization sufficient proof of notice. which makes inspections, surveys, reports, or recommendations. 2. CHANGES 5. PREMIUMS This covenant contains all the agreements between LMCIT and the city concerning the coverage afforded. The city shown in the Declarations: The city shown in the Declarations is authorized to make a. Is responsible for the payment of all premiums; and changes in the terms of this coverage agreement with the consent of LMCIT. The coverage terms can be amended b. Will be the payee for any return premiums. or waived only by endorsement issued by LMCIT and LMCIT CCM(11-89)(Rev.11-04) Page 1 of 3 6. TRANSFER OF THE CITY'S RIGHTS AND coverage is primary, excess, contingent, or any other DUTIES UNDER THIS COVENANT basis, unless that policy or coverage is specifically written to be excess over this covenant. The city's rights and duties under this covenant may not be transferred without the written consent of LMCIT. b. This coverage is primary for any of the following losses: 7. OVERLAP OF COVERAGE (1) A covered loss of business personal effects,with In the event of a dispute between LMCIT and one or respect to any coverage provided under the more insurers as to which policy or coverage agreement employee's homeowners' insurance or similar applies to a covered loss,LMCIT shall indemnify the city coverage. for any legal or other expenses which are necessarily incurred by the city in determining whether LMCIT or (2) A covered loss of contents or mobile property in the insurer(s) shall bear the loss. Such indemnification the city's care, custody and control that is used to shall be made only if it is determined that payment of the maintain the operations of the city, with respect to loss shall be made under this covenant. If the loss is coverage provided under an insurance policy of the shared by LMCIT and one or more insurers, owner covering that property. indemnification shall be made in the same proportion as the loss payment. The city and LMCIT shall cooperate (3) A covered loss resulting from the city's in the development and execution of reasonable maintenance or use, including loading or unloading, procedures to resolve the dispute. of any owned automobile that is not a trailer. 8. ASSESSIBILITY (4) A covered loss resulting from the city's maintenance or use, including loading or unloading, All cities in the joint coverage pool are jointly and of any trailer the city does not own but which is severally liable for all claims and expenses of the pool. connected to an owned automobile. The amount of any liabilities in excess of assets may be assessed to the members of the pool when a deficiency is (5) Any covered liability claim against a party who identified. has been added by endorsement as an additional covered party under this covenant, unless that 9. NUCLEAR HAZARD endorsement specifically provides that this covenant is excess. LMCIT, under this covenant, does not cover any loss or claim for damage that is caused in part or in total by (6) A covered loss to a covered automobile as nuclear reaction or radiation, or radioactive provided by the Municipal Automobile Physical contamination,however caused. Damage Coverage. 10. CONCEALMENT OR FRAUD (7) A covered loss to a builders risk property as provided by Buildings in the Course of This covenant is void if the city has intentionally Construction,Alteration or Repair Coverage. concealed or misrepresented any material fact or circumstance relating to this covenant. 12. RECOVERIES 11. OTHER COVERAGE Except as otherwise required by statute, any "net recovery" from a third party on a covered loss will be allocated between the city and LMCIT in proportion to a. Except as provided in paragraph b., this coverage is their respective shares of the total covered loss. "Net excess over the following: recovery"means the total amount recovered from a third (1) Any liability insurance policy of another party party; minus the cost of obtaining that recovery;but"net on which the covered party is an additional insured recovery" does not include amounts LMCIT recovers or additional named insured. from a reinsurer, The city's share of the covered loss includes any applicable deductible; any amounts for (2) Any other valid and collectible insurance policy which the city is responsible under any co-pay or other coverage, whether such other policy or provisions; and any amounts which exceed the applicable coverage limit. LMCIT CCM(11-89)(Rev.11-04) Page 2 of 3 13. TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO LMCIT Except as provided below, if any person or organization to or for whom LMCIT makes payment under this covenant has rights to recover damages from another, those rights are transferred to LMCIT to the extent of LMCIT's payment. That person or organization must do everything necessary to secure our rights and must do nothing before or after a loss to impair them. a. The City may waive the City's rights against another party in writing prior to a covered loss or damage but this does not apply to a covered loss or damage as provided by the Municipal Bond Coverage or Municipal Crime Coverage. The City does not need to notify LMCIT in writing. b. The City may waive the City's rights against another party in writing after a covered loss or damage as provided by the Municipal Property Coverage, only if at the time of loss that party is one of the following: (1) Another covered party covered by this covenant (2) Another entity (a) Owned or controlled by the City; or (b) That owns or controls the City. LMCIT CCM(11-89)(Rev.11-04) Page 3 of 3 MUNICIPAL PROPERTY, CRIME, BOND and EQUIPMENT BREAKDOWN DECLARATIONS Covenant Number: Coverage is Provided by: LMC CMC 26394 THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST League of Minnesota Cities (Herein called LMCIT) Cities promoting excellence Item 1. CITY: OAK PARK HEIGHTSC CITY OF Item 2. COVERAGE PERIOD: From: 07/07/05 To: 07/07/06 12:01 AM Standard Time at Mailing Address on Common Coverage Declarations Item 3. THE COVERED PARTY IS: CITY Item 4. COVERAGE: IN RETURN FOR THE PAYMENT OF THE PREMIUM,AND SUBJECT TO ALL THE TERMS OF THIS COVENANT, LMCIT AGREES TO PROVIDE THE COVERED PARTY WITH COVERAGES SHOWN BELOW FOR WHICH A LIMIT IS STATED: Item 5. COVERAGE PART ONE—PROPERTY Section I—Property General Limit of Coverage Per Occurrence $ 6,244,072 This general limit is subject to the sublimits as described in Section VI, Limits of Coverage and Valuation, and the specific property limit. Terrorism Activity Annual Aggregate Limit $ 1,000,000. Section II—Additional Covered Loss or Damages 1. Asbestos Clean up,Abatement and Removal $ 250,000. Per Location 2. Loss of Revenue, Extra Expense and Expediting Expense $ 5,000,000. Per Occurrence 3. Demolition and Debris Removal (Direct Physical Damage to Covered Property) 25%of the Estimated Replacement Cost of the Covered Property (No Direct Physical Damage to Covered Property) $ 50,000. Per Occurrence ( Y 9 p rtY) 4. Leasehold Interest $ 500,000. Per Location 5. Pollutant Cleanup and Removal $ 100,000. Per Location 6. Errors $ 500,000. Per Occurrence 7. Rental Reimbursement $ 25,000. Annual Aggregate 8. Arson Reward $ 5,000. Per Fire Loss 9. Accounts Receivable $ 500,000. Per Location 10. Valuable Papers and Records $ 500,000. Per Location 11. Extraordinary Expense $ 100,000. Annual Aggregate 12. Utility Services $ 100,000. Per Occurrence Section IV-Water and Supplemental Flood Coverage $ 500,000. Per Occurrence $ 500,000. Annual Aggregate LMCIT DEC-012(11-86)(Rev.11/04) Page 1 of 3 LMC League of Minnesota Cities Cities promoting excellence Item 6. REFER TO SCHEDULE OF COVERED PROPERTY FOR THOSE LOCATIONS INCLUDED IN THE SECTION I COVERAGE; THE SCHEDULE OF COVERED MOBILE PROPERTY FOR THE MOBILE PROPERTY INCLUDED IN THE SECTION I COVERAGE AND THE SCHEDULE OF OF COVERED PROPERTY FOR THOSE LOCATIONS INCLUDED IN SECTION IV COVERAGE. Item 7. DEDUCTIBLE(Deductible applies per occurrence subject to General Annual Aggregate Deductible, if any, shown on Common Coverage Declarations): COVERAGE PART ONE - PROPERTY $ 500 Per Occurrence Item 8. COVERAGE PARTS, FORMS, SCHEDULES AND ENDORSEMENTS APPLICABLE TO THIS COVERAGE. ME063(11-01) ME079(11-03) MPCB(11-04) MPCB-110(11-02) PM-100(11-03) PM-109(11-02) Item 9. MORTGAGE HOLDER (if applicable) Item 10. COVERAGE PART TWO - CRIME LIMIT OF COVERAGE PER OCCURRENCE $ 100,000 Item 11. DEDUCTIBLE(Deductible applies per occurrence subject to General Annual Aggregate Deductible, if any, shown on Common Coverage Declarations): COVERAGE PART TWO - CRIME $ 500 Per Occurrence Item 12. COVERAGE PARTS, FORMS, SCHEDULES AND ENDORSEMENTS APLICABLE TO THIS COVERAGE. ME063(11-01) MPCB(11-04) LMCIT DEC-012(11-86)(Rev.11/04) Page 2 of 3 \ ic League of Minnesota Cities Cities promoting excellence J Item 13. COVERAGE PART THREE - BOND Item 13A. BOND - EMPLOYEE DISHONESTY COVERAGE LIMIT OF COVERAGE PER OCCURRENCE $ DEDUCTIBLE(Deductible applies per occurrence subject to General Annual Aggregate Deductible, if any, shown on Common Coverage Declarations): DEDUCTIBLE- EMPLOYEE DISHONESTY COVERAGE $ Per Occurrence Item 13B. BOND - FAITHFUL PERFORMANCE COVERAGE LIMIT OF COVERAGE PER OCCURRENCE $ DEDUCTIBLE(Deductible applies per occurrence subject to General Annual Aggregate Deductible, if any, shown on Common Coverage Declarations): DEDUCTIBLE- FAITHFUL PERFORMANCE COVERAGE $ Per Occurrence Item 14. COVERAGE PARTS,FORMS, SCHEDULES AND ENDORSEMENTS APPLICABLE TO THIS COVERAGE. Item 15. EQUIPMENT BREAKDOWN COVERAGE EQUIPMENT BREAKDOWN LIMIT: $ DEDUCTIBLE: $ ANY ONE ACCIDENT Item 16. COVERAGE PARTS,FORMS, SCHEDULES AND ENDORSEMENTS APPLICABLE TO THIS COVERAGE. I LMCIT DEC-012(11-86)(Rev.11/04) Page 3 of 3 LEAGUE OF MINNESOTA CITIES INSURANCE TRUST SCHEDULE OF COVERED PROPERTY Covenant Number: � CMC 26394 CITY OAK PARK HEIGHTS, CITY OF League of Minnesota Cities Cities promoting excellence COVERAGE AT EACH OF THE LOCATIONS BELOW APPLIES ONLY FOR BUILDING/CS ' ' . PROPERTY IN THE OPEN OR BUILDERS RISK PROPERTY DESCRIBED AND FOR THE *SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGES INDICATED. THE ESTIMATED REPLACEMENT COST STATED BELOW IS SUBJECT TO THE SPECIFIC PROPERTY LIMIT. **Type of ***Section IV Watei Estimated Covered and Supplemental Replacement Loc# Location Occupancy Property Flood Coverage Cost 1 14168 OAK PARK BLVD N CITY HALL/GARAGE B CODE C $2,224,780 2 58TH&NORELL WATER TOWER B CODE C $1,156,813 3 14168 OAK PARK BLVD N WATER TOWER B CODE C $735,438 4 BREKKE PARK SHELTER B CODE C $216,252 5 13425 60TH STREET LIFT STATION B CODE C $131,108 6 14168 OAK PARK BLVD N PUMP HOUSE#1 B CODE C $124,847 7 SWAGER PARK SHELTER B CODE C $8,694 8 COVER PARK RECREATION BUILDING B CODE C $48,983 9 VALLEY VIEW PARK SHELTER B CODE C $85,243 10 BEADETTE ON LOOKOUT TRAIL LIFT STATION B CODE C $94,750 11 SUNYSIDE MARINA LIFT STATION B CODE C $94,750 12 14200 53RD STREET LIFT STATION B CODE C $94,750 13 14168 OAK PARK BLVD N CITY HALL PIO CODE C $3,533 14 SWAGER PARK PARK PIO CODE C $69,425 *The limit of coverage for Section IV-Water and Supplemental Coverage is$500,000 per occurrence /500,000 Annual Aggregate **Type of Covered Property B = Building/Contents PIO = Property in the Open BR = Builders Risk Property ***Section IV-Water and Supplemental Flood Coverage CODE A: LMCIT Water and Supplemental Flood Coverage applies with no additional exclusions. CODE B: LMCIT Water and Supplemental Flood Coverage applies in addition to and in excess of the applicable National Flood Insurance Program Coverage. CODE C: LMCIT Water and Supplemental Flood Coverage excludes damages from any occurrence for which any loss or any damage would be payable under a National Flood Insurance Program Coverage. PM-100(1 1/9 5)(Rev.11/03) LEAGUE OF MINNESOTA CITIES INSURANCE TRUST SCHEDULE OF COVERED PROPERTY Covenant Number: MC CMC 26394 CITY OAK PARK HEIGHTS, CITY OF dies pro promoting excellence n es of COVERAGE AT EACH OF THE LOCATIONS BELOW APPLIES ONLY FOR BUILDING/CO TENTS/ PROPERTY IN THE OPEN OR BUILDERS RISK PROPERTY DESCRIBED AND FOR THE *SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGES INDICATED. THE ESTIMATED REPLACEMENT COST STATED BELOW IS SUBJECT TO THE SPECIFIC PROPERTY LIMIT. **Type of ***Section IV Watei Estimated Covered and Supplemental Replacement Loc# Location Occupancy Property Flood Coverage Cost 15 COVER PARK PARK PIO CODE C $78,728 16 VALLEY VIEW PARK PARK PIO CODE C $42,236 17 BREKKE PARK PARK PIO CODE C $151,993 18 CITY WIDE VARIOUS PIO CODE C $68,889 19 14290 58TH ST N PUMPHOUSE#2 B CODE C $118,258 20 KERN CENTER,5500 STILLWATER BLVD LIFT STATION&FORCE MAIN B CODE C $224,645 21 5701 NORWICH PARKWAY AUTUMN HILLS PARK PIO CODE C $218,956 *The limit of coverage for Section IV-Water and Supplemental Coverage is$500,000 per occurrence /500,000 Annual Aggregate **Type of Covered Property B = Building/Contents PIO = Property in the Open BR = Builders Risk Property ***Section IV-Water and Supplemental Flood Coverage CODE A: LMCIT Water and Supplemental Flood Coverage applies with no additional exclusions. CODE B: LMCIT Water and Supplemental Flood Coverage applies in addition to and in excess of the applicable National Flood Insurance Program Coverage. CODE C: LMCIT Water and Supplemental Flood Coverage excludes damages from any occurrence for which any loss or any damage would be payable under a National Flood Insurance Program Coverage. PM-100(11/95)(Rev.11/03) Definition of City Endorsement It is understood and agreed that city is amended to include: ECONOMIC DEVELOPMENT AUTHORITY All other terms and conditions remain unchanged. LMCIT Page 1 of 1 ME063(11/95)(Rev. 11/01) Terrorism Losses Annual Aggregate Limit Endorsement This Endorsement modifies coverage provided under the Municipal Property Coverage and the Municipal Automobile Physical Damage Coverage. LMCIT will not pay more than $1,000,000 for losses, costs or expenses arising out of or related to, either directly or indirectly, any terrorist activity during the annual coverage period, regardless of the number of occurrences. This limit is part of and not in addition to the general limit per occurrence. Terrorist activity means any of the following, regardless of any other cause or event that in any way contributes concurrently or in any sequence to the loss, cost or expense: 1. Any deliberate, unlawful act that: a. Is declared by any authorized governmental official to be or to involve terrorism, terrorist activity or acts of terrorism; or b. Includes, involves, or is associated with the use or threatened use of force, violence or harm against any person, tangible or intangible property, the environment, or any natural resources, where the act or threatened act is intended, in whole or in part, to: (1) Promote or further any political, ideological, philosophical, racial, ethnic, social or religious cause or objective of the perpetrator or any organization, association or group affiliated with the perpetrator; or (2) Influence, disrupt or interfere with any government related operations, activities or policies; or (3) Intimidate, coerce or frighten the general public or any segment of the general public; or (4) Disrupt or interfere with a national economy or any segment of a national economy; or c. Includes, involves, or is associated with, in whole or in part, any of the following activities, or the threat thereof: (1) Hijacking or sabotage of any form of transportation or conveyance, including but not limited to spacecraft, satellite, aircraft, train, vessel, or motor vehicle; or (2) Hostage taking or kidnapping; or LMCIT ME079(11/01)(Rev.11/03) Page 1 of 2 (3) The use of any biological, chemical, radioactive, or nuclear agent, material, device or weapon; or (4) The use of any bomb, incendiary device, explosive or firearm; or (5) The interference with or disruption of basic public or commercial services and systems, including but not limited to the following services or systems: electricity, natural gas, power, postal, communications, telecommunications, information, public transportation, water, fuel, sewer or waste disposal; or (6) The injuring or assassination of any elected or appointed government official or any government employee; or (7) The seizure, blockage, interference with, disruption of, or damage to any government buildings, institutions, functions, events, tangible or intangible property or other assets; or (8) The seizure, blockage, interference with, disruption of, or damage to tunnels, roads, streets, highways, or other places of public transportation or conveyance. 2. Any of the activities listed in section 1, c. above shall be considered terrorist activity except where you can conclusively demonstrate to us that the foregoing activities or threats thereof were motivated solely by personal objectives of the perpetrator that are unrelated, in whole or in part, to any intention to: a. Promote or further any political, ideological, philosophical, racial, ethnic, social or religious cause or objective of the perpetrator or any organization, association or group affiliated with the perpetrator; or b. Influence, disrupt or interfere with any government related operations, activities or policies; or c. Intimidate, coerce or frighten the general public or any segment of the general public; or d. Disrupt or interfere with a national economy or any segment of a national economy. LMCIT ME079(11/01)(Rev.11/03) Page 2 of 2 League c Minnesota Cities Cities promoting l MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE LMCIT MPCB(11-99)(Rev. 11-04) MC League of Minnesota Cities Cities promoting excellence MUNICIPAL PROPERTY COVERAGE PART ONE LMCIT MPCB(11-99)(Rev. 11-04) MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE WHAT IT IS AND WHERE YOU CAN FIND IT INDEX PROPERTY COVERAGE PART ON E L A.; Leag of Minnesota Citi Cities ue promoting excellence J PAGE SECTION I-PROPERTY COVERAGE 1-2 1. COVERAGE AGREEMENT 1 a. COVERED PROPERTY 1 b. PROPERTY NOT COVERED 1-2 SECTION II -ADDITIONAL COVERED LOSS OR DAMAGE 2-4 1. COVERAGE AGREEMENT 2 a. LOSS OF REVENUE,EXTRA EXPENSE AND EXPEDITING EXPENSE 2 b. DEMOLITION AND DEBRIS REMOVAL 2 c. LEASEHOLD INTEREST 2-3 d. ACCOUNTS RECEIVABLE 3 e. VALUABLE PAPERS AND RECORDS 3 f. UTILITY SERVICES 3 2. COVERAGE AGREEMENT 3 a. ASBESTOS CLEANUP,ABATEMENT AND REMOVAL 3 b. POLLUTANT CLEANUP AND REMOVAL 3 c. ERRORS 3 d. RENTAL REIMBURSEMENT 3 e. ARSON REWARD 4 f. EXTRAORDINARY EXPENSE 4 SECTION III- CAUSES OF LOSS AND DAMAGES NOT COVERED 4-6 SECTION IV-WATER AND SUPPLEMENTAL FLOOD COVERAGE 6-7 SECTION V-BUILDINGS IN THE COURSE OF CONSTRUCTION, ALTERATION OR REPAIR COVERAGE 7 SECTION VI - LIMITS OF COVERAGE AND VALUATION 8-12 SECTION VII-DEFINITIONS 12-17 SECTION VIII- CONDITIONS 17-20 LMCIT MPCB(11-99)(Rev. 11-04) MUNICIPAL PROPERTY COVERAGE PART ONE Various provisions in this covenant restrict coverage. Words and phrases that appear in italics have special Read the entire covenant carefully to determine rights, meaning, as given in SECTION VII-DEFINITIONS. duties and what is or is not covered. SECTION I - PROPERTY COVERAGE 1. COVERAGE AGREEMENT (5) We will pay for loss to covered property that is temporarily at an unscheduled location that you We will pay for direct physical loss of or damage to do not own, lease or operate, as described in your covered property unless the cause of loss or SECTION VI -LIMITS OF COVERAGE AND damage is not covered, as described under SECTION VALUATION. III - CAUSES OF LOSS AND DAMAGES NOT COVERED. The amount we will pay for loss or b. PROPERTY NOT COVERED damage is limited as described in SECTION VI - LIMITS OF COVERAGE AND VALUATION. We will not cover the following types of property: a. COVERED PROPERTY (1) Aircraft; (1) We will cover the following types of property: (2) Animals(except for police dogs); (a) Building/contents described in the Schedule (3) Automobiles, vehicles, or self-propelled of Covered Property. machines that are licensed for use on public roads; (b) Property in the open described in the Schedule of Covered Property. (4) Bills,currency,deeds, evidences of debt,money, notes or securities; (c) Mobile property valued at $25,000 replacement cost or less if identified as covered (5) Builders risk property; on the Schedule of Covered Mobile Property; and mobile property valued at greater than (6) Bridges, roadways, walks, patios or other paved $25,000 replacement cost and is listed on the surfaces, except golf course property; Schedule of Covered Mobile Property. (7) Contraband or property in the course of illegal (2) We will pay for loss to newly acquired or transportation or trade; constructed building/contents or property in the open at any one location as described in (8) Cost of excavations, grading, backfilling or SECTION VI - LIMITS OF COVERAGE AND filling; VALUATION. (9) Land, subsoil, crops or lawns, except golf course (3) We will pay for loss to newly acquired or property; constructed mobile property as described in SECTION VI - LIMITS OF COVERAGE AND (10) Pilings,piers,wharves or docks; VALUATION. (11) Underground and buried pipes, flues or drains; (4) We will pay for loss to covered property in transit as described in SECTION VI - LIMITS (12) Foundations of buildings, structures, machinery OF COVERAGE AND VALUATION. or boilers if their foundations are below: LMCIT MPCB(11-99)(Rev. 11-04) Page 1 of 20 (a) The lowest basement floor; or (14) Transmission and distribution lines and poles and equipment that are usual to the transmission (b) The surface of the ground, if there is no of electricity. This does not include substations basement; and transformers. (13) Retaining walls that are not part of the covered (15) Trees and shrubs that are not within 100 feet of a property; building. SECTION II - ADDITIONAL COVERED LOSS OR DAMAGE 1. COVERAGE AGREEMENT (a) The excess of the fair rental value of similar premises over the actual rent payable by you as We will provide coverage for the following loss or lessee (including any maintenance or operating damage unless the cause of loss or damage is not charges paid by the lessee) during the unexpired covered, as described under SECTION III - CAUSES term of the lease; and OF LOSS AND DAMAGES NOT COVERED. The amount we will pay for loss or damage is limited as (b) The rental income that would have been described in SECTION VI-LIMITS OF COVERAGE earned by you from sublease agreements, over AND VALUATION. and above the rental expense specified in the lease between you and the lessor. a. LOSS OF REVENUE,EXTRA EXPENSE AND EXPEDITING EXPENSE (3) When covered property is rendered wholly or partially untenantable by a direct physical loss or We will pay for the actual loss of revenue, extra damage and the lease is canceled by the lessor in expense or expediting expense sustained by you due to accordance with the conditions of the lease or by the necessary suspension of your operations during the statutory requirements of the state in which the period of recovery caused by direct physical loss or damaged or destroyed covered property is damage to any covered property. located, we will cover the pro rata proportion from the date of loss to expiration date of the b. DEMOLITION AND DEBRIS REMOVAL lease (to be paid without discount) on your interest in: We will cover the following expenses: (a) Improvements and betterments to covered (1) The cost of necessary demolition and removal of property during the unexpired term of the lease debris of covered property and non-covered that is not covered under any other section of property from a covered location resulting from Part One of the covenant; or direct physical loss or damage to covered property; or (b) The amount of advance rental paid by you and not recoverable under the terms of the lease (2) The cost of removal of debris of non-covered for the unexpired term of the lease. property from your covered location which results from a specified cause of loss. (4) We will cover your leasehold interest when your covered property is rendered wholly or partially c. LEASEHOLD INTEREST untenantable and the lease is canceled by the lease or by statutory requirements of the state in (1) We will provide coverage for leasehold interest which the damaged or destroyed covered resulting from direct physical loss or damage to property is located. covered property. (5) We will cover your leasehold interest for the first (2) Leasehold interest means: three months succeeding the date of the loss and the net lease interest for the remaining months of LMCIT MPCB(I 1-99)(Rev. 11-04) Page 2 of 20 the unexpired lease. We will not be liable for b. POLLUTANT CLEANUP AND REMOVAL any increase of loss that may be occasioned by the suspension, lapse, or cancellation of any (1) We will provide coverage for pollutant cleanup license, or by the exercising of any option to and removal resulting from direct physical loss cancel the lease. or damage to covered property. d. ACCOUNTS RECEIVABLE (2) We will cover the costs of testing that are incurred in the course of extracting pollutants We will pay for loss or damage to your accounts from land or water and any expense incurred to receivable caused by direct physical loss or damage to test for, monitor, or assess the existence, your accounts receivable. concentration, or effects of pollutants. e. VALUABLE PAPERS AND RECORDS c. ERRORS We will pay for loss or damage to valuable papers and We will pay for loss to any covered property if the loss records caused by direct physical loss or damage to is not covered solely because of: your valuable papers and records. (1) Any inadvertent error in the description or f. UTILITY SERVICES location of the building/contents,property in the open, mobile property, or builders risk property (1) We will pay for pollutant cleanup and removal covered by the covenant,which inadvertent error. from covered property. existed at the inception date of the covenant; or (2) We will pay for the actual loss of revenue, extra (2) Any inadvertent error in the description or expense or expediting expense sustained by you location of the building/contents,property in the due to the necessary suspension of your open, mobile property, or builders risk property operations during the period of recovery caused in endorsements to the covenant; or by an interruption of a utility service to your covered property. (3) Failing through an inadvertent error to schedule (a) any building/contents, property in the open, This interruption must be caused by direct physical mobile property, or builders risk property owned loss or damage to utility service property. by the city at the inception of the covenant, or (b) any newly acquired or constructed building/ 2. COVERAGE AGREEMENT contents, property in the open, mobile property or builders risk property during the term of the We will provide coverage for the following loss or coverage document. damage. The amount we will pay for loss or damage is limited as described in SECTION VI - LIMITS OF (4) It is a condition of this coverage that such COVERAGE AND VALUATION. inadvertent error shall be reported and corrected when discovered. a. ASBESTOS CLEANUP,ABATEMENT AND REMOVAL d. RENTAL REIMBURSEMENT (1) We will pay for your expense to clean up, abate We will pay for rental reimbursement expenses or remove from covered property asbestos incurred by you for the rental of mobile property that particles that are discharged, dispersed, or was a result of a covered loss to your mobile property. released. (1) No deductibles apply to this coverage. (2) The expenses to clean up, abate or remove asbestos particles will be paid only if such (2) This coverage does not apply while there is expenses are incurred within 90 days of the date spare or reserve equipment available to you for of direct physical loss or damage. your operations. LMCIT MPCB(11-99)(Rev.I 1-04) Page 3 of 20 e. ARSON REWARD For any claims for extraordinary expense which are paid under this section,the city must reimburse In the event that a covered fire loss was the result of an LMCIT as provided in this paragraph. The amount act of arson, we will reimburse you for rewards you to be paid to LMCIT will equal the amount needed pay for information leading to convictions for that act to reimburse LMCIT for the full amount of any of arson. claims that LMCIT pays under this section. The city may, at its discretion, reimburse LMCIT f. EXTRAORDINARY EXPENSE through payment of equal annual installments over a period of up to five years from the date the claim (1) Extraordinary expense payment: is paid. Each installment will be billed and payable at the same time as the city's annual As a benefit associated with being a member of renewal premium for LMCIT property/casualty LMCIT's property/casualty program, upon coverage. If the city ceases to be a member of the submission of a claim LMCIT will pay for any LMCIT property/casualty program, the full extraordinary and unanticipated cost or expense amount, together with any accrued interest, will be the city incurs which: immediately due and payable on the date that the city ceases to be a member. (a) Is necessary for the purpose of protecting the public health and safety, protecting city property, No interest will apply if reimbursement is made or meeting the city's legal obligations; and within one year of the date the cost or expense was incurred. If the city elects to pay the (b) Is not covered by any other provision of this reimbursement in more than one annual covenant, any other LMCIT coverage covenant, or installment, interest at the rate of 3% annually any insurance policy. shall be included in the amount owed beginning one year from the date the cost or expense was The city must provide to LMCIT any information incurred. or documentation needed or requested in order to determine if these conditions are met. The (4) Termination of benefits: determination of whether these conditions are met will be at LMCIT's sole discretion. The LMCIT Board of Trustees may terminate the benefit provided under this section at any time (2) Limit: upon 10 days written notice to the city, if the Board determines that it is necessary to protect the LMCIT will not pay more than $100,000 for interests of LMCIT or its member cities. claims under this section during the coverage year, regardless of the number of claims, occurrences or Termination of this coverage shall not affect any incidents. claims that the city has submitted to LMCIT before the effective date of termination of coverage. (3) Reimbursement of extraordinary expense payment: SECTION III - CAUSES OF LOSS AND DAMAGES NOT COVERED 1. CAUSES OF LOSS NOT COVERED a. WATER We will not pay for loss or damage caused directly or (1) Flood, surface water, waves, tides, tidal waves, indirectly by any of the following. Such loss or overflow of any body of water, or their spray, all damage is excluded regardless of any other cause or whether driven by wind or not; event that contributes concurrently or in any sequence to the loss. (2) Mudslide or mudflow; LMCIT MPCB(11-99)(Rev. 11-04) Page 4 of 20 (3) Water that backs up or overflows from a sewer, This exclusion does not apply to computer drain or sump; or equipment data and media. (4) Water under the ground surface pressing on, or b. Damage from the discharge, dispersal, seepage, flowing or seeping through: migration,release or escape of pollutants. (a) Foundations,walls, floors or paved surfaces; This exclusion does not apply if the discharge, dispersal, seepage, migration, release or escape of (b) Basements,whether paved or not; or pollutants is itself caused by a specified cause of loss. (c) Door,windows or other openings; This exclusion does not apply to pollutant cleanup except for coverage that is provided by water and and removal as provided in SECTION II,2.b. supplemental flood coverage as described in SECTION IV -WATER AND SUPPLEMENTAL c. Damages caused by dishonest or criminal acts by FLOOD COVERAGE. you, or your employees: But if loss or damage by fire, explosion or (1) Acting alone or in collusion with others; or sprinkler leakage results, we will pay for that resulting loss or damage. (2) Whether or not occurring during the hours of employment. This exclusion does not apply to mobile property. This exclusion does not apply to acts of b. NUCLEAR HAZARD destruction by your employees; but theft by employees is not covered. Nuclear reaction or radiation, or radioactive contamination,however caused. d. Damages caused by explosion of steam boilers, steam pipes, steam engines or steam turbines But if loss or damage by fire results, we will pay for owned or leased by you, or operated under your that resulting loss or damage. control. c. WAR But loss or damage by fire or combustion if y g explosion results, we will pay for that resulting (1) War, including undeclared or civil war; loss or damage. (2) Warlike action by a military force, including We will also pay for loss or damage caused by or action in hindering or defending against an actual resulting from the explosion of gases or fuel or expected attack, by any government, sovereign within the flues or passages through which the or other authority using military personnel or other gases of combustion pass. agents; or e. The cost to repair or replace faulty workmanship, (3) Insurrection, rebellion, revolution, usurped power, materials, construction or design. or action taken by governmental authority in hindering or defending against any of these. This exclusion does not apply to computer equipment data and media. 2. DAMAGES NOT COVERED f. The cost to repair or replace mechanical We will not pay for the following damages: breakdown, including rupture or bursting caused by centrifugal force. a. Damage to your electrical devices, appliances or wires caused by artificially generated electric This exclusion does not apply to computer current including electric arcing. equipment data and media. LMCIT MPCB(11-99)(Rev. 11-04) Page 5 of 20 g. Damages caused by: The exclusion for damages caused by disease does not apply to police dogs. (1) Rust, corrosion, decay, deterioration, disease, hidden or latent defect, or any quality in property h. Unexplained loss, mysterious disappearance, or that causes it to damage or destroy itself; shortage disclosed upon taking inventory. (2) Mold or other fungus or fungi, fungal spores, i. Seizure or destruction of property by order of or fungal fragments or metabolites, such as governmental authority. mycotoxins or volatile organic components; But we also will pay for acts of destruction (3) Settling, shrinking or expanding; or ordered by governmental authority and taken at the time of a fire to prevent its spread, if the fire (4) Wear and tear. would be covered under this coverage part. This exclusion does not apply if the above damage j. The cost of fire department service charges that results from a specified cause of loss. the city is legally obligated to pay. SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGE 1. COVERAGE AGREEMENT i) Foundations, walls, floors or paved surfaces; a. For your building/contents, property in the open, or builders risk property subject to the exclusions ii) Basements,whether paved or not; or and limitations in paragraph b. below, we will pay for: iii) Doors,windows or other openings. (1) Direct physical loss of or damage to your But if loss or damage by fire, explosion or building/contents,property in the open, or builders sprinkler leakage results, we will not pay for that risk property described in the Schedule of Covered resulting loss or damage under this SECTION IV. Property; and b. (1) For any building/contents, property in the (2) Any additional covered losses or damages as open, or builders risk property for which Code A described in SECTION II - ADDITIONAL is shown on the Schedule of Covered Property, no COVERED LOSS OR DAMAGE as a result of additional exclusions apply to the coverage direct physical loss of or damage to your building/ provided under this section. contents, property in the open, or builders risk property which are caused by: (2) For any building/contents, property in the open, or builders risk property for which Code B (a) Flood, surface water, waves, tides, tidal is shown on the Schedule of Covered Property, the waves, overflow of any body of water, or their coverage provided by this section is specifically in spray,all weather driven by wind or not; addition to and in excess of the applicable National Flood Insurance Program coverage. (b) Mudslide or mudflow; (3) For any building/contents, property in the (c) Water that backs up or overflows from a open, or builders risk property for which Code C sewer,drain or sump; or is shown on the Schedule of Covered Property, we will not pay for any loss or damage resulting from (d) Water under the ground surface pressing any occurrence which would be considered a on, or flowing or seeping through: flood for the purpose of the National Flood Insurance Program. LMCIT MPCB(11-99)(Rev. 11-04) Page 6 of 20 (4) For any newly acquired or constructed damage as if the water and supplemental flood covered property, covered property in transit, or coverage was shown as Code C on the Schedule of covered property that is temporarily at an Covered Property. unscheduled location, as provided by SECTION I, 1.a., COVERED PROPERTY; or builders risk 2. LIMITS OF COVERAGE property as provided by SECTION V, 1., BUILDINGS IN THE COURSE OF The maximum amount we will pay for all losses or CONSTRUCTION, ALTERATION, OR REPAIR damages covered under this SECTION IV is limited as COVERAGE, that are not shown on the Schedule described in SECTION VI-LIMITS OF COVERAGE of Covered Property, we will pay any loss or any AND VALUATION. SECTION V - BUILDINGS IN THE COURSE OF CONSTRUCTION, ALTERATION, OR REPAIR COVERAGE 1. COVERAGE AGREEMENT 2. PROPERTY NOT COVERED a. We will pay for direct physical loss of or damage We will not cover the following types of property: to your builders risk property unless the cause of loss or damage is not covered, as described under a. Any builders risk property if the approved SECTION III - CAUSES OF LOSS AND estimated total project cost exceeds $2,000,000 as DAMAGES NOT COVERED. The amount we of the date construction commenced. will pay for loss or damage is limited as described py g in SECTION VI-LIMITS OF COVERAGE AND b. Land, subsoil, crops or lawns. VALUATION. 3. ADDITIONAL COVERED LOSS OR b. We will pay for loss to builders risk property in DAMAGE transit as described in SECTION VI - LIMITS OF COVERAGE AND VALUATION. We will pay for covered losses and damages as described in SECTION II - ADDITIONAL c. We will pay for loss to builders risk property that COVERED LOSS OR DAMAGE as a result of direct is at a temporary location other than the physical damage to your builders risk property. construction location as described in SECTION VI -LIMITS OF COVERAGE AND VALUATION. 4. WATER AND SUPPLEMENTAL FLOOD COVERAGE d. We will also cover the interest of contractors and subcontractors in builders risk property during We will pay for loss or damage to your builders risk construction to the extent of the city's obligation property as described in SECTION IV - WATER for a covered physical loss or damage to such AND SUPPLEMENTAL FLOOD COVERAGE. covered property as specified in the applicable contract. Such interest of contractors and 5. ADDITIONAL DEFINITIONS subcontractors is limited to the property for which they have been hired to perform such work and Project cost means the cost of construction, materials, such interest will not extend to any loss of and architectural, legal, financial and other revenue, extra expense, or expediting expense professional services relating to the construction, sustained by the contractor and subcontractors as alteration or repair project. provided by this covenant. LMCIT MPCB(11-99)(Rev. 11-04) Page 7 of 20 SECTION VI - LIMITS OF COVERAGE AND VALUATION 1. LIMITS OF COVERAGE (3) Golf course property: $100,000 per occurrence for direct damage to golf course a. We will not pay for more than the general limit per property and debris removal of covered property occurrence specified in Item 5 of the Declarations. and non-covered property. b. We will not pay for more than the specific f. The sublimits stated below are in addition to the property limit for loss or damage to any general limit per occurrence: buildings/contents, property in the open or builders risk property in any one occurrence. (1) Newly acquired or constructed building/ contents or property in the open at any one c. We will not pay for loss or damage in any one location: $5,000,000 occurrence until the amount of loss or damage exceeds the Deductible in Item 7 of the (2) Newly acquired or constructed mobile Declarations. We will then pay the amount of loss property: $250,000 per unit or damage in excess of the Deductible, up to the applicable limits of coverage: g. Except as provided in paragraph h. the limits for the additional covered loss or damage are (1) The Deductible applies against the total loss specified in Item 5 of the Declarations and are incurred by you from any one occurrence, listed below. The limits are in addition to the regardless of the number of locations involved. general limit per occurrence and the specific property limit: (2) If two or more deductibles in Item 7 of the Declarations for property coverage apply to one (1) Asbestos clean-up, abatement and removal: occurrence for you, the total to be deducted will $250,000 per location not exceed the largest deductible applicable. (2) Loss of revenue, extra expense and d. The sublimits stated below are per occurrence and expediting expense: $5,000,000 per occurrence are part of and not in addition to the specific property limit: (3) Demolition and debris removal: For each occurrence, an amount equal to 25% of the (1) Computer equipment data and media: estimated replacement cost of the covered property $1,000,000 as stated in the Schedule of Covered Property. However, if there is no direct physical loss or (2) Fine arts: $500,000 damage to covered property, the most we will pay is$50,000 per occurrence. (3) Personal effects: $25,000 per occurrence, but not to exceed$2,500 per employee These limits do not apply to golf course property. (4) Business personal effects: $25,000 per (4) Extraordinary expense: $100,000 per annual occurrence,but not to exceed$5,000 per employee aggregate e. The sublimits stated below are per occurrence and (5) Leasehold interest: $500,000 per location are part of and not in addition to the general limit per occurrence: (6) Pollutant cleanup and removal: $100,000 per location (1) Covered property in transit: $250,000 (7) Errors: 90% of the loss, subject to (2) Unscheduled location: $500,000 $500,000 per occurrence LMCIT MPCB(11-99)(Rev. 11-04) Page 8 of 20 (8) Rental reimbursement: $25,000 per 2. LOSS VALUATION annual aggregate a. GENERAL PROVISIONS (9) Arson reward: $5,000 per fire loss (1) Definitions: (10) Accounts receivable: $500,000 per location (a) Covered property is deemed to be destroyed if (11) Valuable papers and records: $500,000 per the replacement cost to rebuild or replace the location property is less than the sum of the replacement cost to repair the property plus the reduction, if (12) Utility Services: $100,000 per occurrence any, in the fair market value of the repaired property. h. The limit for damage caused by criminal acts other than vandalism is $1,000,000. This limit applies (b) Replacement cost means the cost to repair or to any direct physical loss or damages as provided replace covered property that is damaged or in Section I and to any additional covered loss or destroyed, using new materials of equivalent size, damages as provided in Section II. This limit is kind and quality. Replacement cost includes any part of and not in addition to the general limit per additional costs necessary to comply with building occurrence and the specific property limit. codes. i. The limits for water and supplemental flood (2) Adjustment: coverage are specified in Item 5 of the Declarations and are stated below: Except as provided in b. below, in the event of direct physical loss of or damage to your covered (1) $500,000 per occurrence. property, the basis of adjustment will be as follows: (2) The water and supplemental flood coverage annual aggregate is the most we will pay for water (a) If the covered property is destroyed and is and supplemental flood coverage loss during the replaced or rebuilt,LMCIT will pay the following: annual coverage period. (i) If the covered property is replaced or (3) The sublimits stated below are per rebuilt at the same location, the replacement occurrence and are part of and not in addition to cost of the covered property with similar size the per occurrence limit: and construction; (a) Golf course property: $100,000 (ii) If the covered property is replaced or rebuilt at a different location, the replacement (b) Property in transit: $250,000 cost cannot be greater than if you would have rebuilt at the same location with similar size j. The limits for Buildings in the Course of and construction; or Construction,Alteration, or Repair Coverage are: (iii)If the covered property is replaced or (1) Any one location: $2,000,000 rebuilt at the same location with different size or construction, the replacement cost cannot (2) The limits stated below are part of and not in be greater than if you would have rebuilt at the addition to the any one location limit: same location with similar size and construction. (a) Property in transit: $250,000 (b) If the covered property is destroyed and is not (b) Temporary location: $500,000 replaced or rebuilt,LMCIT will pay the fair market value of the property at the time of the loss. II LMCIT MPCB(11-99)(Rev. 11-04) Page 9 of 20 (c) If the covered property is damaged but not Unauthorized intrusive codes or programming, destroyed and is repaired, LMCIT will pay the commonly known as a computer virus or hacking eP � P Y Y P g actual replacement cost to repair the property plus intrusion, that are entered into your computer the amount of the reduction, if any, in the fair equipment, data and media, are considered direct market value of the repaired property. physical loss of or damage to your covered property. (d) If the covered property is damaged but not destroyed and remains in service without being (3) Accounts receivable: repaired, LMCIT will pay the amount of the reduction, if any, in the fair market value of the For accounts receivable, LMCIT will pay for all damaged property. amounts due from your customers that you are unable to collect; interest charges on any loan (e) If the covered property is damaged but not required to offset amounts you are unable to destroyed and the city elects not to repair it but to collect pending our payment of these amounts; raze or otherwise dispose of the property, LMCIT collection expenses in excess of your normal will pay to the city the estimated replacement cost collection expenses that are made necessary by the to repair the property. loss; and other reasonable expenses you incur to re-establish your accounts receivable. If you are LMCIT will not pay you more than your financial unable to establish the amount of accounts interest in the covered property. receivable outstanding at the time of the loss, we will use the average monthly amounts of accounts (3) Limitations: receivable for the 12 months immediately preceding the month in which the loss occurs, In any event, LMCIT will not pay you more than adjusting to reflect the normal business during the the following: loss month. (a) Your financial interest in the covered property; (4) Fine arts: or For fine arts which are destroyed,LMCIT will pay (b) The fair market value of the covered property, the fair market value, regardless of whether the if the covered property is vacant property. covered property is replaced or not. b. SPECIAL PROVISIONS (5) Mobile property: (1) Valuable papers and records: For mobile property that is damaged or destroyed, LMCIT will not pay for more than the amount you For valuable papers and records,LMCIT will pay actually spent to repair or replace the damaged the cost of blank materials for reproducing the mobile property; or 200% of the fair market value records,plus the cost of labor to transcribe or copy of the damaged property,whichever is less. the records when there is a duplicate, or to reproduce the data of records. (6) Police dogs: (2) Computer equipment, data and media: A police dog is considered to be destroyed if because of injury or disease the dog is not able to For computer equipment, data, or media, LMCIT perform the dog's normal functions and there is no will pay the cost to replace destroyed equipment reasonable prospect that the dog will be able to do with equipment of greater processing ability; the so. cost to reproduce or restore the data; and the cost to repair or replace media with the same kind and (a) For police dogs that are destroyed, LMCIT quality of material. Any replacement equipment will pay for the cost to replace the dog and the cost must be able to perform the same function as the of any necessary training. destroyed equipment. LMCIT MPCB(I1-99)(Rev. 11-04') Page 10 of20 (b) If a police dog is injured as a result of an expenses, necessary to resume operations with the accident or an intentional act,LMCIT will pay the same quality of service that existed just before the cost of necessary treatment and care to enable the direct physical loss or damage; and dog to resume performing the dog's normal functions. But LMCIT will not pay the cost of (d) Other relevant sources of information, treatment and care to treat or prevent disease. including: For any single occurrence, LMCIT will not pay i) Your financial records and accounting more than the amount you actually spend to procedures; replace the police dog or for care and treatment of the police dog, or 200% of the fair market value of ii) Bills, invoices and other vouchers; and the police dog, whichever is less. iii) Deeds,liens or contracts. (7) Trees and shrubs: (2) The amount of extra expense loss LMCIT will pay (a) For a tree or shrub which is destroyed,LMCIT will be determined based on: will pay the actual cost to replace it with a tree or shrub of similar type and of a size that is normally (a) All expenses that exceed the normal operating considered to be reasonable and practical to expenses that would have been incurred by transplant, regardless of whether the tree or shrub operations during the period of recovery if no is replaced or not. direct physical loss or damage had occurred. We will deduct from the total of such expenses: (b) For a tree or shrub that is damaged but not destroyed, LMCIT will pay the actual cost of any i) The salvage value that remains of any service, treatment, or repair that is actually property bought for temporary use during the performed. period of recovery once operations are resumed; But, we will not pay more than the actual cost to replace it with a tree or shrub of similar type and ii) Any extra expense that is paid for by other of a size that is normally considered to be insurance, except for insurance that is written reasonable and practical to transplant. subject to the same plan, terms and conditions and provisions as this insurance; and (8) Business personal effects: (b) All necessary expenses that reduce the Notwithstanding the provisions of paragraph 11. business income loss that otherwise would have of the Common Conditions, LMCIT coverage for been incurred. business personal effects is primary with respect to any coverage provided under the employee's (3) We will reduce the amount of your: homeowner's insurance or similar coverage. (a) Loss of revenue loss, other than extra expense c. LOSS OF REVENUE,EXTRA EXPENSE AND or expediting expense to the extent you can resume EXPEDITING EXPENSE PROVISIONS your operations, in whole or in part, by using damaged or undamaged property (including (1) The amount of loss of revenue loss LMCIT will merchandise or stock) at the described location or pay,will be determined based on: elsewhere. (a) The gross revenue of the city before the direct (b) Extra expense or expediting expense loss to physical loss or damage occurred; the extent you can return your operations to normal and discontinue such extra expense or (b) The likely gross revenue of the city if no expediting expense. physical loss or damage had occurred; However, if you do not resume operations, or do (c) The operating expenses, including payroll not resume operations as quickly as possible, we LMCIT MPCB(11-99)(Rev. 11-04) Page 11 of 20 will pay based on the length of time it would have and impartial person. Each appointee shall be a taken to resume operations as quickly as possible. professional appraiser or other person with appropriate professional expertise. The two d. APPRAISAL AND ARBITRATION appointees will select an umpire. If they cannot agree, either may request that selection be made Either party may make a written demand for by a judge of a court having jurisdiction. The two arbitration if the city and LMCIT disagree on any of appointees will each separately state their the following: respective estimates of the value or cost which is in question. If they fail to agree, they will submit (1) The fair market value of covered property prior to their differences to the umpire. A decision agreed the loss or damage; to by any two will be binding. (2) The fair market value of covered property after the Each party will: loss or damage; (a) Pay the cost of its own appointee; and (3) The fair market value of covered property after repair; or (b) Share equally the expense of the umpire and any other expenses related to the arbitration (4) The estimated cost to repair the covered property. process. In this event, each party will select a competent SECTION VII - DEFINITIONS 1. Accounts receivable means: 3. Builders risk property means: a. All amounts due from your customers that you (1) Building or structure in the course of are unable to collect and there is a loss; construction; b. Interest charges on any loan required to offset (2) Alterations or repair of the city's existing amounts you are unable to collect pending our building; or payment of these accounts; (3) Addition to the city's existing building. c. Collection expenses in excess of your normal collection expenses that are made necessary by the (4) Builders risk property also includes: loss; and (a) Foundation of the building or structure in d. Other reasonable expenses that you incur to re- the course of construction or an addition to the establish your records of accounts receivable. city's existing building; e. Accounts receivable does not include: (b) Materials, equipment, and supplies used for construction, alteration or repair, provided (1) The amount of the accounts that you are such property is intended to be permanently in able to re-establish or collect; or on the builders risk property; and (2) An amount to allow for probable bad (c) Temporary structures built or assembled debts that you are normally unable to collect; on location, including cribbing, scaffolding and and construction forms used in the course of construction or alterations or repair of the (3) All unearned interest and service charges. builders risk property. 2. Automobile means a land motor vehicle, trailer or 4. Building means the building or structure including: semi-trailer designed for travel on public roads. LMCIT MPCB(11-99)(Rev. 11-04) Page 12 of20 a. Completed additions; f. Airport commission; b. Permanently installed fixtures, machinery and g. Welfare or public relief agency; equipment; h. School board; or c. Outdoor fixtures; i. Joint powers entity. d. Contents owned by you that are used to maintain or service the building or structure or its 8. Computer equipment, data and media means a premises,including: network of machine components capable of accepting information, processing it according to (1) Fire extinguishing equipment; plan and producing the desired results. It includes: (2) Outdoor furniture; a. Air conditioning, fire protection equipment and electrical equipment used exclusively in your (3) Floor coverings; and computer operations; (4) Appliances used for refrigerating, b. Facts, concepts or instructions in a form ventilating, cooking, dishwashing or usable for communications; laundering; or c. Interpretation or processing by automatic 5. Building/contents, as described in the Schedule of means; or Covered Property,means the following: d. Computer programs and materials on which a. Building; or the data is recorded. b. Contents. 9. Contents means property located in or on the building described in the Declarations or in the 6. Business personal effects means personal property open (or in a vehicle) within 100 feet of the of your employees that is used to maintain the described building, consisting of the following: operations of the city. a. Furniture and fixtures; 7. City means governmental body or entity first named in the Declarations. For purposes of this b. Machinery and equipment; coverage, city includes relief associations. c. Stock; Unless specifically named in the Declarations, city shall not include: d. All other contents owned by you and used in your municipal operations; a. Gas, electrical, or steam utilities commission; e. Labor, materials or services furnished or b. Port authority, housing and redevelopment arranged by you on contents of others; authority, economic development authority, area or municipal redevelopment authority, or similar f. Your use interest as tenant in improvements agency; and betterments. Improvements and betterments are fixtures,alterations,installations or additions: c. Municipal power agency; (1) Made a part of the building or structure d. Municipal gas agency; you occupy but do not own; and e. Hospital or nursing home board or (2) You acquired or made at your expense but commission; cannot legally remove. LMCIT MPCB(11-99)(Rev. 11-04) Page 13 of 20 g. Contents of others that are in your care, But employee does not mean any agent, broker, custody and control. factor, commission merchant, consignee, independent contractor or representative of the However, our payment for loss or damage to same general character. contents will be for the account of the owner of the property. 11. Expediting expense means the reasonable extra cost of temporary repair and expediting the repair h. Trees and shrubs; of damaged covered property, overtime and express freight or other rapid means of i. Accounts receivable; transportation. j. Computer equipment data or media; 12. Extra expense means the excess total cost necessarily incurred to continue your operations as k. Valuable papers and records; reasonably as practicable during the period of recovery that is over and above the cost that would 1. Personal effects; or normally have been incurred to conduct the operations during the same period had no loss or m. Fine arts. damage occurred. It includes: But, contents does not mean mobile property. a. Extra expense to avoid or minimize the suspension of business and to continue operations: 10. Employee means: (1) At the described location; or a. A person whom you compensate directly by salary, wages or commissions, and who you have (2) At a replacement location or at temporary the right to direct or control while performing locations,including: duties for you; (a) Relocation expenses; and b. Member of the city council; (b) Costs to equip and operate the c. Member of a city board, commission, or replacement or temporary locations. committee which is not excluded by the definition of city; b. Extra expense to minimize the suspension of business if you cannot continue operations. d. Elected or appointed official of the city; c. Extra expense to: e. Volunteer person or organization while acting on behalf of the city and subject to the city's (1) Repair or replace any covered property; or direction and control; (2) Research, replace or restore the lost f. Other authorized person or agent of the city information on damaged valuable papers and while acting on behalf of the city, but excludes records; independent contractors; to the extent it reduces the amount of loss that g. City relief association members, officers, and otherwise would have been payable under this employees; or covenant. h. Any natural person employed by an 13. Fine arts means property or articles of artistic or employment contractor while that person is historical value including paintings, etchings, subject to your direction and control and pictures, tapestries, statuary, marbles, bronzes, performing services for you excluding, however, porcelain, rare glass, antique silver, china, books any such person while having care and custody of and manuscripts,rugs and similar articles. property outside the premises. LMCIT MPCB(11-99)(Rev.11-04) Page 14 of 20 • 14. Golf course property means bridges, paved d. Vehicles and its equipment whether self- roadways, paved cart paths and other paved propelled or not, maintained primarily to provide surfaces, shelters,restrooms,ball washers, screens, mobility to permanently mounted equipment; flags,markers, signs,tees, fairways and greens. e. Tools, including protective clothing and gear, 15. Joint powers entity means an operating entity and other similar property; created by two or more governmental units entering into an agreement as provided by statute f. Business personal effects; or for the joint exercise of governmental powers. An intergovernmental agreement will be deemed to g. Mobile property in your care, custody and create a joint powers entity if the agreement control. establishes a board with the effective power to do any of the following, regardless of whether the 20. Newly acquired or constructed means that the city specific consent of the constituent governmental has acquired or taken possession of the property units may also be required: during the current covenant period. a. To receive and expend funds; 21. Occurrence means an accident or event that causes a direct physical loss or damage to covered b. To enter into contracts; property. Any continuous accident or event that causes more than one direct physical loss or c. To hire employees; damage to covered property during a 72 hour period constitutes an accident or event as a single d. To purchase or otherwise acquire or hold real occurrence. or personal property; or 22. Operations means: e. To sue or be sued. a. Your city activities occurring at the described 16. LMCIT means the League of Minnesota Cities location; or Insurance Trust. b. The tenantability of the described location. 17. Location means: 23. Our means the League of Minnesota Cities a. The site of any covered building/contents, Insurance Trust. property in the open, or builders risk property; or 24. Period of recovery means the period of time that: b. The site of any covered newly acquired or constructed building/contents or property in the a. Begins immediately after the time of direct open; physical loss or damage to covered property. 18. Loss of revenue means gross revenue, including b. Ends on the earlier of: rental value, less charges and expenses that do not necessarily continue. (1) The date covered property is actually repaired,rebuilt or replaced and operations are 19. Mobile property means: resumed; and your operations would generate the loss of revenue amount that would have a. Machinery or equipment designed for use existed if no direct physical or damage had principally off public roads; occurred; or b. Police dogs; (2) 60 consecutive days after the date when the covered property is actually repaired, c. Vehicles maintained for use solely on or next rebuilt or replaced and operations are to locations owned or rented by you and not resumed. licensed for highway use; LMCIT MPCB(11-99)(Rev. 11-04) Page 15 of20 However, the expiration date of the covenant will (2) Sinking or collapse of land into man-made not cut short the period of recovery. underground cavities. 25. Personal effects means personal property of your b. Falling object does not include loss or damage employees, other than business personal effects. to: 26. Pollutants means any solid, liquid, gaseous or (1) Property in the open; or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and (2) The interior of a building or structure, or waste. Waste includes materials to be recycled, property inside a building or structure, unless reconditioned or reclaimed. the roof or an outside wall of the building or structure is first damaged by a falling object. 27. Property in the open means: c. Water damage means accidental discharge or a. Equipment such as, but not limited to, leakage of water or steam from any part of a benches, fences, light poles, playground system or appliance containing water or steam. equipment, statues, scoreboards, traffic signals or signs that are in the open and are not part of a 31. Stock means merchandise held in storage or for building; or sale, raw materials and in process or finished goods, including supplies used in their packing or b. Golf course property. shipping. 28. Rental value means the sum of: 32. Us means the League of Minnesota Cities Insurance Trust. a. The total anticipated gross rental income from tenant occupancy of the covered property as 33. Utility service property means any of the furnished and equipped by you; and following types of property supplying water, communication service or power to covered b. The amount of all continuing charges that are property: the legal obligation of the tenant and that would otherwise be your obligation; and a. Pumping stations or water mains supplying water; c. The fair rental value of any portion of the covered property that you occupy. b. Equipment supplying communication services; or 29. Specific property limit means 150% of the estimated replacement cost of the covered property c. Utility generation plants, switching plants, as stated in the Schedule of Covered Property. substations, transformers, and transmission lines supplying electricity, steam or gas. 30. Specified causes of loss means fire; lightning; explosion; windstorm or hail; smoke; aircraft or 34. Vacant property means: vehicles; riot or civil commotion; vandalism; criminal acts other than vandalism; leakage or a. Property owned by the city is deemed to be discharge from fire extinguishing equipment; vacant property if for a period of 60 consecutive sinkhole collapse; volcanic action; falling objects; days less than 31% of the building's total square weight of snow, ice or sleet; or water damage: footage is either used by the city for customary operations or is leased out. a. Sinkhole collapse means the sudden sinking or collapse of land into underground empty spaces b. Property rented or leased to the city is deemed created by the action of water on limestone or to be vacant property if for a period of 60 dolomite. This cause of loss does not include: consecutive days the property does not contain enough contents to conduct customary operations. (1) The cost of filling sinkholes; or LMCIT MPCB(11-99)(Rev. 11-04) Page 16 of 20 However, the following are not considered vacant drawings, films, maps and mortgages. property: But valuable papers and records does not mean (1) Builders risk property; or money or securities, converted data, programs or instructions used in your data processing (2) A building or structure which is used and operations, including the materials on which the occupied, and which is designed to be used data is recorded. and occupied, on an occasional, intermittent, or seasonal basis. 36. We means the League of Minnesota Cities Insurance Trust. 35. Valuable papers and records means inscribed, printed or written documents, manuscripts or 37. You means the city shown in the Declarations. records, including abstracts, books, deeds, 38. Your means the city shown in the Declarations. SECTION VIII - CONDITIONS 1. CONTROL OF PROPERTY coverage. Any act or neglect of any person other than you 5. COVERAGE PERIOD, COVERAGE beyond your direction or control will not affect this TERRITORY coverage. Under this coverage part: The breach of any condition of this coverage part at any one or more locations will not affect coverage at a. We cover loss or damage commencing: any location where, at the time of loss or damage, the breach of condition does not exist. (1) During the coverage period shown in the Declarations; and 2. COVERAGE UNDER TWO OR MORE COVERAGES (2) Within the coverage territory. If two or more of this covenant's coverages apply to b. The coverage territory is: the same loss or damage, we will not pay more than the actual amount of the loss or damage. The United States of America (including its territories and possessions); 3. LEGAL ACTION AGAINST US (1) Puerto Rico; and No one may bring legal action against us under this coverage part unless: (3) Canada. a. There has been full compliance with all of the 6. LOSS CONDITIONS terms of the coverage part; and a. Abandonment: b. The action is brought within 2 years after the date on which the direct physical loss or damage You cannot abandon your property to us. occurred. b. Duties in the event of loss or damage: 4. NO BENEFIT TO BAILEE You must see that the following are done in the No person or organization, other than you, having event of loss or damage to covered property: custody of covered property will benefit from this LMCIT MPCB(11-99)(Rev. I 1-04) Page 17 of 20 I f (1) Notify the police if a law may have been d. Recovered Property: broken. If either you or we recover any property after loss (2) Give us prompt notice of the loss or damage. settlement, that party must give the other prompt notice. At your option, the property will be Include a description of the property involved. returned to you. You must then return to us the amount we paid to you for the property. We will (3) As soon as possible, give us a description of pay recovery expenses and the expenses to repair how, when and where the loss or damage the recovered property, subject to the amount occurred. applying under this covenant. (4) Take all reasonable steps to protect the 7. PREMIUMS AND PREMIUM covered property from further damage. If feasible, ADJUSTMENTS set the damaged property aside and in the best possible order for examination. Also keep record a. You agree to furnish us with a schedule of of your expenses, for consideration in the buildings/contents, property in the open and settlement of the claim. mobile property valued at greater than $25,000, and builders risk property prior to the beginning of (5) At our request, give us complete inventories each covenant period. of the damaged and undamaged property. Include quantities, costs, values, and amount claim of loss b. These schedules must include all buildings/ demand. contents,property in the open and mobile property valued at greater than $25,000, and builders risk (6) Permit us to inspect the property and records property that was covered by your prior covenant proving the loss or damage. but was not described in the prior covenant's Schedule of Covered Property or Schedule of (7) If requested, permit us to question you under Covered Mobile Property. oath at such times as may be reasonably required about any matter relating to this covenant or your c. The initial annual premiums will be based upon claim, including your books and records. In such these schedules and the appropriate replacement event,your answers must be signed. cost values. (8) Send us a signed, sworn statement of loss d. You will pay us additional premium if the containing the information we request to settle the following property is added during the covenant claim. You must do this within 60 days after our period: request. We will supply you with the necessary forms. (1) Building/contents or property in the open with a replacement cost value of greater than (9) Cooperate with us in the investigation or $5,000,000; settlement of the claim. (2) Mobile property with a replacement cost value c. Loss Payment: of greater than$250,000; (1) We will give notice of our intentions within 30 (3) Builders risk property with a project cost of days after we receive the sworn statement of loss. Y greater than$2,000,000; or (2) We may adjust losses with the owners of lost (4) Additional covered loss or damage limits, or or damaged property if other than you. If we pay property sublimits. the owners, such payments will satisfy your claims against us for the owners' property. We will not e. We will return premium to you if the following pay the owners more than their financial interest in property is deleted during the covenant period: the covered property. (1) Building/contents or property in the open with LMCIT MPCB(11-99)(Rev. 11-04) Page 18 of 20 a replacement cost value of greater than d. If we deny your claim because of your acts or $5,000,000; because you have failed to comply with the terms of this coverage part,the mortgage holder will still (2) Mobile property with a replacement cost value have the right to receive loss payment if the of greater than$250,000; mortgage holder: (3) Builders risk property with a project cost of (1) Pays any premium due under this coverage greater than $2,000,000; or part at our request if you have failed to do so; (4) Additional covered loss or damage limits, or (2) Submits a signed, sworn proof of loss within property sublimits. 60 days after receiving notice from us of your failure to do so; and 8. CANCELLATION (3) Has notified us of any change in ownership, a. You may cancel Part One of this covenant. You occupancy or substantial change in risk known to must mail or deliver not fewer than 30 days the mortgage holder. advance written notice to us stating when the cancellation is to take effect. All of the terms of this coverage part will then apply to the mortgage holder. b. We may cancel Part One of this covenant. We must mail or deliver to you not fewer than 30 days e. If we pay the mortgage holder for any loss or advance written notice stating when the damage and deny payment to you because of your cancellation is to take effect. Mailing that notice acts or because you have failed to comply with the to you at your mailing address shown in the terms of this coverage part: Declarations will be sufficient to prove notice. However, we may cancel with 10 days written (1) The mortgage holder's rights under the notice for nonpayment of premium. mortgage will be transferred to us to the extent of the amount we pay; and c. The covenant period will end on the day and hour stated in the cancellation notice. (2) The mortgage holder's right to recover the full amount of the mortgage holder's claim will not be d. If Part One of this covenant is canceled, we will impaired. At our option, we may pay to the send you any premium refund due. If we cancel, mortgage holder the whole principal on the the refund will be pro rata. If you cancel, the mortgage plus any accrued interest. In this event, refund may be less than pro rata, computed in your mortgage and note will be transferred to us accordance with our current cancellation rules. and you will pay your remaining mortgage debt to The cancellation will be effective even if we have us. not made or offered a refund. f. If we cancel this covenant, we will give written 9. MORTGAGE HOLDERS notice to the mortgage holder at least: a. The term mortgage holder includes trustee. (1) 10 days before the effective date of cancellation if we cancel for your nonpayment of b. We will pay for covered loss of or damage to premium; or buildings or structures to each mortgage holder shown in the Declarations in their order of (2) 30 days before the effective date of precedence, as interests may appear. cancellation if we cancel for any other reason. give c. The mortgage holder has the right to receive loss g. If we do not renew this covenant, we will g payment even if the mortgage holder has started written notice to the mortgage holder at least 10 foreclosure or similar action on the building or days before the expiration date of this covenant. structure. LMCIT MPCB(11-99)(Rev. 11-04) Page 19 of 20 10. DEDUCTIBLES a. The Limits of Coverage shown in the Declarations apply to the amount of loss or damages in excess of the Municipal Property Deductible shown in the Municipal Property, Crime, Bond and Equipment Breakdown Declarations or the General Annual Aggregate Deductible, if any, shown in the Common Coverage Declarations, and the Limits of Coverage will not be reduced by the Deductible amount. b. LMCIT shall be liable to the city or to others on behalf of the city only to the amount of loss or damages in excess of any deductible amounts. We will then pay the amount of loss up to the applicable limit of coverage. LMCIT MPCB(11-99)(Rev. 11-04) Page 20 of 20 League of Minnesota Cares Cftia, ;pr cotiig excafie rice MUNICIPAL CRIME COVERAGE PART TWO LMCIT MPCB(11-99)(Rev.11-04) MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE WHAT IT IS AND WHERE YOU CAN FIND IT INDEX CRIME COVERAGE - PART TWO League of Minnesota Cities Cities promoting exce lence PAGE SECTION I - COVERAGE AGREEMENT 1 SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED 1-2 SECTION III -LIMITS OF COVERAGE 2 SECTION IV-DEFINITIONS 2-4 SECTION V- CONDITIONS 4-6 LMCIT MPCB(11-99)(Rev.11-04) MUNICIPAL CRIME COVERAGE PART TWO Various provisions in this covenant restrict coverage. Words and phrases that appear in italics have special Read the entire covenant carefully to determine rights, meaning, as given in SECTION IV-DEFINITIONS. duties and what is or is not covered. SECTION I - COVERAGE AGREEMENT 1. THEFT, DISAPPEARANCE, AND We will pay for loss of money and securities resulting DESTRUCTION INSIDE THE PREMISES directly from the theft, disappearance, or destruction outside the premises in the care,custody and control of We will pay for loss of money and securities resulting a messenger or an armored motor vehicle. directly from theft, disappearance, or destruction inside the premises or banking premises. 3. FORGERY OR ALTERATION We will pay the loss of, and loss from damage to, the We will pay for loss involving instruments of payment property that contains the money and securities; and resulting directly from the forgery or alteration of, on loss from damage to the premises resulting directly or in any instruments of payment. from the theft or attempted theft. If you are sued for refusing to pay any instrument of 2. THEFT, DISAPPEARANCE, AND payment, we will pay any reasonable legal expenses DESTRUCTION - OUTSIDE THE that you incur and pay in that defense. The amount we PREMISES pay will be in addition to the applicable limit of coverage. SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED We will not pay for loss or damages as specified 4. GOVERNMENTAL ACTION below: Loss resulting from seizure or destruction of property 1. ACCOUNTING OR ARITHMETICAL by order of governmental authority. ERRORS OR OMISSIONS 5. INDIRECT LOSS Loss resulting from accounting or arithmetical errors and omissions. Loss that is an indirect result of any act or occurrence covered by this covenant including, but not limited to, 2. ACTS OF EMPLOYEES loss resulting from: Loss resulting from any dishonest or criminal act a. Your inability to realize income that you would committed by any of your employees: have realized had there been no loss of, or loss from damage to, money and securities; or a. Acting alone or in collusion with other persons; or instruments of payment. b. While performing services for you or otherwise. b. Payment of damages of any type for which you are legally liable. 3. FIRE But, we will pay compensatory damages arising Loss or damage to the premises resulting from fire, directly from a loss covered under this covenant. however caused. LMCIT MPCB(11-99)(Rev. 11-04) Page 1 of 6 c. Payment of costs, fees, or other expenses you incur malicious mischief. in establishing either the existence or the amount of loss under this covenant. 9. WAR 6. LEGAL EXPENSES Loss resulting from: Expenses related to any legal action. a. War, including undeclared or civil war; 7. NUCLEAR HAZARD b. Warlike action by a military force, including action in hindering or defending against an actual Loss resulting from nuclear reaction or radiation, or or expected attack, by any government,sovereign radioactive contamination,however caused. or other authority using military personnel or other agents; or 8. VANDALISM c. Insurrection, rebellion, revolution, usurped power, Loss from damage to the premises or its exterior or to or action taken by governmental authority in containers of money and securities by vandalism or hindering or defending against any of these. SECTION III - LIMITS OF COVERAGE 1. The most we will pay in any one occurrence is the unless the amount of loss exceeds the Deductible applicable limit of coverage shown in the amount shown in the Declarations. We will then Declarations. pay the amount of loss in excess of the Deductible amount,up to the limit of coverage. 2. We will not pay for loss in any one occurrence SECTION IV - DEFINITIONS 1. Banking premises means the interior of that f. Welfare or public relief agency; portion of any building occupied by a banking institution or similar safe depository. g. School board; 2. City means the governmental body or entity first h. Airport commission; or named in the Declarations. For purposes of this coverage, city includes relief associations. Unless i. Joint powers entity. specifically named in the Declarations, city shall not include: 3. Employee means: a. Gas, electrical, or steam utilities commission; a. A person whom you compensate directly by salary, wages or commissions and who you have b. Port authority, housing and redevelopment the right to direct or control while performing authority, economic development authority, area duties for you; or municipal redevelopment authority, or similar agency; b. Member of the city council; c. Municipal power agency; c. Member of a city board, commission, or committee which is not excluded by the definition d. Municipal gas agency; of city; e. Hospital or nursing home board or commission; d. Elected or appointed official of the city; LMCIT MPCB(11-99)(Rev. 11-04) Page 2 of 6 e. Volunteer person or organization while acting e. To sue or be sued. on behalf of the city and subject to the city's direction and control; 6. LMCIT means the League of Minnesota Cities Insurance Trust. f. Other authorized person or agent of the city while acting on behalf of the city, but excludes 7. Messenger means you, or any of your employees, independent contractors; while having care and custody of the money and securities outside the premises. g. City relief association members, officers, and employees; or 8. Money means: h. Any natural person employed by an a. Currency, coins, and bank notes in current use employment contractor while that person is subject and having a face value; and to your direction and control and performing services for you, excluding, however, any such b. Travelers checks, register checks and money person while having care and custody of property orders held for sale to the public. outside the premises. 9. Occurrence means: But employee does not mean any agent, broker, factor, commission merchant, consignee, a. With respect to SECTION I - COVERAGE independent contractor or representative of the AGREEMENT, 1. and 2.: same general character. (1) Act or series of related acts involving one 4. Instruments of payment means checks, drafts, or more persons; or promissory notes or similar written promises, orders or directions to pay a sum certain in money, (2) Act or event, or series of related acts or that are: events not involving any person. a. Made or drawn by or drawn upon you; or b. With respect to SECTION I - COVERAGE AGREEMENT, 3., all loss caused by any person b. Made or drawn by one acting as your agent; or or in which that person is involved, whether the that are purported to have been so made or drawn. loss involves one or more instruments of payment. 5. Joint powers entity means an operating entity The date of the occurrence is the date on which created by two or more governmental units the act, event or loss is alleged to have taken place. entering into an agreement as provided by statute If the loss or damages are alleged to have arisen for the joint exercise of governmental powers. An from a series of acts or events, the date of intergovernmental agreement will be deemed to occurrence is deemed to be the date when the first create a joint powers entity if the agreement such wrongful act or event took place or is alleged establishes a board with the effective power to do to have taken place. any of the following, regardless of whether the specific consent of the constituent governmental 10. Our means the League of Minnesota Cities units may also be required: Insurance Trust. a. To receive and expend funds; 11. Premises means the interior of that portion of any building you occupy in conducting your business. b. To enter into contracts; 12. Securities means negotiable and nonnegotiable c. To hire employees; instruments or contracts representing either money or other property and includes: d. To purchase or otherwise acquire and hold real or personal property; or a. Tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused LMCIT MPCB(11-99)(Rev. 11-04) Page 3 of 6 value in a meter) in current use; and 14. Us means the League of Minnesota Cities Insurance Trust. b. Evidences of debt issued in connection with credit or charge cards, which cards are not issued 15. We means the League of Minnesota Cities by you; Insurance Trust. but does not include money. 16. You means the city shown in the Declarations. 13. Theft means any act of stealing. 17. Your means the city shown in the Declarations. SECTION V - CONDITIONS 1. COVENANT PERIOD 4. INTERESTS COVERED a. The covenant period is shown in the Declarations. Coverage provided by this covenant is limited to money and securities; and instruments of payment; and b. Subject to the loss sustained during prior insurance damages to property or premises, as described under condition, we will pay only for loss that you SECTION I-COVERAGE AGREEMENT, 1.,that: sustain through acts committed or events occurring during the covenant period. a. You own or hold; or 2. DISCOVERY PERIOD FOR LOSS b. For which you are legally liable. We will pay only for covered loss discovered no later However, this covenant is for your benefit only. It than one year from the end of the covenant period. provides no rights or benefits to any other person or organization. 3. DUTIES IN THE EVENT OF LOSS 5. LEGAL ACTION AGAINST US After you discover a loss or a situation that may result in loss of, or loss from damage to, money and You may not bring any legal action against us securities; or instruments of payment,you must: involving loss: a. Notify us as soon as possible. a. Unless you have complied with all the terms of this covenant; and b. Submit to examination under oath at our request and give us a signed statement of your answers. b. Until 90 days after you have filed proof of loss with us; and c. Give us a detailed, sworn proof of loss within 120 days. If the loss was due to forgery or alteration, c. Unless brought within 2 years from the date you you must include with your proof of loss any discover the loss. instrument involved in that loss; or if that is not possible, you must give us an affidavit setting 6. LOSS COVERED UNDER MORE THAN forth the amount and cause of loss. ONE COVERAGE OF THIS COVENANT d. Cooperate with us in the investigation and If two or more coverages of this covenant apply to the settlement of any claim. same loss,we will pay the lesser of: e. If you have reason to believe that any loss of, or a. The actual amount of loss; or loss from damage to, money or securities involves a violation of law,you must notify the police. b. The sum of the limits of coverage applicable to that loss. LMCIT MPCB(11-99)(Rev. 11-04) Page 4 of 6 7. LOSS COVERED UNDER THIS 10. OTHER INSURANCE COVENANT AND PRIOR COVENANT ISSUED BY US This covenant does not apply to loss recoverable or recovered under other insurance or indemnity. If any loss is covered: However, if the limit of the other insurance or �' a. Partly by this covenant; and indemnity is insufficient to cover the entire amount of the loss, this covenant will apply to that part of the b. Partly by the prior canceled or terminated loss, other than that falling within any Deductible covenant that we had issued to you or any amount, not recoverable or recovered under the other predecessor in interest,the most we will pay is the insurance or indemnity. However, this covenant will larger of the amount recoverable under this not apply to the amount of loss that is more than the covenant or the prior covenant. applicable limit of coverage shown in the Declarations. 8. LOSS SUSTAINED DURING PRIOR INSURANCE 11. RECORDS a. If you or any predecessor in interest sustained loss You must keep records of all money and securities; and during the period of any prior insurance that you instruments of payment, so we can verify the amount or the predecessor in interest could have recovered of any loss. under that insurance, except that the time within which to discover loss had expired,we will pay for 12. TERRITORY it under this covenant provided: a. This covenant covers theft, disappearance, or (1) This covenant became effective at the time of destruction of money or securities only from acts cancellation or termination of the prior insurance; committed or events occurring within the United and States of America, U.S. Virgin Islands, Puerto Rico, Canal Zone, or Canada, and while (2) The loss would have been covered by this temporarily outside this territory for a period of covenant had it been in effect when the acts or not more than 90 days. events causing the loss were committed or occurred. b. This covenant covers loss you sustain from forgery or alteration anywhere in the world. b. The coverage under this condition is part of,not in addition to, the limits of coverage applying to this 13. VALUATION - SETTLEMENT covenant and is limited to the lesser of the amount recoverable under: a. Subject to the applicable limit of coverage provision,we will pay for: (1) This covenant as of its effective date; or (1) Loss of money, but only up to and including (2) The prior insurance had it remained in effect. its face value. We may, at our option,pay for loss of money issued by any country other than the 9. NON-CUMULATION OF LIMIT OF United States of America: COVERAGE (a) At face value in the money issued by that Regardless of the number of years this covenant country; or remains in force or the number of premiums paid, no limit of coverage cumulates from year to year or (b) In the United States of America dollar period to period. equivalent determined by the rate of exchange on the day the loss was discovered. LMCIT MPCB(11-99)(Rev. 11-04) Page 5 of 6 (2) Loss of securities, but only up to and (2) In the United States of America dollar including their value at the close of business on equivalent of the money of the country in which the day the loss was discovered, we may, at our the loss occurred determined by the rate of option: exchange on the day the loss was discovered. (a) Pay the value of such securities or replace c. Any property that we pay for or replace becomes them in kind, in which event you must assign our property. to us all your rights, title and interest in and to those securities; 14. FACSIMILE SIGNATURES: (b) Pay the cost of any Lost Securities Bond We will treat mechanically reproduced facsimile required in connection with issuing duplicates signatures the same as handwritten signatures. of the securities. However, we will be liable only for the payment of so much of the cost of the bond as would be charged for a bond having a penalty not exceeding the lesser of the: i) Value of the securities at the close of business on the day the loss was discovered; or ii) Limit of coverage. (3) Loss from damages to property or premises, as described under SECTION I - COVERAGE AGREEMENT, 1., for not more than the: (a) Actual cash value of the property on the day the loss was discovered; (b) Cost of repairing the property or premises; or (c) Cost of replacing the property with property of like kind and quality. We may, at our option, pay the actual cash value of the property or repair or replace it. If we cannot agree with you upon the actual cash value or the cost of repair or replacement, the value or cost will be determined by arbitration. b. We may, at our option, pay for loss of, or loss from damage to,property other than money: (1) In the money of the country in which the loss occurred; or LMCIT MPCB(11-99)(Rev. 11-04) Page 6 of 6 Lime League of Minnesota Cthes Cities promoting excellence MUNICIPAL BOND COVERAGE PART THREE LMCIT MP CB(11-99)(Rev. 11-04) MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE WHAT IT IS AND WHERE YOU CAN FIND IT INDEX rLme ta Cities BOND COVERAGE - PART THREE saellence PAGE SEC TION I - COVERAGE AGREEMENT 1 SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED 1 SECTION III- LIMITS OF COVERAGE 2 SECTION IV-DEFINITIONS 2-3 SECTION V- CONDITIONS 3-5 LMCIT MPCB(1 1-99)(Rev. 1 1-04) MUNICIPAL BOND COVERAGE PART THREE Various provisions in this covenant restrict coverage. Words and phrases that appear in italics have special Read the entire covenant carefully to determine rights, meaning, as given in SECTION IV -DEFINITIONS. duties and what is or is not covered. SECTION I - COVERAGE AGREEMENT We will pay for loss as provided by each coverage Declarations or endorsement, the following causes of form that is designated in the Declarations. loss and damages not covered, limits of coverage, definitions, and conditions, apply to all bond coverage Unless stated otherwise in any bond coverage form, forms forming part of this covenant. SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED We will not pay for loss damages as specified below: b. A profit and loss computation. 1. GOVERNMENTAL ACTION However, where you establish wholly apart from such computations that you have sustained a loss, then you Loss resulting from seizure or destruction of property may offer your inventory records and actual physical by order of governmental authority. count of inventory in support of the amount of loss claimed. III 2. INDIRECT LOSS 4. LEGAL EXPENSES Loss that is an indirect result of any act or occurrence covered by this covenant including, but not limited to, Expenses related to any legal action. loss resulting from: 5. NUCLEAR a. Your inability to realize income that you would have realized had there been no loss as provided Loss resulting from nuclear reaction or radiation, or by each bond coverage form that is designated in radioactive contamination,however caused. the Declarations. 6. WAR b. Payment of damages of any type for which you are y g Y tYP Y legally liable. But, we will pay compensatory Loss resulting from: damages arising directly from a loss covered under this covenant. a. War,including undeclared or civil war; c. Payment of costs, fees or other expenses you incur b. Warlike action by a military force, including in establishing either the existence or the amount action in hindering or defending against an actual of loss under this covenant. or expected attack, by any government, sovereign or other authority using military personnel or other 3. INVENTORY SHORTAGES agents; or Loss, or that part of any loss, the proof of which as to c. Insurrection, rebellion, revolution, usurped power, its existence or amount is dependent upon: or action taken by governmental authority in hindering or defending against any of these. a. An inventory computation; or LMCIT MPCB(11-99)(Rev. 11-04) Page 1 of 5 SECTION III - LIMITS OF COVERAGE The most we will pay for loss is described in SECTION II,LIMITS OF COVERAGE, of the bond coverage form. SECTION IV - DEFINITIONS 1. Bond coverage form means the following b. Member of the city council; bond forms: c. Member of a city board, commission, or a. Bond - Employee Dishonesty Coverage Form committee which is not excluded by the definition MPCB 203; and of city; b. Bond - Employee Faithful Performance d. Elected or appointed official of the city; Coverage Form MPCB 204. e. Volunteer person or organization while acting 2. City means the governmental body or entity first on behalf of the city and subject to the city's named in the Declarations. For purposes of this direction and control; coverage, city includes relief associations. Unless specifically named in the Declarations, city shall f. Other authorized person or agent of the city not include: while acting on behalf of the city, but excludes independent contractors; a. Gas, electrical, or steam utilities commission; g. City relief association members, officers, and b. Port authority, housing and redevelopment employees; or authority, economic development authority, area or municipal redevelopment authority, or similar h. Any natural person employed by an agency; employment contractor while that person is subject to your direction and control and performing c. Municipal power agency; services for you, excluding, however, any such person while having care and custody of property d. Municipal gas agency; outside the premises. e. Hospital or nursing home board or But employee does not mean any agent, broker, commission; factor, commission merchant, consignee, independent contractor or representative of the f. Welfare or public relief agency; same general character. g. School board; 4. Joint powers entity means an operating entity created by two or more governmental units h. Airport commission; or entering into an agreement as provided by statute for the joint exercise of governmental powers. An i. Joint powers entity. intergovernmental agreement will be deemed to create a joint powers entity if the agreement 3. Employee means: establishes a board with the effective power to do any of the following, regardless of whether the a. A person whom you compensate directly by specific consent of the constituent governmental salary, wages or commissions and who you have units may also be required: the right to direct or control while performing duties for you; a. To receive and expend funds; LMCIT MPCB(11-99)(Rev. 11-04) Page 2 of 5 b. To enter into contracts; 8. Our means the League of Minnesota Cities Insurance Trust. c. To hire employees; 9. Property other than money and securities means d. To purchase or otherwise acquire and hold real any tangible property that has intrinsic value. or personal property; or 10. Securities means negotiable and nonnegotiable e. To sue or be sued. instruments or contracts representing either money or other property and includes: 5. LMCIT means the League of Minnesota Cities Insurance Trust. a. Tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused 6. Money means: value in a meter)in current use;and a. Currency, coins, and bank notes in current use b. Evidences of debt issued in connection with and having a face value; and credit or charge cards, which cards are not issued by you; b. Travelers checks, register checks and money orders held for sale to the public. but does not include money. 7. Occurrence means all loss caused by an employee, 11. Us means the League of Minnesota Cities whether the result of a single act or series of acts. Insurance Trust. The date of the occurrence is the date on which 12. We means the League of Minnesota Cities the single act is alleged to have taken place. If the Insurance Trust. loss or damages are alleged to have arisen from a series of acts, the date of occurrence is deemed to 13. You means the city shown in the Declarations. be the date when the first such wrongful act took place or is alleged to have taken place. 14. Your means th e city shown in the Declarations. SECTION V - CONDITIONS 1. CANCELLATION AS TO ANY The mailing of notice to you at the last mailing EMPLOYEE address known to us will be sufficient proof of notice. Delivery of notice is the same as mailing. We reserve the right to cancel the covenant as to any employee: 2. COVENANT PERIOD a. Immediately upon discovery by you or any official a. The covenant period is shown in the Declarations. or employee authorized to manage, govern or b. Subject to the loss sustained during prior insurance control your employee, of any act on the part of an Subject g p employee whether before or after becoming condition, we will pay only for loss that you employed by you which would constitute a loss sustain through acts committed or events occurring covered under the terms of this covenant. during the covenant period. b. On the date specified in a notice mailed to you. 3. DISCOVERY PERIOD FOR LOSS That date will be at least 30 days after the date of We will pay only for covered loss discovered no later mailing. than one year from the end of the covenant period. LMCIT MPCB(11-99)(Rev. 11-04) Page 3 of 5 4. DUTIES IN THE EVENT OF LOSS 8. LOSS COVERED UNDER THIS COVENANT AND PRIOR COVENANT After you discover a loss or a situation that may result ISSUED BY US in loss as provided by each bond coverage form that is designated in the Declarations,you must: If any loss is covered: a. Notify us as soon as possible. a. Partly by this covenant,and b. Submit to examination under oath at our request b. Partly by the prior canceled or terminated and give us a signed statement of your answers. covenant that we had issued to you or any predecessor in interest, the most we will pay is the c. Give us a detailed, sworn proof of loss within 120 larger of the amount recoverable under this days. covenant or the prior covenant. d. Cooperate with us in the investigation and 9. LOSS SUSTAINED DURING PRIOR settlement of any claim. INSURANCE 5. INDEPENDENT RIGHT OF RECOVERY a. If you or any predecessor in interest sustained loss during the period of any prior insurance that you We have an independent right of recovery against any or the predecessor in interest could have recovered employee for any loss due to the employee's under that insurance, except that the time within malfeasance, willful neglect of duty or bad faith. which to discover loss had expired,we will pay for 6. LEGAL ACTION AGAINST US it under this covenant provided: (1) This covenant became effective at the time of You may not bring any legal action against us cancellation or termination of the prior insurance, involving loss: and; a. Unless you have complied with all the terms of (2) The loss would have been covered by this this covenant; and covenant had it been in effect when the acts or events causing the loss were committed or b. Until 90 days after you have filed proof of loss occurred. with us; and b. The coverage under this condition is part of,not in c. Unless brought within 2 years from the date you addition to, the limits of coverage applying to this discover the loss. covenant and is limited to the lesser of the amount recoverable under: 7. LOSS COVERED UNDER MORE THAN ONE COVERAGE OF THIS COVENANT (1) This covenant as of its effective date; or If two or more coverages of this covenant apply to the (2) The prior insurance had it remained in effect. same loss, we will pay the lesser of: 10. NON-CUMULATION OF LIMIT OF a. The actual amount of loss; or COVERAGE b. The sum of the limits of coverage applicable to Regardless of the number of years this covenant that loss. remains in force or the number of premiums paid, no limit of coverage cumulates from year to year or period to period. LMCIT MPCB(11-99)(Rev. 11-04) Page 4 of 5 11. OTHER INSURANCE them in kind, in which event you must assign to us all your rights, title and interest in and to This covenant does not apply to loss recoverable or those securities; recovered under other insurance or indemnity. However, if the limit of the other insurance or (b) Pay the cost of any Lost Securities Bond indemnity is insufficient to cover the entire amount of required in connection with issuing duplicates the loss, this covenant will apply to that part of the of the securities. loss, other than that falling within any Deductible amount, not recoverable or recovered under the other However, we will be liable only for the insurance or indemnity. However, this covenant will payment of so much of the cost of the bond as not apply to the amount of loss that is more than the would be charged for a bond having a penalty applicable limit of coverage shown in the not exceeding the lesser of the: Declarations. i) Value of the securities at the close of 12. RECORDS business on the day the loss was discovered; or You must keep records of all money, securities, and property other than money and securities; and provide ii) Limit of coverage. any other reasonably obtainable information so we can verify the amount of any loss. (c) Loss of, or loss from damage to,property other than money and securities, or loss from 13. TERRITORY damage to the premises for not more than the: This covenant covers only acts committed or events i) Actual cash value of the property on y the day the loss was discovered; occurring within the United States of America, U.S. Virgin Islands, Puerto Rico, Canal Zone, or Canada and while temporarily outside this territory for a ii) Cost of repairing the property or period not more than 90 days. premises; or 14. VALUATION- SETTLEME N T iii) Cost of replacing the property with property of like kind and quality. a. Subject to the applicable limit of coverage provision, we will pay for: We may, at our option, pay the actual cash value of the property or repair or replace it. (1) Loss of money, but only up to and including its face value. We may, at our option, pay for loss If we cannot agree with you upon the actual cash of money issued by any country other than the value or the cost of repair or replacement, the United States of America: value or cost will be determined by arbitration. (a) At face value in the money issued by that b. We may, at our option, pay for loss of, or loss country; or from damage to,property other than money: (b) In the United States of America dollar (1) In the money of the country in which the loss equivalent determined by the rate of exchange occurred; or on the day the loss was discovered. (2) In the United States of America dollar (2) Loss of securities, but only up to and equivalent of the money of the country in which including their value at the close of business on the loss occurred determined by the rate of the day the loss was discovered, we may, at our exchange on the day the loss was discovered. option: c. Any property that we pay for or replace becomes (a) Pay the value of such securities or replace our property. LMCIT MPCB(11-99)(Rev. 11-04) Page 5 of 5 PROPERTY IN THE OPEN ENDORSEMENT This Endorsement modifies coverage provided under the Municipal Property Coverage. Loc. # Location Occupancy Property in the Open 18 CITY WIDE VARIOUS OUTDOOR SIRENS A. Section VII —DEFINITIONS property in the open is amended to read as described above for each location. All other terms and conditions remain unchanged. LMCIT MPCB-110(11-01)(Rev.1 1-02) LEAGUE OF MINNESOTA CITIES INSURANCE TRUST SCHEDULE OF COVERED MOBILE PROPERTY Covenant#: CMC 26394 MC League of Minnesota Cities CITY: OAK PARK HEIGHTS Cities promoting excenence J COVERAGE APPLIES TO MOBILE PROPERTY VALUED AT REPLACEMENT COST VALUES OF $25,000 OR LESS PER ITEM IF IDENTIFIED AS COVERED AND TO MOBILE PROPERTY THAT HAVE REPLACEMENT COST VALUES GREATER THAN $25,000 PER ITEM THAT ARE LISTED. COVERED/NOT COVERED A. MOBILE PROPERTY VALUED AT $25,000 OR LESS COVERED B. MOBILE PROPERTY VALUED AT GREATER THAN $25,000 Description of Mobile Property (Make, Model and Year) Serial No. 1 1995 CATERPILLAR XQ225 PORTABLE GENERATOR SET 8JJ00226 2 2000 CASE 621 WHEEL LOADER 112822 JEE0123895 3 2003 KUBOTA TRACTOR WITH PLOW 20224—TRACTOR 2029087 - HITCH 4 5 6 7 8 9 10 11 12 13 14 15 LMCIT PM-109(11/97)(Rev.11/02) Covenant Number: MUNICIPAL LIABILITY DECLARATIONS CMC 26394 Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST LMC (Herein called LMCIT) Item 1. CITY: OAK PARK HEIGHTS, CITY OF League of Minnesota Cities Cities yromofing excel%nce Item 2. COVERAGE PERIOD: From: 07/07/05 To: 07/07/06 12:01 A.M. Standard Time at Mailing Address on Common Coverage Declarations Item 3. THE COVERED PARTY IS: CITY Claims Made Item 4. COVERAGE PARTS: IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS COVENANT, LMCIT AGREES WITH THE COVERED PARTY TO PROVIDE THE COVERAGE AS STATED IN THIS COVENANT, SUBJECT TO THE FOLLOWING LIMITS: EACH OCCURRENCE LIMIT $ 1,000,000 PRODUCTS & COMPLETED OPERATIONS LIMIT $ 1,000,000 Annual Aggregate FAILURE TO SUPPLY CLAIM LIMIT $ 1,000,000 Annual Aggregate EMF CLAIM LIMIT $ 1,500,000 Annual Aggregate MOLD CLAIM LIMIT $ 1,500,000 Annual Aggregate FIRE DAMAGE LIMIT $ 50,000 Any One Fire MEDICAL AND RELATED EXPENSE LIMIT $ 1,000/$10,000 Any One Person/Occurrence LIMITED POLLUTION LIABILITY CLAIM *$ 1,000,000 Per Sudden Occurrence/ LIMIT $1,000,000 Annual Aggregate LEAD OR ASBESTOS CLAIM LIMIT *$ 200,000 Per Claim/$200,000 Annual Aggregate LAND USE,DEVELOPMENT OR FRANCHISE LITIGATION LIMIT **$ 1,000,000 Annual Aggregate *LIMIT includes damages, loss adjustment expense, defense costs and supplementary payments. **LIMIT includes litigation costs. Item s. MUNICIPAL LIABILITY DEDUCTIBLE: (Subject to General Annual Aggregate Deductible, if any, shown on Common Coverage Declarations) $ 500 Per Occurrence Item 6. RETROACTIVE DATES: MUNICIPAL LIABILITY RETROACTIVE DATE: 07/07/87 LIMITED POLLUTION LIABILITY CLAIM RETROACTIVE DATE: 05/24/88 LEAD OR ASBESTOS CLAIM RETROACTIVE DATE: 07/07/93 Item 7. ENDORSEMENTS ATTACHED TO THIS COVERAGE PART: CM C(11-04) M E066(11-02) M E073(11-01) M G L-1(01-95) LMCIT DEC-013(11/86)(Rev.11/03) M1 % COMPREHENSIVE MUNICIPAL COVERAGE Various provisions in this covenant restrict coverage. SECTION II- WHO IS COVERED. Read the entire coverage agreement carefully to determine rights, duties and what is and is not covered. Other words and phrases that appear in italics have special meaning, as given in SECTION IV - The words city and covered party are defined under DEFINITIONS. SECTION I - COVERAGES COVERAGE A. MUNICIPAL LIABILITY is alleged to have taken place. COVERAGE (CLAIMS MADE BASIS) (2) For any other claim for damages, the date of the 1. COVERAGE AGREEMENT occurrence is the date on which the wrongful act giving rise to the claim for damages took place or is a. Except as otherwise provided in this agreement, alleged to have taken place. If the damages are LMCIT will pay on behalf of the covered party all alleged to have arisen from a series of wrongful acts, sums which the covered party shall become legally the date of the occurrence is deemed to be the date obligated to pay as damages as a result of an when the first such wrongful act took place or is occurrence, if the following conditions are met: alleged to have taken place. (1) The claim for such damages must be first made If both (1) and (2) apply to claims for damages against the covered party during the coverage arising from a single occurrence, the date of the period; and occurrence is the earlier of the dates defined by (1) and(2),respectively. (2) The date of the occurrence giving rise to the claim for damages must be on or after the retroactive b. For any claim for damages, the date the claim is date,if any, shown in the Declarations; and made is deemed to be as follows: (3) The occurrence must have taken place in the (1) For any employment liability claim, the claim is coverage territory. deemed to have been made on the earliest of: b. LMCIT will have the right and duty to defend any (a) The date the claimant files a charge with the such claim or suit seeking damages. LMCIT may, at Federal Equal Employment Opportunity its discretion, investigate any actual or potential Commission, the Commissioner of the claim; and unless the city has given notice as Minnesota Department of Human Rights, or a provided in SECTION VI - CONDITIONS, 7., local Human Rights Commission as defined in LMCIT may settle any claim or suit. Minnesota Statute §363.01, subd. 23, whichever comes first; or c. The amount LMCIT will pay for damages is limited as described in SECTION III - LIMITS OF (b) The date when notice of claim for damages COVERAGE. is received by any covered party or by LMCIT, whichever comes first. 2. CLAIM AND OCCURRENCE DATES (2) For any other claim for damages, the claim is a. For any claim for damages, the date of the deemed to have been made when notice of such occurrence shall be deemed to be as follows: claim is received and recorded by any covered party or by LMCIT,whichever comes first. (1) For claims for bodily injury or property damage, the date of the occurrence is the date on which the (3) All claims for damages arising from a single bodily injury or property damage first took place or occurrence will be deemed to have been made at the LMCIT CMC(11-86)(Rev.11-04) Page 1 of 20 I time the first of those claims is made against any release or escape of pollutants: covered party. (1) At or from premises the city owns, rents, leases, 3. EXCLUSIONS uses, or occupies, and premises the city no longer owns,rents,leases,uses,or occupies; This coverage does not apply to: (2) At or from any landfill, dump, or other site or a. Damages for which the covered party is liable by location presently or formerly used by or for the city reason of the assumption of liability in a contract or or others for the handling, storage, disposal, agreement. This exclusion does not apply to liability processing or treatment of pollutants; for damages: (3) Which are or were at any time transported, (1) Assumed in a contract or agreement that is a handled, stored,treated, disposed of, or processed as covered contract; or waste by or for the city or any person or organization Y h' Y P for whom the city may be legally responsible; or (2) The covered party would have in the absence of the contract or agreement. (4) At or from any site or location on which the city or any contractors or subcontractors working directly b. Damages for which the covered party may be liable or indirectly on the city's behalf are or have been by reason of the Minnesota Civil Damages Act performing operations: (M.S. 340A.801-340A.802), or any other law governing liability for illegal sales of alcoholic (a) If the pollutants are brought on or to the site beverages. or location in connection with such operations; or c. Bodily injury to: (b) If the operations are to test for, monitor, (1) An employee of the city arising out of and in the clean up, remove, contain, treat, detoxify or course of employment by the city; or neutralize the pollutants. (2) Damages to the spouse, child, parent, brother or This exclusion does not apply to any of the sister of that employee as a consequence of (1) following: above. (1) Any limited pollution liability claim. This exclusion applies: (2) Any claim arising out of the discharge or (1) Whether the city may be liable as an employer or dispersal of mace, tear gas or similar agent, if such in any other capacity; and discharge was for the purpose of protecting persons or property or incident to an arrest. (2) To any obligation to share damages with or repay someone else who must pay damages because (3) Any lead claim or asbestos claim, unless the of the injury. actual, alleged, or threatened discharge, dispersal, release, escape, use, distribution, or handling of lead This exclusion does not apply to liability assumed or asbestos took place at or from any landfill, dump, by the covered party under a covered contract. or other site or location presently or formerly used by or for the city or others for the handling, storage, d. Any loss, cost, or expense arising out of any disposal,processing or treatment of pollutants. direction demand, or request by the government or any other entity that the city or any other entity test (4) Any damages arising out of heat, smoke, or for, monitor, clean up, remove, contain, treat, fumes from a hostile fire. A hostile fire is a fire detoxify or neutralize pollutants; or which becomes uncontrollable or breaks out from where it was intended to be. Damages arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, (5)Any damages included in the products-completed LMCIT CMC(11-86)(Rev.11-04) Page 2 of 20 operations hazard. This exclusion does not apply to property damage by fire to premises rented to the city. A separate e. Damages arising out of the ownership, maintenance, limit of coverage applies to this coverage as use or entrustment to others of any aircraft, auto or described in SECTION III - LIMITS OF watercraft owned or operated by or rented or loaned COVERAGE. to any covered party. Use includes operation and loading or unloading. h. Damages claimed for any loss, cost or expense incurred by the city or others for the loss of use, This exclusion does not apply to: withdrawal, recall, inspection, repair, replacement, adjustment,removal or disposal of: (1) A watercraft while ashore on premises the city owns or rents; (1) Your product; (2) A watercraft that is: (2) Your work; or (a) Less than 26 feet long; and (3) Impaired property; (b) Not being used to carry persons or property if such product, work, or property is withdrawn or for a charge; recalled from the market or from use by any person or organization because of a known or suspected (3) Parking an auto on, or on the ways next to, defect, deficiency, inadequacy or dangerous premises the city owns or rents, provided the auto is condition in it. not owned by or rented or loaned to the covered party. i. Bodily injury to any volunteer while acting on behalf of the city if the volunteer is an employee within the f. Damages due to war,whether or not declared, or any meaning of a workers' compensation law or similar act or condition incident to war. War includes civil law, or is covered under a voluntary endorsement to war, insurrection,rebellion or revolution. a workers' compensation insurance policy. g. Property damage to: j. Damages for bodily injury, property damage or personal injury arising out of the city's ownership, (1) Property the city owns,rents,or occupies; operation or maintenance of any airport. (2) Premises the city sells, gives away or abandons, k. Damages for bodily injury, property damage, or if the property damage arises out of any part of those personal injury arising out of the city's ownership, premises; operation or maintenance of any: (3) That particular part of real property on which the (1) Medical clinic; city or any contractors or subcontractors working directly or indirectly on the city's behalf are (2) Licensed hospital, boarding care home, performing operations, if the property damage arises outpatient surgical center, or supervised living out of those operations; or facility; (4) Work performed by or on behalf of the city (3) Licensed psychiatric hospital; arising out of your work or any portion thereof, or out of materials, parts or equipment furnished in (4) Mental health clinic; connection therewith. (5) Licensed nursing home or home care providers; (5) Your product arising out of it or any part of it. or Paragraphs (3) and (4) of this exclusion do not apply (6) Registered housing with services establishments. to liability assumed under a sidetrack agreement. 1. Damages arising out of the rendering of or failure to LMCIT CMC(11-86)(Rev.11-04) Page 3 of20 render professional services by any professional (4) Fireworks displays or exhibitions. listed below: o. Damages arising from or relating to the detention or (1) Attorney, unless the attorney is an employee of confinement of any person(s)in any jail, holding cell the city and not an independent contractor, and the or similar detention facility, which the city owns, professional services are within the scope of the operates or maintains, if the date of the occurrence attorney's duties as a city employee, including causing such damages takes place after a continuous professional services performed for any of the city's detention or confinement period of 30 days, or in boards, commissions, authorities or agencies, or any detention facility which is intended and joint powers entities in which the city participates. regularly used for confinement of persons for periods in excess of 30 days. (2) Architect. p. Damages arising out of the activities of any of the (3) Doctor of medicine. following city boards, commissions, or agencies: (4) Dentist. (1) Gas, electrical or steam utilities commission; (5) Nurse, except that this exclusion shall not apply (2) Port authority, housing and redevelopment to: authority, economic development authority, area or municipal redevelopment authority, or similar (a) Claims arising from the nurse's activities in agency; the capacity of an emergency medical technician,paramedic or first responder; or (3) Municipal power agency; or (b) Claims arising from the nurse's activities in (4) Municipal gas agency, administering vaccinations or immunizations to city employees or volunteers. unless such board, commission, authority, or agency is named in the Declarations, in which case the city (6) Pharmacist. will also be covered to the extent of coverage provided under this covenant to the named board, (7) Psychologist. commission, authority or agency for damages arising out of the activities of the respective named m. Damages arising out of the failure or bursting of board, commission, authority or agency. any: q. Damages arising out of the activities of a joint (1) Class I or Class II dam as classified by the powers entity in which the city is a member unless Commissioner of the Depaituient of Natural the joint powers entity is named in the Declarations. Resources pursuant to Minnesota Rules §6115.0340; or r. Damages arising out of condemnation, inverse condemnation, adverse possession, or dedication by (2) Any dike, levee or similar structure. adverse use. This exclusion does not apply to any claim for taking of property wherein the taking of n. Damages arising out of the city's ownership, property is incident to an arrest or for the purpose of sponsorship or operation of: protecting persons or property in an emergency. (1) Motorized amusement devices, if the power s. Any criminal proceedings or proceedings under the supply motor is rated at greater than 5 horsepower; open meeting law against any covered party. (2) Any mobile equipment, automobile, snowmobile t. Damages with respect to any claim(s) made by or motorcycle in any racing, pulling, pushing, speed, LMCIT or the city against any other covered party. or demolition contest or in any stunting activity; u. Any claim for damages asserted in any land use, (3) Rodeos; or development or franchise litigation. LMCIT CMC(11-86)(Rev.11-04) Page 4 of 20 COVERAGE B.MEDICAL AND RELATED i. For any injury for which the injured party has EXPENSE received or is entitled to receive workers' compensation benefits. 1. COVERAGE AGREEMENT The exclusions of the MUNICIPAL LIABILITY a. LMCIT will pay to or for each person who sustains COVERAGE PART (COVERAGE A) also apply to this bodily injury caused by accident all reasonable Coverage Part as respects bodily injury. medical and related expense incurred within one year from the date of the accident as a result of such 3. ADDITIONAL DEFINITIONS bodily injury, provided such bodily injury arises out of a condition in the covered premises. When used herein: b. The amount LMCIT will pay for medical and related Covered premises means all premises owned or rented to expense is limited as described in SECTION III - the city with respect to which the city is afforded LIMITS OF COVERAGE. coverage for bodily injury liability under this covenant, and includes the ways immediately adjoining on land; 2. EXCLUSIONS however, covered premises does not include streets, sidewalks, or boulevards that do not abut a city owned LMCIT will not pay expenses for bodily injury: building or city owned parking lot. a. Arising out of the operation or use of any Medical and related expense means expenses for snowmobile or trailer designed for use therewith; necessary medical, surgical, x-ray and dental services, including prosthetic devices, necessary ambulance, b. Included within the products-completed operations hospital, professional nursing and funeral services, and hazard; replacement or repair of damaged eye glasses or clothing. c. Arising out of operations performed for the city by an independent contractor other than: 4. ADDITIONAL CONDITION MEDICAL REPORTS; PROOF AND PAYMENT OF (1) Maintenance and repair of the covered premises; CLAIM or As soon as practicable, the injured person or someone on (2) Structural alterations at such premises which do his behalf shall give to LMCIT written proof of claim, not involve changing the size of or moving buildings under oath if required, and shall, after each request from or other structures; LMCIT, execute authorization to enable LMCIT to obtain medical reports and copies of records. The injured d. To any tenant or other person regularly residing on person shall submit to physical examination by the covered premises; physicians selected by LMCIT when and as often as LMCIT may reasonably require. LMCIT may pay the e. To any other tenant if the bodily injury occurs on injured person or any person or organization rendering that part of the covered premises rented from the the services, and the payment shall reduce the amount city; payable hereunder for such injury. Payment hereunder shall not constitute an admission of liability of any f. To any person while engaged in maintenance and covered party or of LMCIT. repair of the covered premises or alteration, demolition or new construction at such premises; COVERAGE C. AUTOMOBILE LIABILITY- BODILY INJURY AND PROPERTY DAMAGE g. To any person practicing, instructing or participating in any physical training, sport, athletic activity or 1. COVERAGE AGREEMENT contest whether on a formal or informal basis; LMCIT will pay on behalf of the covered party all sums h. To a member or guest of any club, tourist court or trailer park operated or owned by the city; or which the covered party shall become legally obligated LMCIT CMC(11-86)(Rev. 11-04) Page 5 of 20 to pay as damages because of bodily injury or property d. Bodily injury due to war, whether or not declared, damage to which this coverage applies, caused by an civil war, insurrection, rebellion or revolution or to occurrence and arising out of the ownership, any act or condition incident to any of the foregoing; maintenance or use, including loading or unloading, of any automobile. This coverage applies only to bodily e. Any loss, cost, or expense arising out of any injury or property damage which occurs during the direction, demand, or request by the government or coverage period and within the covered territory. any other entity that the city or any other entity test for, monitor, clean up, remove, contain, treat, LMCIT will have the right and duty to defend any suit detoxify or neutralize pollutants; or seeking those damages.However: Damages arising out of the actual, alleged or a. The amount LMCIT will pay for damages is limited threatened discharge, dispersal, seepage, migration, as described in SECTION III - LIMITS OF release or escape of pollutants: COVERAGE. (1) At or from premises the city owns, rents, leases, b. LMCIT may, at its discretion, investigate any uses, or occupies, and premises the city no longer occurrence and settle any claim or suit that may owns,rents,leases,uses, or occupies; result. (2) At or from any landfill, dump, or other site or 2. EXCLUSIONS location presently or formerly used by or for the city or others for the handling, storage, disposal, This coverage does not apply to: processing or treatment of pollutants; a. Any obligation for which the covered party or any (3) Which are or were at any time transported, carrier as his insurer may be held liable under any handled, stored, treated, disposed of, or processed as workers' compensation, unemployment waste by or for the city or any person or organization compensation or disability benefits law, or under any for whom the city may be legally responsible; or similar law. (4) At or from any site or location on which the city b. Any liability the city may have for bodily injury to: or any contractors or subcontractors working directly or indirectly on the city's behalf are or have been (1) An employee of the city arising out of and in the performing operations; course of employment by the city; or (a) If the pollutants are brought on or to the site (2) Damages to the spouse, child, parent, brother or or location in connection with such operations; sister of that employee as a consequence of (1) or above. (b) If the operations are to test for, monitor, This exclusion applies: clean up, remove, contain, treat, detoxify or neutralize the pollutants. (1) Whether the city may be liable as an employer or in any other capacity; and This exclusion does not apply to any of the following: (2) To any obligation to share damages with or repay someone else who must pay damages because (1) Any limited pollution liability claim. of the injury. (2) Any claim arising out of the discharge or This exclusion does not apply to liability assumed dispersal of mace, tear gas or similar agent, if such by the covered party under a covered contract. discharge was for the purpose of protecting persons or property or incident to an arrest. c. Property damage to property owned by the covered party. (3) Any lead or asbestos claim unless the actual, alleged, or threatened discharge, dispersal, release, LMCIT CMC(11-86)(Rev.11-04) Page 6 of 20 escape, use, distribution, or handling of lead or b. 50% of any necessary legal fees for counsel to asbestos took place at or from any landfill, dump, or represent the city which the city incurs prior to other site or location presently or formerly used by reporting the litigation to LMCIT. or for the city or others for the handling, storage, disposal, processing or treatment of pollutants. This coverage shall not apply to any land use, development or franchise litigation which is first (4) Any damages arising out of heat, smoke, or reported to LMCIT more than one year after the date on fumes from a hostile fire. A hostile fire is a fire which the litigation was first filed or served by or against which becomes uncontrollable or breaks out from the city or a city officer or employee. where it was intended to be. The amount LMCIT will pay for litigation costs for land f. Liability assumed under any contract or agreement, use, development or franchise litigation covered under but this exclusion does not apply to liability assumed this section is limited as described in SECTION III - under a covered contract. LIMITS OF COVERAGE. 3. ADDITIONAL DEFINITIONS The amount LMCIT pays for litigation costs for land use, development or franchise litigation is subject to the These additional definitions apply for purposes of Municipal Liability Deductible shown in the Municipal COVERAGE C: Liability Declarations or the General Annual Aggregate Deductible, if any, shown in the Common Coverage Automobile business means the business or occupation Declarations. of selling, repairing, servicing, storing or parking automobiles. 2. LITIGATION MANAGEMENT Hired automobile means an automobile not owned by For any land use, development or franchise litigation, the city which is used under contract on behalf of, or legal counsel will be selected by mutual agreement of loaned to,the city. the city and LMCIT. Owned automobile means an automobile owned by the If LMCIT and the city are not able to agree on selection city. of counsel, LMCIT will provide a list of five attorneys experienced in land use, development or franchise Trailer includes semi-trailer but does not include mobile litigation matters; and the city will select legal counsel equipment. from that list. COVERAGE D.LAND USE,DEVELOPMENT A land use, development or franchise litigation suit may OR FRANCHISE LITIGATION not be settled without the approval of both LMCIT and the city. 1. COVERAGE AGREEMENT 3. ADDITIONAL DEFINITIONS Except as provided below, for any land use, development or franchise litigation which is first filed or served by or This additional definition applies for the purpose of against the city or a city officer or employee during the COVERAGE D. annual coverage period of this agreement, LMCIT will pay the following on the city's behalf: Litigation costs means: a. 100% of the first $25,000 of litigation costs which a. Legal fees for counsel appointed pursuant to 2. are incurred after the litigation has been reported to LITIGATION MANAGEMENT,above; LMCIT; 85% of the next$225,000 of litigation costs incurred after the litigation has been reported to b. Necessary legal fees for counsel to represent the city LMCIT; and 60% of any litigation costs in excess of which the city incurs prior to reporting the litigation $250,000 which are incurred after the litigation has to LMCIT; been reported to LMCIT; and c. Necessary litigation expenses other than legal fees; LMCIT CMC(11-86)(Rev. 11-04) Page 7 of 20 d. Damages which the city is required to pay; and a. Legal counsel will be selected as provided above, but LMCIT will not otherwise participate in the e. Supplementary payments made or incurred as management of the litigation. defined in SECTION V - SUPPLEMENTARY PAYMENTS. b. Any settlement of the litigation involving a payment of damages must be approved by LMCIT. 4. SPECIAL PROVISIONS - INTER-CITY LITIGATION c. The percentage LMCIT will pay of any litigation costs will be one-half of the percentages specified in The following special provisions shall apply only to COVERAGE D. 1. COVERAGE AGREEMENT. coverage for any land use, development or franchise litigation in which: 1) An opposing litigant is also a d. LMCITs total liability to the city for litigation costs member of the LMCIT property/casualty program; and for the litigation shall not exceed $500,000. This 2) The litigation is also a covered claim for the opposing does not increase the annual aggregate limit as litigant under COVERAGE D of the opposing litigant's described in SECTION III - LIMITS OF LMCIT municipal liability coverage: COVERAGE, 11. SECTION II - WHO IS COVERED 1. City means the city or other governmental body or (2) Member of a city board, commission, or entity first named in the Declarations. Unless committee which is not excluded by the specifically named in the Declarations, city shall not definition of city; include any of the following: (3) Elected or appointed official of the city; a. Gas, electrical or steam utilities commission; (4) Employee of the city; b. Port authority, housing and redevelopment authority, economic development authority, area or (5) Volunteer person or organization while municipal redevelopment authority or similar acting on behalf of the city and subject to the agency; city's direction and control; c. Municipal power agency; (6) Other authorized person or agent of the city while acting on behalf of the city, but excluding d. Municipal gas agency; independent contractors; e. Welfare or public relief agency; (7) City relief association and its members, officers,and employees; or f. School board; or (8) Person while acting in the administrative g. Joint powers entity. capacity of medical director or medical advisor to the city ambulance service. 2. For purposes of COVERAGE A and COVERAGE D, covered party means: c. With respect to a joint powers entity named in the Declarations: a. The city, and any other entity named in the Declarations; (1) The joint powers entity; b. For actions within his duties as such, any present (2) While acting on behalf of the joint powers or former: entity, or with respect to liability arising out of the activities of the joint powers entity, any (1) Member of the city council; present or former: LMCIT CMC(II-86)(Rev. 11-04) Page 8 of 20 (a) Governmental member of the joint d. Any person while using an owned automobile or powers entity; hired automobile only while such automobile is or was used with the city's permission. (b) Elected or appointed official of the governmental member; e. Any other person or organization but only with respect to his or its liability because of acts or (c) Employee of the governmental member; omissions of a covered party under a., b., c. or d. or above. (d) Other authorized person or agent of the For purposes of COVERAGE C, none of the governmental member, but excluding following is a covered party: independent contractors. a. Any person or organization from whom a 3. For purposes of COVERAGE C, covered party covered party hires or borrows an automobile that is means: not a trailer. a. The city, and any other entity named in the b. Any person while employed in or otherwise Declarations with respect to any automobile; engaged in duties in connection with an automobile business, other than an automobile business operated b. Any present or former elected or appointed by the city. official, employee or volunteer of the city with respect to any automobile while such automobile is c. Any person while loading or unloading an or was being used in the business of the city; automobile, other than: c. Any person or organization from whom a (1) A city officer, employee, or volunteer; or covered party hires or borrows a trailer which is connected to an owned automobile; (2) A lessee or borrower of an owned automobile or their employees. SECTION III - LIMITS OF COVERAGE 1. The Limits of Coverage shown in the Declarations damages under each Coverage Part in excess of the and the rules below fix the most LMCIT will pay as Municipal Liability Deductible shown in the damages under each coverage part regardless of the Municipal Liability Declarations or the General number of: Annual Aggregate Deductible, if any, shown in the Common Coverage Declarations, and the Limits of a. Covered parties; Coverage will be reduced by the Deductible amount. b. Claims made or suits brought; or 4. The Products-Completed Operations Annual Aggregate Limit is the most LMCIT will pay under c. Persons or organizations making claims or COVERAGE A for damages included in the bringing suits. products-completed operations hazard. 2. LMCITs maximum limit of liability for 5. The Fire Damage Limit is the most LMCIT will pay COVERAGES A and C combined shall be the per under COVERAGE A for damages because of occurrence or sudden occurrence limit shown in the property damage to premises rented to the city Declarations whether the claim or claims fall under arising out of any one fire. COVERAGE A, COVERAGE C, or both. 6. The Medical and Related Expense Limit is the most 3. The Limits of Coverage shown in the Declarations, LMCIT will pay under COVERAGE B for all except as otherwise described, apply only to the medical expenses because of bodily injury sustained LMCIT CMC(11-86)(Rev. 11-04) Page 9 of 20 by any one person, and the occurrence limit is the 11. LMCIT's total liability for litigation costs, as defined most LMCIT will pay under COVERAGE B for all in SECTION I - COVERAGE D, LAND USE, medical expenses because of bodily injury to two or DEVELOPMENT OR FRANCHISE LITIGATION, more persons resulting from one occurrence. for all land use, development or franchise litigation which is first filed or served against the city during 7. The Limited Pollution Liability Claim Annual the annual coverage period of this agreement shall Aggregate Limit is the most LMCIT will pay for not exceed $1,000,000, regardless of the number of limited pollution liability claims during the annual suits, defendants,or claimants. coverage period. The Limited Pollution Liability Claim Annual Aggregate Limit applies to the sum of 12. The Mold Claim Annual Aggregate Limit is the damages and loss adjustment expense, including most LMCIT will pay for damages for mold claims defense costs and supplementary payments as during the annual coverage period. defined in SECTION V - SUPPLEMENTARY PAYMENTS. 13. LMCIT shall not be obligated under this covenant to pay any claim or judgment or to defend any suit after 8. The Lead or Asbestos Claim Annual Aggregate the applicable limit of LMCITs coverage has been Limit is the most LMCIT will pay for all lead claims exhausted or by tender to any excess carrier or or asbestos claims during the annual coverage excess coverage including excess coverage provided period. The Lead or Asbestos Claim Annual by LMCIT. Aggregate Limit applies to the sum of damages, loss adjustment expense, defense costs, and 14. For any Annual Aggregate Limit shown in the supplementary payments as defined in SECTION V Declarations, the limit shall apply separately to each -SUPPLEMENTARY PAYMENTS. consecutive annual period and to any remaining period of less than 12 months, starting with the 9. The Failure to Supply Claim Annual Aggregate beginning of the coverage period shown in the Limit is the most LMCIT will pay for damages for Declarations, unless the coverage period is extended failure to supply claims during the annual coverage after issuance for an additional period of less than 12 period. months. In that case, the additional period will be deemed part of the last preceding period for 10. The EMF Claim Annual Aggregate Limit is the most purposes of determining the limits of coverage. LMCIT will pay for damages for EMF claims during the annual coverage period. SECTION IV - DEFINITIONS 1. Advertisement means a notice that is broadcast or a. The use of, sale of, installation of, removal of, published to the general public or specific market abatement of, distribution of, containment of, or segments about the city's goods,products or services exposure to asbestos, asbestos products, asbestos- for the purpose of attracting customers or supporters. containing material, asbestos fibers, or asbestos dust; 2. Aircraft means any aircraft, including engines, b. The actual or threatened abatement, mitigation, propellers, operating and navigating instruments and removal or disposal of asbestos, asbestos products, radio equipment attached to or usually attached to or asbestos-containing material, asbestos fibers, or Y g carried on the aircraft, including component parts asbestos dust; detached and not replaced by other similar parts and tools therein which are standard for the make and c. Any supervision, instructions,recommendations, type of aircraft. warnings or advice given or which should have been given in connection with subparagraphs a. and b. 3. Asbestos claim means damages arising directly or above; or indirectly out of, resulting from, caused by or contributed to by: d. Any obligation of the covered party to indemnify an y p a rty in connection with th LMCIT CMC(11-86)(Rev.11-04) Page 10 of 20 • subparagraphs a.,b. or c. above. a. That indemnifies an architect, engineer or surveyor for injury or damages arising out of: 4. Automobile (auto) means a land motor vehicle, trailer or semi-trailer designed for travel on public (1) Preparing, approving or failing to prepare or roads, including any attached machinery or approve maps, drawings, opinions, reports, equipment. But automobile does not include mobile surveys, change orders, designs or equipment. specifications; or 5. Bodily injury means bodily injury, sickness or (2) Giving directions or instructions, or failing disease sustained by a person, including death to give the same, if that is the primary cause of resulting from any of these at any time. the injury or damages; 6. Coverage territory means: b. Under which the city's architect, engineer or surveyor assumes liability for injury or damages a. The United States of America (including its arising out of the city's rendering or failing to render territories and possessions), Puerto Rico and professional services, including those listed in a. Canada; above, and supervisory, inspection or engineering services; or b. International waters or airspace, provided the injury or damages do not occur in the course of c. That indemnifies any person or organization for travel or transportation to or from any place not damages by fire to premises rented or loaned to the included in a. above; or city. c. All parts of the world if: 8. Damages means money damages, and includes awards for attorneys' fees with respect to suits (1) The injury or damage arises out of: alleging violations under federal civil rights laws, state human rights laws or the federal or state (a) Goods or products made or sold by the constitution. city in the territory described in a. above; or With respect to any land use, development or (b) The activities of a person whose home is franchise litigation, damages also includes amounts in the territory described in a. above, but is the city is obligated to pay for loss of use of property away for a short time on the city's business; during the time prior to a final determination by the and court that enforcement of a land use, zoning, subdivision, or similar ordinance or regulation (2) The covered party's responsibility to pay constitutes a taking of private property. damages is determined in a suit on the merits, in the territory described in a. above or in a Damages does not include any of the following: settlement LMCIT agrees to. a. Any obligation of a covered party under a 7. Covered contract means an indemnification of a workers' compensation, disability benefits, or municipality as required by ordinance, or that part of unemployment compensation law or any similar law. any contract or agreement pertaining to the city's business under which the city assumes the tort b. Exemplary damages or punitive damages except liability of another to pay damages to a third person punitive damages claimed or levied against an or organization, if the contract or agreement is made officer, employee or volunteer of the city, provided prior to the date of the occurrence giving rise to the that the officer, employee or volunteer: damages. Tort liability means a liability that would be imposed by law in the absence of any contract or (1) Was acting in the performance of the duties agreement. of the position; and Covered contract does not include that part of any (2) Was not guilty of malfeasance in office, contract or agreement: willful neglect of duty, or bad faith. LMCIT CMC(11-86)(Rev. 11-04) Page 11 of 20 c. Fines or penalties imposed by law. (I) The repair, replacement, adjustment or removal of your product or your work; or d. Injunctive or equitable relief, or quasi- judicial or administrative orders. (2) The city's fulfilling the terms of the contract or agreement. e. Repayment of any tax, assessment, fee, or other charge that was wrongfully obtained, or any interest 13. Joint powers entity means an operating entity on, or any other amount claimed for loss of use of, created by two or more governmental units entering such tax, assessment, fee, or other charge. into an agreement as provided by statute for the joint exercise of governmental powers. An f. Amounts paid or payable for the purchase or intergovernmental agreement will be deemed to permanent acquisition of property or property rights, create a joint powers entity if the agreement or for the right to permanently enforce an ordinance, establishes a board with the effective power to do regulation, or restriction on the use of property. any of the following, regardless of whether the specific consent of the constituent governmental g. Amounts due under the terms of any contractual units may also be required: obligation, except for liability: a. To receive and expend funds; (1) Assumed in a covered contract; or b. To enter contracts; (2) Assumed in an employment contract between the city and its employees. c. To hire employees; h. Any wages and employment benefits for work d. To purchase or otherwise acquire and hold real that has been performed by the employee making the or personal property; or claim, or any claimed increases in such wages and employment benefits for work that is hereafter e. To sue or be sued. performed by the employee making the claim. 14.Land use, development or franchise litigation means: 9. EMF claim means any claim for damages arising out of the actual or alleged exposure to electromagnetic a. Any litigation relating to the application or fields, electromagnetic radiation or stray voltage. interpretation of a city's land use, zoning, subdivision,or similar ordinance or regulation; or 10. Failure to supply claim means any claim for damages arising out of the complete or partial failure b. Any litigation relating to the city's involvement to supply water, electricity, gas or steam. in the financing or approval of any development or redevelopment project. 11. Fungus(es) includes, but is not limited to, any form or type of mold,mushroom or mildew. c. Any litigation relating to the granting, refusal, interpretation, or enforcement of any franchise, 12. Impaired property means tangible property, other ordinance, permit, license, or other mechanism than your product or your work, that cannot be used through which the city authorizes or regulates the or is less useful because: provision of cable communications, electricity, gas, heat, telephone, or other public utilities within the a. It incorporates your product or your work that is city. known or thought to be defective, deficient, inadequate or dangerous; or Any litigation meeting the criteria listed above will be considered to be land use, development or b. The city has failed to fulfill the terms of a franchise litigation in its entirety, regardless of contract or agreement; whether the litigation may assert other claims as well. if such property can be restored to use by: But land use, development or franchise litigation LMCIT CMC(1 1-86)(Rev.11-04) Page 12 of 20 does not include litigation: this covenant, and which: a. That seeks only compensation or other relief for (1) Was caused by an actual, alleged, or an actual or alleged physical occupation, invasion, or threatened discharge, dispersal, release, or use of property by the city; escape of pollutants; or b. That seeks only a reduction or invalidation of a (2) Arises from the accidental rupture, backup, special assessment; or overflow of the city's sanitary sewer , storm sewer, or water supply systems. c. That seeks only compensation for damages based on the city's actual or alleged negligent 17. LMCIT means the League of Minnesota Cities inspection or enforcement of the state building, Insurance Trust. plumbing, electrical, fire, or similar codes; 18. Loading or unloading means the handling of d. That seeks only amounts due under contract, property: including any city bonds or other obligation; or a. After it is moved from the place where it is e. That was initiated by the city to enforce a accepted for movement into or onto an aircraft, building, zoning, subdivision, or similar ordinance watercraft or auto; or regulation related to the use of property, unless that litigation also involves a challenge to the b. While it is in or on an aircraft, watercraft or constitutionality of the ordinance or regulation or to auto; or the legal authority of the city to enact it. c. While it is being moved from an aircraft, 15. Lead claim means damages arising directly or watercraft or auto to the place where it is finally indirectly out of, resulting from, caused by or delivered; but loading or unloading does not include contributed to by: the movement of property by means of a mechanical device, other than a hand truck, that is not attached a. The toxic or pathological properties of lead, lead to the aircraft, watercraft or auto. compounds or lead contained in any materials; 19. Mobile equipment means any of the following types b. The actual or threatened abatement, mitigation, of land vehicles, including any attached machinery removal or disposal of lead, lead compounds or or equipment: materials containing lead; a. Bulldozers, farm machinery, forklifts and other c. Any supervision, instructions,recommendations, vehicles designed for use principally off public warnings or advice given or which should have been roads; given in connection with subparagraphs a. or b. above; or b. Vehicles that travel on crawler treads; d. Any obligation of the covered party to c. Vehicles, whether self-propelled or not, indemnify any party in connection with maintained primarily to provide mobility to subparagraphs a.,b. or c. above. permanently mounted: 16. Limited pollution liability claim means any claim for (1) Power cranes, shovels, loaders, diggers or damages: drills; or a. Arising out of pesticide or herbicide application (2) Road construction or resurfacing equipment operations; or such as graders, scrapers or rollers; b. Which resulted from a sudden occurrence which d. Vehicles not described in a., b., or c. above that took place on or after the retroactive date shown in are not self-propelled and are maintained primarily the Declarations and prior to the expiration date of to provide mobility to permanently attached LMCIT CMC(1 1-86)(Rev. 11-04) Page 13 of 20 equipment of the following types: substantially the same general harmful condition. (1) Air compressors, pumps and generators, Provided that for purposes of SECTION III - including spraying, welding, building cleaning, LIMITS OF COVERAGE, occurrence shall be geophysical exploration, lighting and given the same meaning as given in the applicable well-servicing equipment; or statute establishing monetary limits on the city's tort liability. (2) Cherry pickers and similar devices used to raise or lower workers; 22. Personal injury means injury other than bodily injury, arising out of one or more of the following e. Vehicles not described in a., b., or c. above offenses: maintained primarily for purposes other than the transportation of persons or cargo. a. False arrest, detention, or imprisonment, or malicious prosecution. 20. Mold claim means any claim for damages arising directly or indirectly out of, resulting from, caused b. The publication or utterance of a libel or slander by, or contributed to by: or other defamatory or disparaging material, or a publication or utterance in violation of an a. Any fungus(es) or spore(s); individual's right of privacy. b. Any solid, liquid, vapor, or gas produced by or c. Wrongful entry or eviction, or other invasion of arising out of any fungus(es) or spore(s); the right of private occupancy. c. Any material, product, building component, or d. Assault or battery committed for the purpose of building structure that contains, harbors, nurtures or protecting persons or property or incident to an acts as a medium for any fungus(es) or spore(s); arrest. d. Any intrusion, leakage, or accumulation of water e. The use of another's advertising idea in your or any other liquid that contains,harbors,nurtures or advertisement. acts as a medium for fungus(es)or spore(s); f. Infringing upon another's copyright, trade dress e. The actual or threatened abatement, mitigation, or slogan in your advertisement. removal or disposal of fungus(es) or spore(s) or any material, product, building component, or building 23. Pollutants means any solid, liquid, gaseous or structure that contains, harbors, nurtures or acts as a thermal irritant or contaminant, including smoke, medium for any fungus(es) or spore(s); vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, f. Any supervision,instructions,recommendations, reconditioned or reclaimed. warnings or advice given or which should have been given in connection with subparagraphs a., b., c., d., 24. Products-completed operations hazard includes all or e. above; or damages: g. Any obligation of the covered party to a. Which arise out of your product; or indemnify any party in connection with subparagraphs a.,b., c., d.,e., or f. above. b. Which arise out of your work and occur away from the premises the city owns or rents. 21. Occurrence means: Your work will be deemed completed at the earliest a. With respect to COVERAGE A, a wrongful act of the following times: or a series of related wrongful acts. a. When all of the work called for in the city's b. With respect to COVERAGE C, an accident, contract has been completed. including continuous or repeated exposure to LMCIT CMC(11-86)(Rev.11-04) Page 14 of 20 b. When all of the work to be done at the site has a. Physical injury to tangible property, including all been completed if the city's contract calls for work at resulting loss of use of that property; or more than one site. b. Loss of use of tangible property that is not c. When that part of the work done at a job site had physically injured. been put to its intended use by any person or organization other than another contractor or 26. Spore(s) include any reproductive body produced by subcontractor working on the same project. or arising out of any fungus(es). Work that may need service, maintenance, 27. Sudden occurrence means an accident or a related correction, repair or replacement, but which is series of accidents and the release of pollutants otherwise complete,will be treated as completed. resulting therefrom, all of which begin and end within 72 hours; except that each incident in which Except that the products-completed operations the city's sanitary sewer backs up into a building is hazard does not include any of the following: deemed to be a separate sudden occurrence. In the case of a related series of accidents, the sudden a. Damages which arise from products that are still occurrence will be deemed to have taken place when in the city's physical possession; the first accident in the related series of such accidents took place. b. Damages which arise from work that has not been completed or abandoned; 28. Suit means a civil proceeding in which damages to which this coverage a lies are alleged. Suit applies g c. Damages which arise out of the actual, alleged, or includes an arbitration proceeding alleging such threatened discharge, dispersal, seepage, migration, damages to which the city must submit or submit release or escape of pollutants at or from any with LMCITs consent. Suit does not mean any landfill, dump, or other site or location presently or criminal proceeding against any covered party or formerly used by or for the city or others for the any open meeting law proceeding, unless damages handling, storage, disposal, processing, or treatment are also alleged in that proceeding. A charge of of pollutants; employment discrimination filed with the Federal Equal Employment Opportunity Commission, the d. Damages which arise out of the actual, alleged, or Commissioner of the Minnesota Department of threatened discharge, dispersal, seepage, migration, Human Rights, or a local human rights commission release or escape of pollutants which are or were at as defined in Minnesota Statute §363.01, subd. 23, any time transported, handled, stored, treated, shall be deemed to be a suit alleging damages. disposed of, or processed as waste by or for the city or any person or organization for whom the city may 29. Wrongful act means any actual or alleged error, be legally responsible; statement, act, omission, offense, neglect, accident, or violation. Violation includes violation of any e. Damages which arise out of the actual, alleged, or rights, immunities, or privileges secured by the threatened discharge, dispersal, seepage, migration, Constitution and Laws of the United States of release or escape of pollutants at or from any site or America. location on which the city or any contractor or subcontractors working directly or indirectly on the 30. Your product means: city's behalf are or have been performing operations if the operations are to test for, monitor, clean up, a. Any goods or products, other than real property, remove, treat, detoxify or neutralize the pollutants; manufactured, sold, handled, distributed or disposed or of by: f. Which arise out of pesticide or herbicide (1) The city; application operations. (2) Others trading under the city's name; or 25. Property damage means: (3) A person or organization whose business or LMCIT CMC(11-86)(Rev. 11-04) Page 15 of 20 assets the city has acquired; and 31. Your work means: b. Containers (other than vehicles), materials, parts a. Work or operations performed by the city or on or equipment furnished in connection with such the city's behalf; and goods or products. b. Materials, parts or equipment furnished in Your product includes warranties or representations connection with such work or operations. made at any time with respect to the fitness, quality, durability or performance of any of the items Your work includes warranties or representations included in a. and b. above. made at any time with respect to the fitness, quality, durability, or performance of any of the items Your product does not include vending machines or included in a. or b. above. other property rented to or located for the use of others but not sold. SECTION V - SUPPLEMENTARY PAYMENTS With respect to any claim or suit LMCIT defends under 5. All costs taxed against the covered party in the suit. COVERAGES A, C, AND D, LMCIT will pay supplementary payments. 6. Prejudgment interest awarded against the covered party on that part of the judgment LMCIT pays. If Supplementary payments means: LMCIT makes an offer to pay the applicable limit of coverage, LMCIT will not pay any prejudgment 1. All expenses LMCIT incurs. interest based on that period of time after the offer. 2. Up to $250 for cost of bail bonds required because 7. All interest on the full amount of any judgment that of accidents or traffic law violations arising out of accrues after entry of the judgment and before the use of any vehicle to which the coverage applies. LMCIT has paid, offered to pay, or deposited in LMCIT does not have to furnish these bonds. court the part of the judgment that is within the applicable limits of coverage. 3. The cost of bonds to release attachments, but only for bond amount within the applicable limit of 8. Up to $200,000 for all awards for attorneys' fees coverage. LMCIT does not have to furnish these pursuant to a statute, but this supplementary bonds. payment does not include: 4. All reasonable expenses incurred by the covered a. Awards for attorney fees with respect to suits party at LMCITs request,to assist it in the: alleging violations under federal civil rights laws, state human rights laws or the federal or state a. Investigation or defense of the claim or suit, or constitution; or b. Litigation of any land use, development or b. Attorneys' fees awarded for an act, error, franchise litigation which is filed or served. omission or violation which LMCIT does not have a duty to indemnify pursuant to SECTION VI - Reasonable expenses include the actual loss of P CONDITIONS, 1. earnings up to $100 a day because of time off from work. SECTION VI - CONDITIONS 1. LIMITATIONS ON LMCIT'S DUTY TO covered party other than the city shall not apply to any INDEMNIFY act,error,omission,or violation: LMCITs duty to pay on behalf of or to indemnify a a. Which constitutes malfeasance in office; or LMCIT CMC(11-86)(Rev. 11-04) Page 16 of20 • b. Which constitutes willful neglect of duty; or Notice of damages or injury is not notice of a claim. c. Which constitutes bad faith; or b. If claim is made or suit is brought against the covered party, the covered party shall immediately d. For which the city is not authorized to indemnify any forward to LMCIT every demand, notice, summons person by statute; or or other process received by him or his representative. e. Which constitutes dishonesty on the part of a covered party; or c. The covered party shall cooperate with LMCIT and, upon LMCITs request, assist in making settlements, f. Which constitutes the willful violation of a statute or assist in the conduct of suits and assist in enforcing ordinance by any official, employee, or agent of the any right of contribution or indemnity against any city. person or organization who may be liable to the covered party because of damages for which The terms "malfeasance", "willful neglect of duty", and coverage is afforded under this covenant; and the "bad faith" shall be given the same meaning in this covered party shall attend hearings and trials and covenant as given in the applicable statute with respect assist in securing and getting evidence and obtaining to the city's duty to defend or indemnify its officers, the attendance of witnesses. The covered party shall employees or agents. not, except at his own cost, voluntarily make any payment, assume any obligation or incur any 2. FINANCIAL RESPONSIBILITY LAW expense other than for first aid to others at the time of accident. When this covenant is certified as proof of financial responsibility for the future under the provisions of any d. With respect to any incident or occurrence for which motor vehicle financial responsibility law, such coverage no claim for damages has been made but that might as is afforded by this covenant shall comply with the result in a covered claim for damages under this provisions of such law to the extent of the coverage and covenant, LMCIT shall have the right, at its limits of liability required by such law. discretion and at its expense, to associate with the covered party in the investigation, handling and 3. COVERED PARTY'S DUTIES IN THE defense of such matter, in which event LMCIT and EVENT OF OCCURRENCE, CLAIM OR SUIT the covered party shall mutually cooperate. a. In the event of a claim or suit, notice containing 4. EXTENDED REPORTING PERIOD particulars sufficient to identify the covered party and also reasonably obtainable information with a. LMCIT will provide one or more extended reporting respect to the time, place and circumstances thereof, periods,as described below, if: and the names and addresses of the injured and of available witnesses, shall be given by or for the (1) COVERAGE A is canceled or not renewed; or covered party to LMCIT or any of its authorized agents as soon as practicable. (2) LMCIT renews or replaces COVERAGE A with coverage that: The city shall promptly take, at its own expense, all reasonable steps to prevent damages from arising (a) Has a retroactive date later than the date out of the same or similar conditions;provided that: shown on the Declarations page; or (1) A failure to take such preventative measures (b) Does not apply on a claims made basis. shall not constitute a breach of this condition unless LMCIT has requested the city in writing to undertake b. A basic extended reporting period of 60 days from such preventative measures; and the end of the coverage period is automatically provided without additional charge. (2) Such expense shall not be recoverable under this covenant. c. A supplemental extended reporting period of unlimited duration is available, but only by an LMCIT CMC(11-86)(Rev. 11-04) Page 17 of20 endorsement and for an extra charge. The (2) Any land use, development or franchise supplemental extended reporting period starts 60 litigation;or days after the end of the coverage period. (3) Any lead claim or asbestos claim. The city must give LMCIT a written request for the endorsement within 60 days after the end of the 5. ACTION AGAINST LMCIT coverage period. The supplemental extended reporting period will not go into effect unless the No action shall lie against LMCIT unless, as a condition city pays the additional premium promptly when precedent thereto, there shall have been full compliance due. with all of the terms of this covenant, nor until the amount of the covered party's obligation to pay shall The additional premium for the supplemental have been fully determined either by judgment against extended reporting period will be a percentage of the the covered party after actual trial or by written annual expiring premium for COVERAGE PART A. agreement of the covered party, the claimant and LMCIT. Number of Years Since Retroactive Date Shown Any person or organization or the legal representative on Declarations Page Additional Cost thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under 1 55.0% this covenant to the extent of the coverage afforded by 2 57.0% this covenant. No person or organization shall have any 3 60.3% right under this covenant to join LMCIT as a party to any 4 65.9% action against the covered party to determine the 5 70.8% covered party's liability, nor shall LMCIT be impleaded 5+ 70.8% by the covered party or his legal representative. d. An extended reporting period does not extend the Bankruptcy or insolvency of the covered party or of the coverage period or change the scope of coverage covered party's estate shall not relieve LMCIT of any of provided. It applies only if the date of the its obligations hereunder. occurrence giving rise to the claim for damages is after the retroactive date and before the end of the 6. WAIVER OF STATUTORY LIABILITY coverage period. LIMITATIONS Claims for damages which are first received and a. It is the express intent of the city and of LMCIT that recorded during the basic extended reporting period the procurement of this covenant shall not waive any (or during the supplemental extended reporting monetary limits of liability provided by Minnesota period, if it is in effect) will be deemed to have been Statute §466.04 by any comparable or successor made on the last day of the coverage period. statute, or by common law,which may be applicable to any covered party; and that any previous waiver Once in effect, extended reporting periods may not of liability limits is revoked to the extent that it may be canceled. apply to claims covered under this covenant. e. Extended reporting periods do not reinstate or b. It is the express intent of the city and of LMCIT that increase the limits of coverage applicable to any the procurement of this covenant shall not waive any claim to which this coverage part applies. other immunities, limitations, or defenses imposed by or available under any statute or common law f. Neither the basic extended reporting period nor the which is applicable to any covered party. supplemental extended reporting period is applicable to, and no extended reporting period is provided for, 7. CONSENT TO SETTLE the following: The city may prohibit LMCIT from settling any claim or (1) Any limited pollution liability claim; suit against a covered party without the city's consent, as LMCIT CMC(I 1-86)(Rev. l l-04) Page 18 of 20 • provided below: any applicable deductible. If LMCIT makes such payment,LMCIT has no further duty to defend or to a. At any time before LMCIT has offered or made a indemnify the city or any other covered party for this settlement of a claim or suit, the city may notify claim or suit, and the city assumes any duty which LMCIT that LMCIT may not settle the claim or suit LMCIT would otherwise have had to defend and to without the city's consent. The city must give a indemnify any other covered party. separate notice for each claim or suit which the city intends to prohibit LMCIT from settling without the (2) LMCIT may continue to defend the claim or suit. city's consent. If LMCIT elects to continue to defend the claim or suit, the city must reimburse LMCIT for any excess b. If the city notifies LMCIT that the claim or suit may amount. not be settled without the city's consent, the city must designate an individual authorized to give or f. If the city refuses to consent to a settlement refuse consent on the city's behalf. The city's notice recommended by LMCIT, the city must defend and must include the name, address, and telephone indemnify LMCIT for any claim or suit arising out of number of the individual authorized to give or refuse the failure to settle the original claim or suit. consent on the city's behalf. 8. RETROACTIVE JOINT POWERS c. If the city has notified LMCIT that the claim or suit COVERAGE may not be settled without the city's consent,LMCIT will notify the city of the terms and conditions of LMCIT will, upon the city's request, issue retroactive any proposed settlement. If the city does not consent comprehensive municipal coverage to any joint powers to the proposed settlement, the city must notify entity in which the city is a member and which is not LMCIT within 14 days of the date the city receives named as a covered party under any other LMCIT notice of the proposed settlement,unless the city and coverage. LMCIT have mutually agreed to a longer or shorter period. If within that time the city does not notify Pursuant to this section, LMCIT will issue its standard LMCIT that the city does not consent to the Comprehensive Municipal Coverage document to the settlement, the city will be deemed to have joint powers entity, but coverage shall be subject to an consented to the settlement. annual aggregate limit of $200,000. This limit shall apply to the sum of damages and loss adjustment d. If the city refuses to consent to a settlement expenses, including defense costs, for all claims to recommended by LMCIT, LMCIT will not be liable which the coverage applies. for any excess amount. Excess amount means the sum of all damages and legal defense costs for the Coverage issued pursuant to this section will be issued claim or suit minus the sum of: with the same inception date and the same retroactive date as this covenant. (1) The amount of the settlement proposed by LMCIT; and The premium must be paid to LMCIT before the coverage goes into effect. The premium for coverage (2) Any costs of defense incurred before the date of issued pursuant to this section shall be equal to the the city's refusal. Any excess amount shall not be greater of$5,000 or the premium the joint powers entity included in the calculation of damages for purposes would otherwise pay for coverage at LMCITs current of any applicable Municipal Liability Deductible or rates. General Annual Aggregate Deductible. 9. NO DUPLICATION OF COVERAGE e. If the city refuses to consent to a settlement recommended by LMCIT, LMCIT may, at its sole This covenant shall not apply to any claim or claims discretion, exercise either of the following options: arising out of an occurrence, if any claim or claims arising out of that occurrence were covered under any (1) LMCIT may pay to the city an amount equal to prior covenant issued by LMCIT to the city. the amount of the recommended settlement, minus LMCIT CMC(11-86)(Rev. 11-04) Page 19 of 20 10. OTHER COVERAGE If, pursuant to the COMMON CONDITIONS, 11.a., a covered party has primary liability coverage as an additional insured or additional named insured on another party's coverage, and that insurer fails to defend or indemnify the covered party,LMCIT will do so under this covenant. In any case in which LMCIT incurs costs for a claim which is also covered under any other liability coverage or insurance, LMCIT shall be entitled to the covered party's rights to recover those costs from that insurer. The covered party shall cooperate with and assist LMCIT as requested in enforcing any rights against that insurer. 11. SEPARATION OF COVERED PARTIES As respects the particulars and statements contained in the application for this coverage and the exclusion set forth herein, this coverage shall be construed as a separate agreement with each covered party. Nothing in this paragraph shall be construed to increase LMCITs maximum liability set forth in the Declarations and as described in SECTION III-LIMITS OF COVERAGE. 12. DEDUCTIBLES a. For purposes of deductibles under this coverage, the deductible applies to the sum of the damages, loss adjustment expense, defense costs and supplementary payments as defined in SECTION V -SUPPLEMENTARY PAYMENTS. b. The terms of the covenant, including those with respect to: (1) The LMCITs rights and duties with respect to the defense of suits; and (2) The covered party's duties, in the event of an occurrence, apply irrespective of the application of the deductible amount. c. LMCIT may pay any part or all of the deductible amount to effect settlement of any claim or suit, and upon notification of the action taken, the city shall promptly reimburse LMCIT for such part of the deductible amount as has been paid by LMCIT. LMCIT CMC(I 1-86)(Rev.11-04) Page 20 of 20 MUNICIPAL LIABILITY LMC League of Minnesota Cities Cities promoting excellence CITY OAK PARK HEIGHTS, CITY OF COVENANT NUMBER CMC 26394 1 HAZARD PREMIUM BASIS ADVANCED PREMIUM Premises Operations Code Basis OPERATING EXPENDITURES A 2,506,133 PREMIUM INCLUDED FOR ALL HAZARDS WATERWORKS D 137,425 WHERE A PREMIUM BASIS IS SHOWN STREETS B 20 Independent Contractors G 1, 186,626 Products/Completed Operations WATERWORKS H 233,000,000 LMCIT MGL-1(01-95) Page 1 of 2 MUNICIPAL LIABILITY (Cont'd.) Municipal Liability Hazard Codes When used as a premium basis: Code (A) "Operating expenditures" means all expenditures used to operate the city, excluding capital purchases, where the individual project or item exceeds five percent (5%) of the total operating expenditures of the city; expenditures for the independent contractors that provide the city with certificates of insurance indicating adequate limits; welfare benefits and expenditures for those exposures which we are separately rating, per $1,000. (B) "Per mile" means the total number of miles of streets, paved or unpaved, owned by the city, within the city limits, not including toll roads or bridges, per mile. (C) "Receipts" means the gross amount of money charged by the city, including taxes, for operations rated on a receipts' basis (this does not include taxes which are collected separately and remitted directly to this or any other governmental entity), per $100 of receipts. (D) "Payroll" means the entire payroll (remuneration) earned during the coverage period, including overtime, employees of the city working in the department (classification) shown, per $100 payroll. (E) "Each" means per unit. (F) "Square footage" means per square foot. (G) "Cost" means the total cost for operations performed for the city by an independent contractor during the coverage period, including the cost of labor, materials and equipment furnished, and all fees or commission made, whether paid or due. (H) "Per gallon" means annual usage of water, per 1,000,000 gallons. LMCIT MGL-1 (01-95) Page 2 of 2 COMPREHENSIVE MUNICIPAL LIABILITY COVERAGE ® Coverage A Municipal Liability ❑ Coverage A Municipal Liability, but only for Bodily Injury, Property Damage or Personal Injury ❑ Coverage A Municipal Liability, except for Bodily Injury, Property Damage or Personal Injury ® Coverage B Medical and Related Expense ® Coverage C Automobile Liability— Bodily Injury and Property Damage ® Coverage D Land Use, Development or Franchise Litigation In consideration of the premium charged, it is understood and agreed that the Declarations and Section II - Who Is Covered are amended to include: ECONOMIC DEVELOPMENT AUTHORITY SUBJECT TO A RETROACTIVE DATE OF JULY 07, 1998. for all coverage where ❑ is X'd above. All other terms and conditions remain unchanged. LMCIT Page 1 of 1 ME066(11/96) (Rev. 11/02) COMPREHENSIVE MUNICIPAL COVERAGE WAIVER OF STATUTORY LIABILITY LIMITATIONS ENDORSEMENT In consideration of the additional premium paid by the city, Section VI- Conditions, paragraph 6, is deleted and is replaced by the following: 6. STATUTORY LIABILITY LIMITATIONS AND IMMUNITIES a. It is the express intent of the city and of LMCIT that for any claim to which this covenant applies, the monetary limits of liability provided by Minnesota Statute 466.04 are waived to the extent of the limits of coverage shown in the declarations and further described in Section III - Limits of Coverage. This waiver shall not apply to any claim not covered under this covenant, and shall not affect any limitations which may apply by virtue of any other statute or common law. b. It is the express intent of the city and of LMCIT that the procurement of this covenant shall not waive any other immunities, limitations, or defenses imposed by or available under any statute or common law which is applicable to any covered party. All other terms and conditions remain unchanged. LMCIT ME073 (11/97)(Rev. 11/01) z !ia LMC MUNICIPAL EXCESS 4 League of Minnesota Cities Cities promoting excellence LIABILITY COVERAGE PREPARED ESPECIALLY FOR CITY OF OAK PARK HEIGHTS 14168 OAK PARK BOULEVARD P.O. BOX 2007 STILLWATER, MN 55082 07/07/05 - 07/07/06 Agent: FOREST LAKE INSURANCE AGENCY DBA LANDMARK INSURANCE SVCS 232 SOUTH LAKE STREET FOREST LAKE, MN 55025-2605 League of Minnesota Cities 145 University Avenue West St. Paul, MN 55103-2044 Phone: (651) 281-1200 Fax: (651) 281-1298 Web Site: http://www.lmnc.org **IMPORTANT** PLEASE READ YOUR AGREEMENT 1 MUNICIPAL EXCESS LIABILITY DECLARATIONS Covenant Number: Coverage is Provided by: ' r� MEL 5291 THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST Previous Covenant Number: (Herein called LMCIT) Cities omotMinnesota in esocellenes ( ) Cities promoting excellence MEL 4932 Item 1. CITY and MAILING ADDRESS: CITY OF OAK PARK HEIGHTS 14168 OAK PARK BLVD P.O. BOX 2007 STILLWATER, MN 55082 Item 2. COVERAGE PERIOD: From: 07/07/05 To: 07/07/06 12:01 AM Standard Time at Mailing Address Indicated on Item 1. Claims Made Item 3. RETROACTIVE DATE: July 07, 1987 Item 4. THE COVERED PARTY IS: CITY Item 5. LIMITS OF COVERAGE: Aggregate Limit $ 1,000,000. Item 6. PREMIUM: $ 7,871. Item7. FORM NUMBERS AND/OR ENDORSEMENTS FORMING A PART OF THE AGREEMENT AT ISSUE: MELC(11/04) UME-4(11/03) acp), Executive Director, LMCIT LMCIT DEC-017(11/96)(Rev. 11/02) UNINSURED/UNDERINSURED MOTORISTS - FOLLOW FORM It is understood and agreed that in so far as coverage is provided in the underlying coverage, uninsured and underinsured motorists coverage is on a follow form basis. All other terms and conditions remain unchanged. LMCIT UME-4 (01-95) (Rev. 11-03) Page 1 of 1 Covenant Number: MUNICIPAL AUTOMOBILE DECLARATIONS CMC 26394 Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST (Herein called LMCIT) League of Minnesota Cities Cities promoting excellence J Item 1. CITY: OAK PARK HEIGHTS, CITY OF Item 2. COVERAGE PERIOD: From: 07/07/05 To: 07/07/06 12:01 AM Standard Time at Mailing Address Indicated on Common Coverage Declarations Item 3. THE COVERED PARTY IS: CITY Item 4. COVERAGE: IN RETURN FOR THE PAYMENT OF PREMIUM AND SUBJECT TO ALL OF THE TERMS OF THIS COVENANT, LMCIT AGREES WITH THE COVERED PARTY TO PROVIDE THE COVERAGE AS STATED IN THIS COVENANT, SUBJECT TO THE FOLLOWING LIMITS: COVERAGE: LIMIT: AUTOMOBILE LIABILITY $1,000,000 Per Occurrence BASIC ECONOMIC LOSS BENEFITS Basic Minnesota Statutory Coverage UNINSURED&UNDERINSURED MOTORISTS Basic Minnesota Statutory Coverage AUTOMOBILE PHYSICAL DAMAGE Actual Cash Value,Unless Endorsed Item 5. DEDUCTIBLE (SUBJECT TO GENERAL ANNUAL AGGREGATE DEDUCTIBLE, IF ANY, SHOWN ON COMMON COVERAGE DECLARATIONS). $ 500 per occurrence Item 6. FORMS AND ENDORSEMENTS ATTACHED TO THIS COVERAGE PART: A0010(11-03) CM C(11-04) MA082(11-03) MA083(11-03) M A084(11-03) MA085(11-03) M E063(11-01) M E066(11-02) ME073(11-01) ME079(11-03) LMCIT DEC-016(1 1/86)(Rev,11/03) MUNICIPAL AUTOMOBILE PHYSICAL DAMAGE COVERAGE Various provisions in this covenant restrict coverage.Read The word you and your refer to the city shown in the the entire covenant carefully to determine rights,duties and Declarations. The words we, us and our refer to LMCIT Y what is or is not covered. Throughout this covenant, the providing this covenant word city refers to the first city shown in the Declarations. The word LMCIT refers to the League of Minnesota Cities Other words and phrases that appear in italics have special Insurance Trust. meaning, as given in SECTION IV—DEFINITIONS. SECTION I - COVERAGE AGREEMENT We will pay for direct and accidental t 1 a e loss to a not covered as described under SECTION II— CAUSES damage o r to s covered automobile unless the cause of loss or damage is OF LOSS AND DAMAGES NOT COVERED. SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED 1. CAUSES OF LOSS NOT COVERED 2. DAMAGES NOT COVERED We will not pay for loss or damage caused directly or We will not pay for the following damages: PY g indirectly by any of the following.Such loss or damage is excluded regardless of any other cause or event that a. Damages caused by; contributes concurrently or in any sequence to the loss. (1) Wear and tear; a. War. (2) Freezing;except freezing of the pumping apparatus of a (1) War,including undeclared or civil war; fire truck or similar emergency or other utility truck; or (2) Warlike action by a military force, including (3) Mechanical or electrical breakdowns. action in hindering or defending against an actual or expected attack by any government, sovereign This exclusion does not apply if the above damage results or other authority using military personnel or other from other loss or damage covered by this Coverage Part. agents; or b. Blowouts,punctures, or other road damage to tires. (3) Insurrection, rebellion, revolution, usurped power or action taken by governmental authority in This exclusion does not apply if the above damage results hindering or defending against any of these. from other loss or damage covered by this Coverage Part. SECTION III - LIMITS OF COVERAGE AND VALUATION 1. LIMITS OF COVERAGE b. We will not pay for loss or damage in any one occurrence until the amount of loss or damage exceeds a. The most we will pay for loss or damage is the smaller the Deductible in Item 5 of the Declarations, and the of the following amounts: amount of loss will be reduced by the deductible amount. (1) The actual cash value of the damaged or stolen property at the time of the loss or damage; or The deductible applies against the total loss incurred by you from any one occurrence,regardless of the number (2) The cost of repairing or replacing the damaged or of covered automobiles involved. stolen property with other like kind and quality. LMCIT A0010(I 1189)(Rev. 11-03) Page 1 of 3 2. LOSS VALUATION competent and disinterested umpire. If they cannot agree, either may request that selection be made by a a. At our option we may: judge of court having jurisdiction. The appraisers will state separately the actual cash value and the amount of P Y (1) Pay for, repair, or replace damaged or stolen the loss or damage. If the appraisers fail to agree,they property; will submit their differences to the umpire. An award agreed to by any two will be binding. (2) Return the stolen property at our expense. We will pay any damage for dama e that results to the covered Each party will: automobile from the theft; or (1) Pay its chosen appraiser and; (3) Take all or any part of the damaged or stolen property at an agreed or appraised value. (2) Bear the other expenses of the appraisal and umpire equally. b. If you and we fail to agree as to the amount of loss or damage,either may demand an appraisal of the loss or We shall not be held to have waived any of our rights damage. In such event,you and we shall each select a by any act relating to appraisal. competent appraiser. The two appraisers will select a SECTION IV - DEFINITIONS 1. Automobile means a land motor vehicle,trailer or semi- 3. City means governmental body or entity first named in trailer designed for travel on public roads. the Declarations. For purposes of this coverage, city includes relief associations.Unless specifically named 2. Covered automobile means: in the Declarations,city shall not include: a. Any automobile that you own; a. Gas, electrical or steam utilities commission; b. Any automobile that you rent or lease for a period of b. Port authority, housing and redevelopment authority, more than 30 days; economic development authority, area or municipal redevelopment authority or similar agency; c. Any automobile that you borrow; c. Municipal power agency; d. Any automobile that you rent or lease from a person or organization that is not in the business of renting or d. Municipal gas agency; leasing automobiles; or e. Hospital or nursing home board or commission; e. Any automobile that you or a city official,employee,or volunteer rents for city business for less than 30 days f. Airport commission; from a person or organization in the business of renting automobiles if the rental agreement requires you or the g. Welfare or public relief agency; individual renting the automobile to pay for loss or damage to the automobile. h. School board; However,the following automobiles are not a covered i. Joint powers entity. automobile while used in the business of the city: 4. Joint powers entity means an operating entity created a. Any automobile which is owned or leased by a city by two or more governmental units entering into an official, employee or volunteer; or agreement as provided by statute for the joint exercise of governmental powers. An intergovernmental b. Any automobile which is owned or leased by a agreement will be deemed to create a joint powers member of the city official's,employee's or volunteer's entity if the agreement establishes a board with the household. effective power to do any of the following,regardless LMCIT A0010(11/89)(Rev. 11-03) Page 2 of 3 of whether the specific consent of the constituent c. To hire employees; governmental units may be required: d. To purchase or otherwise acquire or hold real or a. To receive and expend funds; personal property; or b. To enter into contacts; e. To sue or be sued. SECTION V - CONDITIONS 1. COVERAGE UNDER TWO OR MORE 3. LOSS CONDITIONS COVERAGES Duties in the event of loss: If two or more of this covenant's coverage's apply to the same loss or damage,we will not pay more than the actual a. You must promptly notify us of any loss. amount of the loss or damage. b. You must tell us how, when, and where the loss 2. COVERAGE PERIOD, COVERAGE happened. You must assist in obtaining the names and TERRITORY addresses of any witnesses. Under this Coverage Part: c. You must do what is reasonably necessary after the loss at our expense to protect the covered automobile from a. We cover loss or damage commencing: further loss. You must submit a proof of loss when required by us. (1) During the coverage period shown in the Declarations; and d. You must promptly notify the police if the covered automobile or any of its equipment is stolen. (2) Within the coverage territory. b. The coverage territory is: (1) The United States of America (including its territories and possessions); (2) Puerto Rico; and (3) Canada LMCIT A0010(11/89)(Rev. 11-03) Page 3 of 3 BASIC ECONOMIC LOSS BENEFITS AND UNINSURED AND UNDERINSURED MOTORISTS COVERAGE LMCIT agrees to provide Basic Economic Loss Benefits and Uninsured and Underinsured Motorists Coverage in such minimum amounts, and for such motor vehicles, as are required by the Minnesota No-Fault Automobile Insurance Act, q Y Minnesota Statutes Section 65B.41 to 65B.71. The Comprehensive Municipal Coverage Common Conditions also apply unless they are in conflict with the Minnesota No-Fault Automobile Insurance Act. In that event, the Minnesota No-Fault Automobile Insurance Act shall govern. LMCIT MA082(11/03) Page 1 of 1 SCHEDULED BASIC ECONOMIC LOSS BENEFITS FOR UNREGISTERED MOTOR VEHICLE ENDORSEMENT It is agreed that with respect to coverage afforded for Basic Economic Loss Benefits, coverage is amended to add coverage for motor vehicles that are not required to be registered pursuant to Minnesota Statute Chapter 168. LMCIT MA083(11/03) Page 1 of 1 UNINSURED AND UNDERINSURED MOTORISTS COVERAGE INCREASED LIMITS OF COVERAGE It is agreed that with respect to coverage afforded for Uninsured and Underinsured Motorists Coverage, the limit of coverage as stated on DEC-016 is amended to read $1,000,000. LMCIT MA084(11/03) Page 1 of 1 SCHEDULED UNINSURED AND UNDERINSURED MOTORISTS COVERAGE FOR UNREGISTERED MOTOR VEHICLE ENDORSEMENT It is agreed that with respect to coverage afforded for Uninsured and Underinsured Motorists Coverage, coverage is amended to add coverage for motor vehicles that are not required to be registered pursuant to Minnesota Statute Chapter 168. LMCIT MA085(11/03) Page 1 of 1 Definition of City Endorsement It is understood and agreed that city is amended to include: ECONOMIC DEVELOPMENT AUTHORITY All other terms and conditions remain unchanged. LMCIT Page 1 of 1 ME063(11/95)(Rev. 11/01) COMPREHENSIVE MUNICIPAL LIABILITY COVERAGE ® Coverage A Municipal Liability ❑ Coverage A Municipal Liability, but only for Bodily Injury, Property Damage or Personal Injury El Coverage A Municipal Liability, except for Bodily Injury, Property Damage or Personal Injury ® Coverage B Medical and Related Expense ® Coverage C Automobile Liability— Bodily Injury and Property Damage ® Coverage D Land Use, Development or Franchise Litigation In consideration of the premium charged, it is understood and agreed that the Declarations and Section II - Who Is Covered are amended to include: ECONOMIC DEVELOPMENT AUTHORITY SUBJECT TO A RETROACTIVE DATE OF JULY 07, 1998. for all coverage where ❑ is X'd above. All other terms and conditions remain unchanged. LMCIT Page 1 of 1 ME066(11/96) (Rev. 11/02) w League of Minnesota Cities L] '1 Insurance Trust DEC 145 University Avenue West,St.Paul,MN 55103-2044 of Minnesota Meg EC ' (651)281-1200 • (800)925-1122 League cbe# tinswnwN � Fax (651)281-1298 • TDD: (651)2811290 _ www.lmnc.org December 7, 2005 To: LMCIT Members and Agents From: Pete Tritz Re: Coverage Changes for 2005-2006 Here's a summary of coverage changes that cities will see for the coming year. These changes apply to property/casualty coverage written or renewed on or after November 15, 2005. Land use coverage Coverage added under land use section for regulation of refuse collection and challenges to certain city enterprise operations. The "land use" section of the LMCIT liability coverage covers three types of litigation: litigation related to land use regulation; litigation related to development or redevelopment, and litigation related to franchising and regulation of private utilities. There are two changes in this coverage for the coming year: • Litigation involving city regulation of refuse collection will be covered in the same way as litigation involving franchising or regulation of utilities. • Litigating challenging cities' authority to engage in enterprise operations such as internet service will be covered under the land use coverage. Property Property in the open coverage clay f ed: The definition of property in the open has been modified to reduce ambiguity. In addition, LMCIT is replacing it's single add/subtract endorsement with two new endorsement forms. One will be for use in adding property to property in the open coverage. The other will be for specifying property that will not be covered under this coverage. Bond coverage Minimum bond coverage increased from $25,000 to $50,000. All bond coverage in LMCIT will now be written with a minimum coverage limit of$50,000. Members who have carried lower limits in the past will automatically be increased to $50,000 at no additional cost to the city. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER HIPAA Defense coverage added for HIPAA data claims. LMCIT liability coverage will now cover defense costs in administrative actions charging violations of HIPAA data privacy and data security regulations, even if there is no explicit claim for damages. Petrofund Petrofund coverage automatically provided. All member cities will now automatically have Petrofund Supplement coverage for petroleum tank leaks and spills. This has been an optional, extra-cost coverage in the past. The coverage applies only to tanks that are in compliance with MPCA regulations and are eligible for reimbursement from the state Petrofund, but the city will no longer have to schedule coverage for each individual tank. This coverage reimburses the city's share of damages and clean-up costs for tank leaks and spills, along with legal defense costs, subject to an aggregate limit of$250,000. Tenants and Users Liability Insurance Policy (TULIP) TULIP coverage being made available. Many cities allow private individuals to use or rent municipally owned facilities for various kinds of meetings and banquets and events. There is risk that goes along with allowing private use of city facilities;there is always a possibility that a guest may be injured and bring a claim. To counter this risk,many cities require users to have liability insurance and to name the city as an additional insured. The LMCIT Board has approved development of a Tenant and Users Liability Insurance Policy (TULIP)program. This will provide an streamlined, low-cost way for users of city facilities to obtain insurance that meets city insurance requirements. The TULIP program will be offered in cooperation with Bene-Marc, Inc., and Clarendon Insurance Company, and will take effect in early 2006. Cities and agents will receive detailed information on costs, coverage, and procedures at that time. League of Minnesota Cities f Insurance Trust ! 145 University Avenue West,St. Paul,MN 55103-2044 1 (651)281-1200 • (800)925-1122 League of Minnesota Cities Cities promoting excellence Fax:(651)281-1298 • TDD:(651)2814290 www.lmnc.org December 7,2005 To: LMCIT Members and Agents From: LMCIT Board of Trustees Re: 2006 Property/Casualty and Workers' Compensation Rates and Dividend • Property/casualty rates for 2005-2006 Here are the premium rate changes LMCIT members will see at their next renewal. The property/casualty rate changes apply to renewals on or after November 15, 2005. • Municipal liability rates will decrease 4%. • Property rates will decrease 3%. • Auto liability rates will decrease 2%. • Auto physical damage will increase 2% • Open meeting law defense will decrease 10% There are no changes for excess liability, machinery breakdown, liquor liability, or bond rates (minimum available bond coverage was increased from $25,000 to $50,000 without a rate change). The rate changes are primarily driven by changes in loss experience. The decreases listed above do not mean that your city's actual premium will necessarily decrease by the same amounts. Although rates do indeed influence premiums, an individual city's actual premiums will also be affected by changes in its expenditures,property values,payrolls, and other exposure measures, and also by changes in the city's experience rating. Work comp rates for 2006 The Board voted to approve a 5% increase in work comp rates for 2006, and also to approve a continuation of the 3% credit for managed care. For the past two years, two main patterns have shaped LMCIT work comp costs. First, medical costs have continued to increase sharply, and there is no sound basis for predicting any kind of significant change in this trend. Medical benefits have become the biggest single component of work comp costs, and now cost LMCIT nearly twice as much as wage replacement benefits for lost time. Second, indemnity costs have been stable and generally less than projections and have partially offset the increases in medical costs. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER Dividends Property/casualty program members will share a $12 million dividend this year. This is greater than the $9 million amount we returned in 2002, 2003, and 2004. Attesting to a very successful year of operations, it is indeed the largest dividend we've returned since 1997. As in the past, we'll distribute the dividend in mid-December. The dividend formula will be the same as we've used for several years. Under that formula, each city's share is proportionate to the difference between the city's total earned premiums and total incurred losses for all years the city has been a member, with large individual losses capped for purposes of the formula. The work comp program will not return a dividend this year. What's behind the rate changes? Property/casualty Overall,the liability and property loss picture doesn't look much different than it has in the recent past, and we don't see any new trends or alarming patterns. Liability losses make up not quite half of our total loss cost and have been remarkably stable for the past few years. Actual loss costs have been coming in below our projections. Property makes up about a third of our loss cost. Property losses tend to be more variable and are directly influenced by things like storms, floods, and fires. From '03 on,property loss rates have been low, in large part because the last three summers have produced very little storm loss. . Despite the stability, litigation relating to land use regulation and development continues to be a concern. Land use litigation costs average over$2 million a year—about 20% of the total liability loss cost—and they can vary a great deal from year to year. There are a couple of other factors also contributing to our ability to reduce property/casualty rates: • While dollar loss costs have remained pretty stable, city expenditures have generally continued to grow. In simplest of terms, this means that a relatively smaller percentage of city dollars are needed to fund projected and actual losses. This enables a reduction in premium rates. • Last year,the LMCIT Board decided to significantly increase the amount of risk LMCIT retains on liability claims, from $500,000 to $1,000,000 per occurrence. We also increased LMCIT's retention on property losses,but by a smaller proportion. Keeping more risk means that we'll be paying more of the losses directly and that our loss costs will vary more from year to year, but it also significantly reduces our reinsurance costs. In the long run, we expect that the increased retention will produce a significant net savings for LMCIT members. LMCIT's strong fund balance makes it possible to handle that variability,but it may very well mean that cities will also see more variability in dividends from year to year as well. 2 Work comp If this section seems very familiar to what you read last year,the reason is that the news hasn't changed much or gotten any better. The main factor driving the work comp rate increase for 2006 is once again rising medical costs. Medical costs for work comp injuries are projected to continue increasing at a rate of about 9% a year. Medical costs now make up just about half of work comp loss costs—about as much as indemnity benefits, Special Compensation Fund assessments, and defense costs combined. As noted above, our indemnity costs have been generally stable and less than projections. While this is good and helps offset the increase in medical costs, we also need to keep an eye on injury frequency. It was up very slightly in 2004 and the first half of 2005. We don't know if this is a blip on the radar screen or the beginning of a trend, but we will want to monitor it. Nonetheless, we are able to keep our rate increase down to 5%—the smallest increase in four years—and this modest increase also includes a small contingency margin built into the rates. Hopefully cities can continue reducing the numbers of employee injuries; that's really the best tool we have to control future premium costs. Investment income remains a very important element in the LMCIT work comp program,though not quite as significant as it was a few years ago. Investment income now produces about a fifth of the program's total revenue; a few years ago, it was over a third. Nevertheless, investment income is still very important. Premiums alone would not quite cover projected losses, let alone administrative and reinsurance costs. How was the dividend amount determined? Most LMCIT members are very familiar with LMCIT's approach to rate-setting. Briefly, the premium rates incorporate a safety margin. That is, the premiums plus investment income are designed to produce enough revenue to cover losses and expenses even if losses turn out to be greater than projections. If losses turn out to be at projections,that margin isn't needed to pay for losses and is available either to be returned to members as a dividend or used to strengthen LMCIT's fund balance. If losses turn out to be lower than projections, that additional savings also becomes available to be returned to members. One fact of life in any insurance operation is that it can take several years until claims are finally settled and we know for sure what the actual loss costs were. For this reason, we have to work with estimates, which are continually revised and updated. The program's results and the amount of dividend we can return in any one year therefore don't just depend on what happened during that year; the year's financial results are also affected by changes in our estimates of what prior year losses will ultimately cost. Here's a summary of what makes this year's $12 million dividend possible: • The losses we incurred during the past year were lower than projected. They did not reach into the safety margin or even use up all of the funds earmarked for loss payments. 3 • The current estimate of what losses from prior years will ultimately cost is less than our earlier projections. The funds previously set aside for those losses are therefore freed up. • Both earned premiums and investment income were somewhat higher than projections. The LMCIT Board also again used a small part of this year's net income to further strengthen the program's fund balance. The Board concluded that this was appropriate in light of the continued growth in the property/casualty program's premium volume and the increased amount of risk LMCIT will now be retaining. If you have any questions or comments, please feel free to contact Pete Tritz at the League office, or any of the members of the LMCIT Board. 4 i . S LEAGUE OF MINNESOTA CITIES INSURANCE TRUST PROPERTY/CASUALTY 2005 DIVIDEND CALCULATION AT MAY 31, 2005 FOREST LAKE INSURANCE AGENCY DBA LANDMARK INSURANCE SVCS 232 S LAKE ST FOREST LAKE MN 550252 OAK PARK HEIGHTS 14168 OAK PARK BLVD P.O. BOX 2007 STILL WA TER MN 55082 GROSS EARNED PREMIUM $ 846,067 ADJUSTED LOSSES $ 111,612 MEMBERS DIVIDEND PERCENTAGE .00156962842 DIVIDEND AMOUNT $ 18,836 League of Minnesota Cities Insurance Trust Property/Casualty Program OAK PARK HEIGHTS Premium and Dividend History 1 $50,000 - - } '°s ,,..: $40,000- - - - - $30,000 vvt :'::,,.:',::: ''°q° i s , vv, $20,000 t - - - - - $10,000 - -- I < $0 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 El Premiums $45,311 $43,126 $43,126 $48,711 $51,199 $49,224 $50,034 1 $56791 $52,398 $53,282 ■Dividends $20,700 $19,969 $15,430 $11,209 $7,858 $12,729 $14,393 $14,331 $14,235 $18,836 OAK PARK HEIGHTS Premiums and Dividends Since 1987 $900,000 $800,000 H $$41,073 $700,000 - $600,000 - $500,000 - $400,000 - $300,000 - $200,000 - 234,210 $100,000 - $0 - I Premiums Dividends • League of Minnesota Cities Insurance Trust LMC 145 University Avenue West,St.Paul,MN 55103-2044 Cities (651)281-1200 • (800)925-1122 League°Minnesota Cidas ng woaaH�� Fax:(651)281-1298 • TDD: (651)281-1290 www.lmnc.org December 15, 2005 To: City Officials From: LMCIT Board of Trustees Re: 2005 Property/Casualty Dividend We are very pleased to enclose a check for your city's share of the $12 million dividend which the LMCIT property/casualty program is returning to member cities. Also included in this mailing are the following: • A data sheet showing the premium and loss data used to calculate your city's dividend; and • A memo explaining in detail how your city's dividend is calculated. We've also enclosed two other items, which we'd ask you to share with the city council: • A memo to elected officials with some background information on the dividend; and • Graphs showing your city's premium and dividend history. Please feel free to call Pete Tritz at 651-281-1265, if you have any questions or need any additional information. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER League of Minnesota Cities L 141C Insurance Trust 145 University Avenue West,St. Paul,MN 55103-2044 (651)281-1200 • (800)925-1122 Loug"°of Mim seofa Cities Fax:(651)281-1298 • TDD:(651)281-1290 Cities promoting excellence www.lmnc.org December 13, 2005 To: LMCIT cities and agents From: LMCIT Board of Trustees Re: 2005 LMCIT property/casualty dividend—calculations and outlook Members of the LMCIT property/casualty program are sharing this year in a$12 million dividend. This memo will give you some information on the dividend, how your city's share is calculated, and what you might expect as far as future dividends. How does LMCIT determine your city's dividend? The first step is for the LMCIT Board to determine how much surplus funds are available and not needed for losses, expenses, or reserves. This year the Trustees determined that$12 million could be returned to our member cities. The next step is to allocate that$12 million among the members. The surplus that LMCIT has at any one time is the cumulative result of all of the cities' premiums and losses since LMCIT began. Cities that have been members the longest, that have contributed the most in premiums, and that have had fewer losses have in effect contributed more to creating the surplus. The dividend formula is designed to return a proportionally greater share of the total dividend to those cities. Each city's share is proportionate to the difference between that city's total earned premiums and total incurred losses for all the years the city has participated in LMCIT. The formula also incorporates a"loss limiting factor"to temper the effect of a single large "shock" loss on the city's dividend. Without this kind of limitation, a small or mid-sized city that happened to be hit by a single catastrophically large loss might not receive any dividend for many years. The dividend calculation The enclosed sheet shows the premium and loss figures that were used to calculate your city's dividend. The premium figure is your city's total of all earned premiums through May 31, 2005, for all of the years the city has been an LMCIT member. The "adjusted loss" figure is your city's losses for all years of participation, minus applicable deductibles, and after capping each individual large loss. For purposes of the dividend formula, each individual loss is capped at the lesser of either the city's earned premium for that year or$100,000. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER To calculate the dividend, we subtract your city's adjusted losses from your earned premiums. The remainder represents your city's contribution to the surplus. We do that same calculation for all of the member cities, add up all of those remainders, and then calculate your city's remainder as a percentage of that total. Your city receives that percentage of the $12 million total that's available this year. This is the same formula we've used for many years. What's behind this year's dividend? Dividends and premium rates are very closely tied together. Most LMCIT members are very familiar with LMCIT's approach to rate-setting. Briefly, the premium rates incorporate a safety margin. That is, the premiums plus investment income are designed to produce enough revenue to cover losses and expenses even if losses turn out to be greater than projections. If losses turn out to be at the same level we projected, then the margin isn't needed to pay for losses and is available either to be returned to members as a dividend or used to strengthen LMCIT's fund balance. If losses turn out to be lower than projected,those additional savings also become available to be returned to members. One fact of life in any insurance operation is that it can take several years until claims are finally settled and we know for sure what the actual loss costs were. For this reason, we have to work with estimates, which are continually revised and updated. The program's results and the amount of dividend we can return in any one year therefore don't just depend on what happened during that year;the year's financial results are also affected by changes in our estimates of what losses from earlier years will ultimately cost. Here's a summary of what makes this year's dividend possible: • The losses we incurred during the past year were lower than projected. They did not reach into the safety margin or even use up all of the funds earmarked for loss payments. • The current estimate of what losses from prior years will ultimately cost is less than our earlier projections. The funds previously set aside for those losses are therefore freed up. • Both earned premiums and investment income were somewhat higher than projections. Should we expect similar dividends in the future? Because LMCIT has been able to return sizable dividends for many years in a row, some cities have begun to build those amounts into their budgets. If your city does so, make sure you have a plan for what you'd do if there is no 2006 dividend or if it's substantially smaller. Whether there will be dividends in the future depends on the interplay of premiums and losses. Because we can never know what losses we'll have from tornadoes or lawsuits or fires or car accidents or sewer backups or whatever, we can never know whether there will be dividends in the future either. The most important thing to keep in mind is that there's never a guarantee. 2 As a very general comment,we would look for future dividend amounts to be more variable from year to year, and for future dividends to be smaller on the average. Here's why: • Increased risk retention. Last year,the LMCIT Board decided to increase the amount of risk we retain on liability claims, from $500,000 to $1,000,000 per occurrence. We also increased LMCIT's retention on property losses, but by a smaller proportion. Retaining more risk reduces LMCIT's reinsurance costs and we expect it will produce a significant net savings in the long run, even though we'll now be paying more of the losses directly. The higher retention also means that our net loss costs will probably be more variable from one year to the next, which could translate into more variability in future dividends as well. To put it another way, with the higher retention we expect on the average to save money for cities, but it means we'll do a little better financially in the good loss years and a little worse financially in the bad years. • Smaller margins. In recent years, we've been building a smaller safety margin into the rates, and instead relying more heavily on the accumulated fund balance for the needed contingency funding. All else being equal, the result would be smaller average dividends. We'll do our best to run the program as economically as we can, and LMCIT will continue to return to the members any funds that aren't needed for losses, expenses, or reserves. But we can't guarantee that there will always be a sizable dividend, or any dividend at all. It's important to keep that in mind when you're doing your financial planning. In short, here are the two key points to remember: 1. Don't rely on there being future dividends. 2. At the end of the day, it all depends on what the losses are. But regardless of what the future may hold, we want to congratulate member cities on another successful year. The record shows that the basic idea of LMCIT—cooperative risk management by cities—really works. The reason it works is because of cities' commitment to cooperation and to controlling losses. It's a record that Minnesota cities should be very proud of. If you have any questions or comments,please feel free to contact Pete Tritz at the League office, or any of the members of the LMCIT Board. 3 League of Minnesota Cities LW Insurance Trust 145 University Avenue West,St.Paul,MN 55103-2044 League of M;.,„� Cities (651)281-1200 • (800)925-1122 Cities promot;ng excellence Fax (651)281-1298 • TDD:(651)281-1290 .1 www.lmnc.org December 15, 2005 To: Mayors and council members of LMCIT member cities From: LMCIT Board of Trustees Les Heitke, Mayor, Willmar Sherry Butcher, City Council, Eden Prairie Joel Hanson, City Administrator, Little Canada Brenda Johnson, City Council, Chatfield Todd Prafke, City Administrator, St. Peter Jim Miller, Executive Director, LMC Paul Sparks, Executive Director, Albert Lea Port Authority The LMCIT property/casualty program is returning $12 million this year to member cities as a dividend. This is the nineteenth straight year that LMCIT has been able to return a dividend, and it brings the sum of the dividends returned to $187 million since 1987. We are very pleased and proud that our community of efforts has resulted in another successful year and a property/casualty dividend that equals the largest in the history of our program. LMCIT Dividends $187 Million Since 1987 $25,000,000 --$20,000,000 - --- F$15,000,000 $10,000,000 $5,000,000 I i $0 . '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 [• Property/casualty JWork Comp 1 The reason LMCIT is able to return a substantial dividend is simple: Member cities have kept losses below the level that the premiums were designed to fund. That's paid off not only in dividends but in lower premiums as well. Liability premium rates are now about a third lower than they were ten years ago. Property premium rates are about the same as they were in 1992, and the coverage is now much broader. Our program is a tremendous success story, and as AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER Minnesota city officials you should all be very proud of what you've accomplished by working together through LMCIT. We've enclosed a chart showing your city's share of this year's LMCIT property/casualty dividend, how that compares with your premiums, and what your city's past premiums and dividends have been. Each city's share of the total dividend depends on the city's total premiums and losses for all the years the city has been a member of LMCIT. The longer your city has been a member and the more successful you've been in avoiding losses, the greater your city's dividend. Why doesn't LMCIT just reduce premiums instead of returning dividends? LMCIT embraces a conservative financial approach; the dividends are a by-product of that approach. LMCIT's premium rates are designed with a safety margin, so they'd cover losses and expenses even if the losses turn out to be greater than projected. If losses turn out to be at or below projections, that safety margin isn't needed and can be returned to the members. This year, losses were lower than projections, freeing up the"unused"portion of the projections—as well as the additional safety margin—to be returned to members as dividends. Unlike a private insurance company, LMCIT is owned and controlled by its member cities. Because it's a non-profit cooperative organization, if LMCIT has funds that aren't needed for losses, expenses, or reserves, the only place those funds can go is back to the member cities. What about 2006? Property/casualty premium rates will be lower for 2006. Through LMCIT property and liability premium rates our collective efforts, we have been successful in keeping dollar $20.00 –.....___ _ $0.20 loss costs relatively stable over the years. At the same time, city X $15.00 �-- -♦ - -• -� $0.15 expenditures have generally y $10.00 - . •-•' -- $0.10 a continued to grow. In simplest of terms, this means that a $5.00 $0.05 relatively smaller percentage of d $0.00 i + i i i + i + + + + + $0.0o a city dollars are needed to fund '92'93'94'95'96'97'98'99'00'01 02 '03'04'05'06 projected and actual losses, enabling LMCIT to reduce ■ Liability - -•—Property Property premium rates. We've also — reduced reinsurance costs by increasing the amount of risk LMCIT retains. This should save money in the long run,but it could also result in more variability in LMCIT's loss costs and in dividends in the future. Work comp premium rates will increase 5%. While this news isn't quite as good as a reduction in rates, it is noteworthy that this is our smallest rate increase in the past four years. Once again, the main factor driving the increase is medical costs. They've been rising sharply for several 2 years, and there's little reason to expect that trend LMCIT Work Comp Injuries to change soon. On the Average Medical Cost per Claim other hand, lower than projected loss costs for $6,000 ._ indemnity have partially $5,000 offset the increase in $4,000 medical costs. One note of $3,000 - concern is that we've seen very slight increases in the $2,000 frequency of employee $1,000 injuries during 2004 and $o , the first part of 2005. '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 We're not sure if that's just a blip on the radar screen or the first signs of a trend. In any event, it bears watching. At the end of the day of course,premium rates and dividends both depend on how many losses we have and how big they are. There is very real value to be found in working earnestly to prevent and control losses. Effective loss control requires both the support of the city's elected officials and the conscientious daily efforts of your city staff. The rate and dividend outlook this year attests to the fact that LMCIT member cities have been doing an outstanding job at this! Thank you and congratulations. Questions If you have any questions about your city's share of LMCIT dividends or our premium rates for 2006,please call Pete Tritz at 651-281 4265, or any of the members of the LMCIT Board. 3 OPEN MEETING LAW LMC League of Minnesota Cities DEFENSE COST Cities promoting excellence REIMBURSEMENT AGREEMENT PREPARED ESPECIALLY FOR CITY OF OAK PARK HEIGHTS 14168 OAK PARK BOULEVARD P.O. BOX 2007 STILLWATER, MN 55082 07/07/05 - 07/07/06 Agent: FOREST LAKE INSURANCE AGENCY DBA LANDMARK INSURANCE SVCS 232 SOUTH LAKE STREET FOREST LAKE, MN 55025-2605 League of Minnesota Cities 145 University Avenue West St. Paul, MN 55103-2044 Phone: (651) 281-1200 Fax: (651) 281-1298 Web Site http://www.lmnc.org a **IMPORTANT** PLEASE READ YOUR AGREEMENT AGREEMENT DECLARATIONS C'ovenartt Number: OPEN MEETING LAW DEFENSE COST OML 3726 REIMBURSEMENT AGREEMENT Coverage Is Provided By: LMC Previous Covenant Number: THE LEAGUE OF MINNESOTA CITIES OML 3375 INSURANCE TRUST League of Minnesota Cities (Herein called LMCIT) Cities promoting excellence Item 1. COVERED PARTY and MAILING ADDRESS: CITY OF OAK PARK HEIGHTS 14168 OAK PARK BLVD P.O. BOX 2007 STILLWATER, MN 55082 Item 2. COVERAGE PERIOD: 12:01 AM Standard Time at Mailing Address Indicated Above. From: 07/07/05 To: 07/07/06 Claims Made Item 3. RETROACTIVE DATE: November 09, 1994 Item4. THE COVERED PARTY IS: X City Joint Powers Entity Other(Describe) Item 5. REIMBURSEMENT LIMITS: A. "Reimbursable Costs": MAXIMUM 1. Defense Costs Per Lawsuit Per Official: $50,000. 2. Agreement Term Aggregate Per Official: $50,000. Item6. PREMIUM: $459. Item7. FORMS AND ENDORSEMENTS APPLICABLE TO AGREEMENT: OMLRA-1(11/04) OML-001(11/97) ME063(11/01) cut a Director,LM T LMCIT DEC-019(11-93)(Rev.11/99) Administered by:Berkley Risk Administrators Company,LLC OPEN MEETING LAW DEFENSE COST REIMBURSEMENT AGREEMENT I. OPEN MEETING LAW DEFENSE COST 4. The city and the city official shall at all times COVERAGE cooperate with and promptly respond to LMCIT's requests for information, investigative data, records, LMCIT will reimburse a city official for 80 percent of the or any other material documentation. defense costs incurred by the city official in defending an Open Meeting Law lawsuit, if the following conditions 5. The city official will be reimbursed only for defense are met: costs incurred with respect to legal services actually rendered and expenses actually incurred. 1. The date on which the Open Meeting Law lawsuit is commenced must be within the term 6. The city official shall have complete freedom to of this agreement; and; choose an attorney licensed in the State of Minnesota to provide the city official with legal 2. The date on which the violation took place or is services with respect to which defense costs are alleged to have taken place must be on or after reimbursable under this Agreement. the retroactive date, if any, shown in the Declarations. 7. It is the express intent of the parties to this Agreement that, neither the city nor the city official, An Open Meeting Law lawsuit is deemed to be waive any immunities, defenses, or limitations on commenced on the date the city official is served notice liability available under Minnesota statutes or of the lawsuit. common law. II. LIMITS 8. In the event that a city official makes a recovery of defense costs from any third party, LMCIT shall be The Open Meeting Law Defense Cost Reimbursement reimbursed for any payment it has made under this Agreement Limit is $50,000. This is the most LMCIT Agreement after the city official has been fully will reimburse any one city official for defense costs for reimbursed for his/her 20% share of the defense Open Meeting Law lawsuits commenced during the term costs. of this agreement, regardless of the number of lawsuits, the number of actual or alleged violations, or the date the 9. LMCIT may cancel this Agreement by mailing or defense costs are actually incurred. delivering written notice to the city at least: III.CONDITIONS AND EXCLUSIONS a. Ten (10) days before the effective date of cancellation for nonpayment of the charge for this 1. The term of this Agreement shall be one year Agreement; or beginning with the effective date stated in the Declarations. Subsequent renewals of this b. Thirty (30) days before the effective date of Agreement shall be treated as separate terms. cancellation for any other reason. 2. LMCIT shall have no duty to provide a defense to a If LMCIT decides not to renew this Agreement, city official with respect to a legal action against that LMCIT will mail or deliver to the city written city official seeking penalties based upon an alleged notice of non-renewal not less than thirty 30 violation of the Minnesota Open Meeting Law; days before the expiration date. however, LMCIT shall have the right to intervene at its expense in the investigation or defense of such 10. It is mutually understood and agreed that the city and legal action. all other LMCIT pool participants are jointly and severally liable for all claims and expenses of the 3. The city or the city official shall give prompt notice pool. The amount of any liabilities in excess of to LMCIT of any actual or threatened legal action assets may be assessed to LMCIT pool participants against the city official seeking penalties against the when a deficiency is identified. city official for an alleged violation of the Minnesota Open Meeting Law. LMCIT OMLRA-I(11/93)(Rev.]1/04) Page 1 of2 p IV.DEFINITIONS 6. "Open Meeting Law lawsuit" means a lawsuit seeking penalties against a city official based on an 1. "City" means the city or other governmental body or allegation that the city official has violated entity first named in the Declarations. Unless M.S.13D.01- 13D.07, commonly known as the specifically named in the Declarations, city shall not Minnesota Open Meeting Law. include a gas, electrical, or steam utilities commission; port authority, housing and redevelopment authority, economic development authority, area or municipal redevelopment authority, or similar agency; municipal power agency; municipal gas agency; hospital or nursing home board or commission; airport commission; welfare or public relief agency; school board; or joint powers entity. 2. "City official" means any former or present elected or appointed official of the city or any present or former employee of the city. 3. "Defense costs" means reasonable and necessary attorney fees, court costs, court reporter and transcript fees, general witness and expert witness fees and expense, and similar defense related costs. Defense costs does not include any fines or penalties, or any attorney's fees awarded to a plaintiff in a suit charging a violation of the Open Meeting Law. 4. "Joint powers entity" means an operating entity created by two or more governmental units entering into an agreement as provided by statute for the joint exercise of governmental powers. An intergovernmental agreement will be deemed to create a joint powers entity if the agreement establishes a board with the effective power to do any of the following, regardless of whether the specific consent of the constituent governmental units may also be required: a. To receive and expend funds; b. To enter into contracts; c. To hire employees; d. To purchase or otherwise acquire and hold real or personal property; or e. To sue or be sued. 5. "LMCIT' means the League of Minnesota Cities Insurance Trust. LMCIT OMLRA-1(1 1/93)(Rev.11/04) Page 2 of 2 OPEN MEETING LAW DEFENSE COST REIMBURSEMENT AGREEMENT REIMBURSEMENT PARTICIPATION ENDORSEMENT It is understood and agreed that Section I. Open Meeting Law Defense Cost Coverage is amended to modify the percentage of reimbursement of a "defense costs" from 80% to 100%. This modification does not change the maximum amount of reimbursement as specified in Section II. Limits and as shown in the Agreement Declarations. All other terms and conditions remain unchanged. OML-001(11/97) Definition of City Endorsement It is understood and agreed that city is amended to include: ECONOMIC DEVELOPMENT AUTHORITY All other terms and conditions remain unchanged. LMCIT Page 1 of 1 ME063(11/95)(Rev. 11/01) Common Conditions All coverage parts included in this covenant are subject to the following conditions: 1. CANCELLATION AND NON-RENEWAL The first "city" shown in the Declarations is authorized to make changes in the terms of this a. The first "city" shown in the Declarations may cancel coverage agreement with the consent of LMCIT. this covenant by mailing or delivering to LMCIT advance The coverage terms can be amended or waived only written notice of cancellation. by endorsement issued by LMCIT and made a part of this covenant or by acknowledgement by LMCIT that b. LMCIT may cancel this covenant by mailing or an endorsement will be issued at a later date. delivering to the first "city" shown in the Declaration a e written 3. RATING AUTHORITY AND page, of cancellation at least: EXAMINATION OF "YOUR" BOOKS AND (1) 10 days before the effective date of the RECORDS cancellation if LMCIT cancels for nonpayment of premium; or LMCIT shall have full discretionary authority to (2) 30 days before the effective date of the promulgate rates and establish the premium to be cancellation if LMCIT cancels for any other charged for the coverage provided under this reason. covenant. LMCIT may at its discretion or at "your" request examine and audit "your" books c. LMCIT will mail or deliver its notice to the first "city" as they relate to this covenant during the shown in the Declaration's last mailing address known to coverage period and up to one year thereafter LMCIT. and accordingly make any necessary adjustments • in premium. No premium adjustments will be d. Notice of cancellation will state the effective date of made after one year following the expiration of cancellation. The coverage period will end on that date. the coverage period. e. If this covenant is cancelled, LMCIT will send the first 4. INSPECTIONS AND SURVEYS "city" shown in the Declaration any premium refund due. If LMCIT cancels, the refund will be pro-rata. If the first "city" cancels, the refund may be less than pro-rata. The LMCIT has the right, but it is not obligated to: cancellation will be effective even if LMCIT has not made or offered a refund. a. Make inspections and surveys at any time. f. If "we" decide not to renew this covenant "we" will mail or deliver to the first "city" shown in the b. Give the "city" reports on the conditions it Declarations written notice of the non-renewal not less finds; and than 30 days before the expiration date. c. Recommend changes. g. If notice is mailed, proof of mailing will be sufficient proof of notice. Neither LMCIT's right to make inspections nor its making any report thereon shall constitute any 2. CHANGES undertakin g on behalf of or for the benefit of the "city" or others to determine or warrant that such This covenant contains all the agreements between property or operations are safe or healthful or free LMCIT and "you" concerning the coverage afforded. from hazard or are in compliance with any law, rule or regulation. LMCIT CCM(11-89)(Rev. 11-95) 1 of 3 A t These conditions apply not only to LMCIT, but also to The terms of the covenant, including those with any rating advisory, rate service, or similar organization respect to: , which makes inspections, surveys, reports, or , recommendations. (a)the LMCIT's rights and duties with respect to the defense of suits; and 5. PREMIUMS (b)the "covered party's" duties, in the event of The first "city" shown in the Declarations: an occurrence, apply irrespective of the application of the deductible amount. a. Is responsible for the payment of all premiums; and LMCIT may pay any part or all of the deductible amount to effect settlement of any claim or suit and b. Will be the payee for any return premiums. upon notification of the action taken, the first "city" shall promptly reimburse LMCIT for such part of the 6. TRANSFER OF "CITY'S" RIGHTS AND deductible amount as has been paid by LMCIT. DUTIES UNDER THIS COVENANT 9. ASSESSIBILITY The "city's" rights and duties under this covenant may not be transferred without the written consent of LMCIT. All "cities" in the joint coverage pool are jointly and severally liable for all claims and expenses of the 7. OVERLAP OF COVERAGE pool. The amount of any liabilities in excess of assets may be assessed to the members of the pool In the event of a dispute between LMCIT and one or when a deficiency is identified. more insurers as to which policy or coverage agreement 10. SEPARATION OF "COVERED applies to a covered loss, LMCIT shall indemnify the PARTIES" "city" for any legal or other expenses which are necessarily incurred by the "city" in determining whether LMCIT or the insurer(s) shall bear the loss. Such As respects the particulars and statements contained indemnification shall be made only if it is determined that in the application for this coverage and the exclusion 0 payment of the loss shall be made under this covenant. set forth herein, this coverage shall be construed as a If the loss is shared by LMCIT and one or more insurers, separate agreement with each "covered party". indemnification shall be made in the same proportion as Nothing in this paragraph shall be construed to the loss payment. The "city" and LMCIT shall cooperate increase LMCIT's maximum liability set forth in the in the development and execution of reasonable Declarations. procedures to resolve the dispute. 11. NUCLEAR HAZARD 8. DEDUCTIBLES LMCIT under this covenant does not cover any loss LMCIT shall be liable to the "city" or to others on behalf or claim for damage that is caused in part or in total of the "city" only to the amount of damages in excess of by nuclear reaction or radiation, or radioactive any deductible amounts. contamination, however, caused. For purposes of this section, damages include defense 12. CONCEALMENT OR FRAUD costs. Defense costs means those costs which are allocated to each claim to include attorneys' fees, court This covenant is void if any "covered party" has costs, court reporting and transcript fees, the cost of intentionally concealed or misrepresented any obtaining records, general witness and expert witness fees material fact or circumstance relating to this and expenses and similar defense related costs. Damages covenant. do not include claim adjuster fees that are not allocated to each claim. M LMC[TCCM(I1-89)(Rev. 11-95) 2of3 L__ 13. OTHER COVERAGE This coverage is excess over any other valid and collectible insurance policy or other coverage whether primary, excess, contingent, or any other basis, except other coverage written specifically to be excess over this coverage. LMCIT CCM(11-89)(Rev. I1-95) 3 of 3 4 i • COMPREHENSIVE MUNICIPAL COVERAGE Various provisions in this covenant restrict The words "city" and "covered party" are coverage. Read the entire coverage agreement defined under SECTION II - WHO IS carefully to determine rights, duties and what is and COVERED. is not covered. Throughout this covenant the word "city" refers to the first "city" shown in the Other words and phrases that appear in italics Declarations. The word LMCIT refers to the have special meaning, as given in SECTION IV League of Minnesota Cities Insurance Trust. - DEFINITIONS. SECTION I - COVERAGES COVERAGE A. MUNICIPAL LIABILITY 2. CLAIM AND OCCURRENCE DATES COVERAGE (CLAIMS MADE BASIS) a. For any claim for damages, the date of the I. COVERAGE AGREEMENT occurrence shall be deemed to be as follows: a. Except as otherwise provided in this agreement, (1) For claims for bodily injury or property LMCIT will pay on behalf of the "covered party" damage, the date of the occurrence is the all sums which the "covered party" shall become date on which the bodily injury or property legally obligated to pay as damages as a result of an damage first took place or is alleged to have occurrence, if the following conditions are met: taken place. (I) The claim for such damages must be first (2) For any other claim for damages, the • made against the "covered party" during the date of the occurrence is the date on which coverage period; and the wrongful act giving rise to the claim for damages took place or is alleged to have (2) The date of the occurrence giving rise to the taken place. If the damages are alleged to claim for damages must be on or after the have arisen from a series of wrongful acts retroactive date, if any, shown in the the date of the occurrence is deemed to be Declarations; and the date when the first such wrongful act took place or is alleged to have taken place. (3)The occurrence must have taken place in the If both (1) and (2) apply to claims for damages coverage territory. arising from a single occurrence, the date of the b. LMCIT will have the right and duty to defend occurrence is the earlier of the dates defined by any such claim or suit seeking damages. LMCIT (1) and (2), respectively. may, at its discretion, investigate any actual or potential claim; and unless the "city" has given b For any claim for damages, the date the notice as provided in Section VI, 7, below, LMCIT claim is made is deemed to be as follows: may settle any claim or suit. • (1) For any employment liability claim, c. The amount LMCIT will pay for damages is the claim is deemed to have been made on limited as described in SECTION III - LIMITS OF the earliest of: COVERAGE. LMCIT CMC(11-86)(Rev. 11-96) 1 of 20 (a) The date the claimant files a charge in the course of employment by the "city"; with the Federal Equal Employment or Opportunity Commission, the • Commissioner of the Minnesota (2) Damages to the spouse, child, parent, Department of Human Rights,or a local brother or sister of that employee as a human rights commission as defined in consequence of(1)above. Minn. Stat.§363.01, subd. 23, whichever comes first; or This exclusion applies: (b) The date when notice of claim for (1) Whether the "city" may be liable as an damages is received by any covered employer or in any other capacity; and parry or by LMCIT, whichever comes first. (2) To any obligation to share damages with or repay someone else who must pay (2) For any other claim for damages, the claim damages because of the injury. is deemed to have been made when notice of such claim is received and recorded by any This exclusion does not apply to liability "covered party" or by LMCIT, whichever comes assumed by the "covered party" under a covered first. contract. (3) All claims for damages arising from a single d. Any loss, cost, or expense arising out of any occurrence will be deemed to have been made at direction, demand, or request by the the time the first of those claims is made against government or any other entity that the "city" or any "covered party". any other entity test for, monitor, clean up, remove, contain, treat, detoxify or neutralize 3. EXCLUSIONS pollutants; or arisin out of the actual, alleged or • This coverage does not apply to: Damages arising � g threatened discharge, dispersal, seepage, a. Damages for which the "covered party" is liable migration, release or escape of pollutants: by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to (1) At or from premises the "city" owns, liability for damages: rents, leases, uses, or occupies, and premises the "city" no longer owns, rents, leases, (1) Assumed in a contract or agreement that is a uses, or occupies; covered contract; or (2) At or from any landfill, dump, or other (2) The "covered party" would have in the site or location presently or formerly used by absence of the contract or agreement. or for the "city" or others for the handling, storage, disposal, processing or treatment of b. Damages for which the "covered party" may be pollutants; liable by reason of the Minnesota Civil Damages - Act (M.S. 340A.801-340A.802), or any other law (3) Which are or were at any time governing liability for illegal sales of alcoholic transported, handled, stored, treated, beverages. disposed of, or processed as waste by or for the "city" or any person or organization for c. Bodily injury to: whom the "city" may be legally responsible; or (1) An employee of the "city" arising out of and (4) At or from any site or location on which • LMCIT CMC(11-86)(Rev. 11-96) 2 of 20 the "city" or any contractors or subcontractors (b) Not being used to carry persons or • working directly or indirectly on the "city's" property for a charge; behalf are or have been performing operations; (3) Parking an auto on, or on the ways next (a) If the pollutants are brought on or to the to, premises the "city" owns or rents, site or location in connection with such provided the auto is not owned by or rented operations; or or loaned to the "covered party". (b) If the operations are to test for, monitor, f. Damages due to war, whether or not clean up, remove, contain, treat, detoxify or declared, or any act or condition incident to neutralize the pollutants. war. War includes civil war, insurrection, rebellion or revolution. This exclusion does not apply to any of the - following: . g. Property damage to: (1) Any Limited Pollution Liability Claim. (1) Property the "city" owns, rents, or occupies; (2) Any claim arising out of the discharge or dispersal of mace, tear gas or similar agent, if (2) Premises the "city" sells, gives away or such discharge was for the purpose of protecting abandons, if the property damage arises out persons or property or incident to an arrest. of any part of those premises; (3) Any lead or asbestos claim, unless the actual, (3) Property loaned to a "covered party"; alleged, or threatened discharge, dispersal, release, escape, use, distribution, or handling of (4) Personal property in the care, custody • lead or asbestos took place at or from any and control of any "covered party", except landfill, dump, or other site or location presently for personal property of others which comes or formerly used by or for the "city" or others into the care, custody, and control of police, for the handling, storage, disposal, processing or fire, or emergency medical services treatment of pollutants. personnel in the course of performing public safety services; (4) Any damages arising out of heat, smoke, or fumes from a hostile fire. A hostile fire is a fire (5) That particular part of real property on which becomes uncontrollable or breaks out from which the "city" or any contractors or where it was intended to be. subcontractors working directly or indirectly on the "city's" behalf are performing e. Damages arising out of the ownership, operations, if the property damage arises out maintenance, use or entrustment to others of any of those operations; or aircraft, auto or watercraft owned or operated by or rented or loaned to any "covered party". Use (6) Work performed by or on behalf of the includes operation and loading or unloading. "city" arising out of your work or any portion thereof, or out of materials, parts or This exclusion does not apply to: equipment furnished in connection therewith; (1) A watercraft while ashore on premises the (7) Your product arising out of it or any part "city" owns or rents; of it. (2) A watercraft that is: Paragraph (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a • (a) Less than 26 feet long; and sidetrack agreement. LMC1T CMC(11-86)(Rev. 11-96) 3of20 This exclusion does not apply to property damage which the "city" participates. by fire to premises rented to the "city". A separate limit of coverage applies to this coverage as (2) Architect • described in SECTION III - LIMITS OF COVERAGE. (3) Doctor of Medicine h. Damages claimed for any loss, cost or expense (4) Dentist incurred by the "city" or others for the loss of use, withdrawal, recall, inspection, repair, replacement, (5) Nurse, except with respect to those adjustment, removal or disposal of: activities in the capacity of an emergency medical technician or first responder. (1) Your product; (6)Pharmacist (2) Your work; or m. Damages arising out of the failure or (3) Impaired property; bursting of any: if such product, work, or property is withdrawn or (1) Class I or Class II dam as classified by recalled from the market or from use by any person the Commissioner of the Department of or organization because of a known or suspected Natural Resources pursuant to Minnesota defect, deficiency, inadequacy or dangerous Rules Section 6115.0340; or condition in it. (2) Any dike, levee or similar structure. i. Bodily injury to any volunteer while acting on behalf of the "city" if the volunteer is an employee n. Damages arising out of the "city's" within the meaning of a Workers Compensation law ownership, sponsorship or operation of: or similar law, or is covered under a voluntary • endorsement to a Workers Compensation insurance (1) Motorized amusement devices if the policy. power supply motor is rated at greater than 5 horsepower; j. Damages for bodily injury, property damage or personal injury arising out of the "city's" (2) Any mobile equipment, automobile, ownership, operation or maintenance of any airport. snowmobile or motorcycle in any racing, pulling, pushing, speed, or demolition k. Damages for bodily injury, property damage or contest or in any stunting activity; personal injury arising out of the "city's" ownership, operation or maintenance of any (3) Rodeos; or , hos ital nursing home or medical clinic. P 8 (4) Fireworks displays or exhibitions. 1. Damages arising out of the rendering of or failure to render professional services by any o. Damages arising from or relating to the professional listed below: detention or confinement of any person(s) in any jail, holding cell or similar detention (1) Attorney, unless the attorney is an employee facility, which the "city" owns, operates or of the "city" and not an independent contractor, maintains, if the date of the occurrence causing and the professional services are within the scope such damages takes place after a continuous of the attorney's duties as a "city" employee, detention or confinement period of 30 days, or including professional services performed for in any detention facility which is intended and gP Y Y P any of the "city's" boards, commissions, regularly used for confinement of persons for authorities or agencies, or joint powers entities in periods in excess of 30 days; • LMCIT CMC(I I-86)(Rev. I I-96) 4 of 20 w p. Damages arising out of the activities of any of COVERAGE B. MEDICAL AND • the followin B "city" boards, commissions, or RELATED ED PAYMENTS agencies: 1. Gas, electrical or steam utilities commission; 1. COVERAGE AGREEMENT 2. Port authority, housing and redevelopment LMCIT will pay to or for each person who sustains bodily injury accident all authority, economic development authority area ry caused by or municipal redevelopment authority, or similar reasonable medical and related upense incurred within one year from the date of the accident as agency; a result of such bodily injury provided such 3. Munici al power a en or bodily injury arises out of a condition in the P Pte' g �' covered premises. 4. Municipal gas agency; 2. EXCLUSIONS unless such board, commission, authority, or agency is named in the Declarations, in which case LMCIT will not pay expenses for bodily injury: the "city" will also be covered to the extent of coverage provided under this covenant to the named a. Arising out of the operation or use of any designed for use i d il snowmobile or trailer es board, commission, authority or agency for snowmo g damages arising out of the activities of the therewith; respective named board, commission, authority or agency. b. Included within the completed operations hazard or the products hazards; q. Damages arising out of the activities of a joint powers entity unless the joint powers entity is named c. Arising out of operations performed for the li p a p ty "city" by an independent contractor other than: in the Declarations. r. Damages arising out of any obligations imposed (1) Maintenance and repair of the covered or imputed to any "covered party" under the premises; or Employee Retirement Income Security Act of 1974 (2) Structural alterations at such premises and any law amendatory thereof; O P which do not involve changing the size of or s. Damages arising out of condemnation, inverse moving buildings or other structures; condemnation, adverse possession, or dedication by adverse use. This exclusion does not apply to any d. To any tenant or other person regularly claim for taking of property wherein the taking of residing on the covered premises; property is incident to an arrest or for the purpose of protecting persons or property in an emergency. e. To any other tenant if the bodily injury occurs on that part of the covered premises t. Any criminal proceedings or proceedings under rented from the "city"; the open meeting law against any "covered party". f. To any person while engaged in maintenance u. Damages with respect to any claim(s) made by and repair of the covered premises or alteration, LMCIT or the "city" against any other "covered demolition or new construction at such party". premises; ► v. Any claim for damages asserted in any land use or development litigation. • LMCIT CMC(I 1-86)(Rev. 11-96) 5 of 20 • g. To any person practicing, instructing or and as often as LMCIT may reasonably require. participating in any physical training, sport, athletic LMCIT may pay the injured person or any activity or contest whether on a formal or informal person or organization rendering the services • basis; and the payment shall reduce the amount payable hereunder for such injury. Payment h. To a member or guest of any club, tourist court hereunder shall not constitute an admission of or trailer park operated or owned by the "city"; liability of any "covered party" or of LMCIT. i. For any injury for which the injured party has COVERAGE C. AUTOMOBILE received or is entitled to receive workers LIABILITY - BODILY INJURY AND compensation benefits. PROPERTY DAMAGE The exclusions of the Municipal Liability Coverage 1. COVERAGE AGREEMENT Part (Coverage A) also apply to this Coverage Part as respects bodily injury. LMCIT will pay on behalf of the "covered 3. ADDITIONAL DEFINITIONS party" all sums which the "covered party" shall become legally obligated to pay as damages When used herein: because of bodily injury or property damage to which this coverage applies, caused by an Covered premises means all premises owned or occurrence and arising out of the ownership, rented to the "city" with respect to which the "city" maintenance or use, including loading or is afforded coverage for bodily injury liability under unloading, of any automobile. This coverage includes the ways immediately applies only to bodily injury or property damage a this covenant, and t Y which occurs during the coverage period and adjoining on land; however, covered premises does within the covered territory. not include streets, sidewalks, or boulevards that do not abut a "city"-owned building or "city"-owned LMCIT will h ave th e right and duty to defend •parking lot. any suit seeking those damages. However: Medical and related expense means expenses for a. The amount LMCIT will pay for damages necessary medical, surgical, x-ray and dental is limited as 'described in SECTION III - services, including prosthetic devices, necessary LIMITS OF COVERAGE; ambulance, hospital, professional nursing and funeral services, and replacement or repair of b. LMCIT may, at its discretion, investigate damaged eye glasses or clothing. g any occurrence and settle any claim or suit 4. ADDITIONAL CONDITION MEDICAL that may result. REPORTS; PROOF AND PAYMENT OF 2. EXCLUSIONS CLAIM. This coverage does not apply to: As soon as practicable the injured person or someone on his behalf shall give to LMCIT written a. Any obligation for which the "covered party" proof of claim, under oath if required, and shall, or any carrier as his insurer may be held liable after each request from LMCIT, execute under any workers' compensation, authorization to enable LMCIT to obtain medical unemployment compensation or disability reports and copies of records. benefits law, or under any similar law; The injured person shall submit to physical "city" may have for bodily J b. Any liability the city m y y examination by physicians selected by LMCIT when injury to: • LMCIT CMC(11-86)(Rev. 11-96) 6 of 20 (1) An employee of the "city" arising out of and any other entity that the "city" or any other • in the course of employment by the "city"; or entity test for, monitor, clean up, remove, • contain, treat, detoxify or neutralize pollutants; (2)Damages to the spouse, child,parent,brother or or sister of that employee as a consequence of(1) above. Damages arising out of the actual, alleged or threatened discharge, dispersal, seepag e, This exclusion applies: migration, release or escape of pollutants: (1) Whether the "city" may be liable as an (l) At or from premises the "city" owns, employer or in any other capacity; and rents, leases, uses, or occupies, and premises Y P P the "city" no longer owns, rents, leases, (2) To any obligation to share damages with or uses, or occupies; repay someone else who must pay damages because of the injury. (2) At or from any landfill, dump, or other site or location presently or formerly used by This exclusion does not apply to liability assumed or for the "city" or others for the handling, by the "covered party" under a covered contract. storage, disposal, processing or treatment of pollutants; c. Property damage: (3) Which are or were at any time (1) To property owned or being transported by transported, handled, stored, treated, the "covered party"; or disposed of, or processed as waste by or for the "city" or any person or organization for (2) To property rented to or in the care, custody whom the "city" may be legally responsible; • or control of the "covered party", or as to which or. the "covered party" is for any purpose exercising physical control, other than: (4) At or from any site or location on which the "city" or any contractors or a. Property damage to a residence or private subcontractors working directly or indirectly garage by a private passenger automobile on the "city's" behalf are or have been covered by this covenant; or performing operations; b. Property damage to an automobile that is (a) If the pollutants are brought on or rented by the covered party on a weekly or to the site or location in connection daily basis and is used for "city" business. with such operations; or c. Personal property of others which comes (b) If the operations are to test for, into the care, custody, and control of police, monitor, clean up, remove, contain, fire, or emergency medical services personnel treat, detoxify or neutralize the in the course of performing public safety pollutants. services; This exclusion does not apply to any of the d. Bodily injury due to war, whether or not following: declared, civil war, insurrection, rebellion or revolution or to any act or condition incident to any (1) Any Limited Pollution Liability Claim. of the foregoing; e. Any loss, cost, or expense arising out of any P g Y • direction, demand, or request by the government or LMCIT CMC(11-86)(Rev. 11-96) 7 of 20 (2) Any claim arising out of the discharge or private passenger or station wagon type dispersal of mace, tear gas or similar agent, if automobile. such discharge was for the purpose of protecting • persons or property or incident to an arrest. Trailer includes semi-trailer but does not include mobile equipment. (3)Any lead or asbestos claim unless the actual, alleged, or threatened discharge, dispersal, COVERAGE D. LAND USE OR release, escape, use, distribution, or handling of DEVELOPMENT LITIGATION lead or asbestos took place at or from any landfill,dump, or other site or location presently I. COVERAGE AGREEMENT or formerly used by or for the "city" or others for the handling, storage, disposal, processing or For any land use or development litigation treatment of pollutants. which is first filed or served against the "city" or a "city" officer or employee during the (4) Any damages arising out of heat, smoke, or annual coverage period of this agreement, fumes from a hostile fire. A hostile fire is a fire LMCIT will pay the following on the "city's" which becomes uncontrollable or breaks out from behalf: where it was intended to be. a. 100% of the first $50,000 of defense costs, f. Liability assumed under any contract or 85% of the next $200,000 of defense costs, and agreement, but this exclusion does not apply to 60% of any defense costs in excess of liability assumed under a covered contract. $250,000; and 3. ADDITIONAL DEFINITIONS b. 85% of any damages which the "city" shall be required to pay. These additional definitions apply for purposes of Coverage C: The amount LMCIT will pay for damages and defense costs for land use or development Automobile business means the business or litigation covered under this section is limited as occupation of selling, repairing, servicing, storing described in SECTION III - LIMITS OF or parking automobiles; COVERAGE. Hired automobile means an automobile not owned The amount LMCIT pays for damages or by the "city" which is used under contract on defense costs for land use or development behalf of, or loaned to, the "city", provided such litigation is subject to the Municipal Liability automobile is not owned by (a) a partner or Deductible shown in the Municipal Liability executive officer of the "city" or(b)an employee or Declarations or the General Annual Aggregate agent of the "city" who is granted an operating Deductible if any shown in the Common allowance of any sort for the use of such Coverage Declarations. automobile. 2. LITIGATION MANAGEMENT Non-owned automobile means an automobile which is neither an owned automobile nor a hired For any land use or development litigation, automobile. defense counsel will be selected by mutual agreement of the "city" and LMCIT. If LMCIT Owned automobile means an automobile owned by and the "city" are not able to agree on selection the "city". of counsel, LMCIT will provide a list of five defense attorneys experienced in land use or Private passenger automobile means a four wheel development litigation matters; and the "city" will select defense counsel from that list. • LMCIT CMC(11-86)(Rev. 11-96) 8 of 20 • A land use or development litigation suit both LMCIT and the "city". • may not be settled without the approval of SECTION II - WHO IS COVERED *City" "city"1. City means the city or other governmental (6) Other authorized person or agent of the "city" while acting on behalf of the body or entity first named in the Declarations ty ing � tY in the Declarations, *city", but excluding Unless specifically named i m8 independent "city* shall not include any of the following: contractors; y g a. Gas, electrical or steam utilities commission; (7) "City" relief association and its officers, and employees. members, o em P b. Port authority, housing and redevelopment authority, economic development authority, area (8) Person while acting in the or municipal redevelopment authority or similar administrative capacity of medical P P agency; director or medical advisor to the "city" ambulance service. c. Municipal power agency; c. With respect to a joint powers entity named in Municipal gas agency; the Declarations: d. P 8 e. Welfare or public relief agency; (1) The joint powers entity; f. School board; or (2) While acting on behalf of the joint powers entity, or with respect to liability g. Joint powers entity. arising out of the activities of the joint powers entity, any present or former: 2. For purposes of Coverage A, "covered party" means: (a) Governmental member of the joint powers entity; a. The "city", and any other entity named in the Declarations; (b) Elected or appointed official of the governmental member; b. For actions within his duties as such, any present or former: (c) Employee of the governmental member; (1) Member of the "city" council; (d) Other authorized person or agent of (2)Member of a "city" board,commission, or the governmental member, but excluding committee which is not excluded by the independent contractors. definition of"city"; 3. For purposes of Coverage C, "covered (3) Elected or appointed official of the "city"; party" means: (4) Employee of the "city"; a. The "city", and any other entity named in the Declarations; (5) Volunteer person or organization while acting on behalf of the "city" and subject to b. Any present or former elected or the "city's" direction and control; appointed official or employee of the "city" • LMCIT CMC(11-86)(Rev. 11-96) 9 of 20 with respect to a non-owned automobile only while For purposes of Coverage C, none of the such automobile is or was being used in the business following is a "covered party": of the "city"; a. An elected or appointed official or c. Any other person while using an owned employee of the "city" with respect to an automobile or a hired automobile with the automobile owned by a member of his permission of the "city", provided his actual household unless such automobile is operation or (if he is not operating) his other specifically described in this covenant; actual use thereof is within the scope of such permission, but with respect to bodily injury or b. Any person or organization, other than property damage arising out of the loading or the "city", with respect to: unloading thereof, such other person shall be a "covered party" only if he is or was: (1) A motor vehicle while used with any trailer owned or hired by such person or (1) A lessee or borrower of the automobile; or organization and not covered by LMCIT (except a trailer designed for use with a (2) An employee of the "city" or of such private passenger automobile and not lessee or borrower; being used for business purposes with another type of motor vehicle); or d. A present or former firefighter with respect to any automobile while such automobile is or was (2) A trailer while used with any motor being used in the performance of his official vehicle owned or hired by such person or duties; organization and not covered by LMCIT. e. Any other person or organization but only c. Any person while employed in or with respect to his or its liability because of acts otherwise engaged in duties in connection or omissions of a "covered party" under (a), (b) with an automobile business, other than an • or (c) above. automobile business operated by the "city". SECTION III - LIMITS OF COVERAGE occurrence or sudden occurrence whether the 1. The limits of coverage shown in the Declarations claim or claims fall under Coverage A, and the rules below fix the most LMCIT will pay as Coverage C, or both. damages under each coverage part regardless of the number of: 3. The Products-Completed Operations Annual Aggregate Limit is the most LMCIT will pay a. "Covered Parties"; under Coverage A for damages included in the products-completed operations hazard. b. Claims made or suits brought; or 4. The Fire Damage Limit is the most LMCIT c. Persons or organizations making claims or will pay under Coverage A for damages bringing suits. because of property damage to premises rented to the "city" arising out of any one fire. 2. LMCIT's maximum limit of liability for Coverages A and C combined shall be $600,000 per 5. The Medical Expense Limit is the most LMCIT will pay under Coverage B for all medical expenses because of bodily injury sustained by any one person, and the occurrence aggregate limit is the most LMCIT will pay • LMCIT CMC(11-86)(Rev. 11-96) 10 of 20 under Coverage B for all medical expenses because damages for all land use or development of bodily injury to two or more persons resulting litigation which is first filed or served against • from one occurrence. the "city" during the annual coverage period of this agreement shall not exceed 51,000,000, 6. The Limited Pollution Liability Annual regardless of the number of suits, defendants, or Aggregate Limit is the most LMCIT will pay for claimants. limited pollution liability claims during the annual coverage period. The Limited Pollution Liability 11. LMCIT shall not be obligated under this Annual Aggregate limit applies to the sum of covenant to pay any claim or judgment or to damages and loss adjustment expense, including defend any suit after the applicable limit of defense costs. LMCIT's liability under Coverages A or C has been exhausted by payment of judgments or 7. The Lead or Asbestos Claim Annual Aggregate settlements or by tender to any excess carrier or Limit is the most LMCIT will pay for lead or excess coverage including excess coverage asbestos claims during the annual coverage period. provided by LMCIT. The Lead or Asbestos Claim Annual Aggregate Limit applies to the sum of damages and loss 12. For any Annual Aggregate Limit shown in adjustment expense, including defense costs. the Declarations, the limit shall apply separately to each consecutive annual period and to any 8. The Failure to Supply Annual Aggregate Limit is remainin g period of less than 12 months, the most LMCIT will pay for damages for failure to starting with the beginning of the coverage supply claims during the annual coverage period. period shown in the Declarations, unless the coverage period is extended after issuance for i ' period of less n 12 months. In 9. The EMF Annual Aggregate Limit is the most an additional pe 1od o es ha 1 m nths LMCIT will pay for damages for EMF claims that case, the additional period will be deemed during the annual coverage period. part of the last preceding period for purposes of • determining the limits of coverage. 10. LMCIT's total liability for defense costs and SECTION IV - DEFINITIONS 1. Automobile (Auto) means a land motor vehicle, travel or transportation to or from any place trailer or semi-trailer designed for travel on public not included in a. above; or roads, including any attached machinery or equipment. But automobile does not include mobile c. All parts of the world if: equipment. (1) The injury or damage arises out of: 2. Bodily injury means bodily injury, sickness or disease sustained by a person, including death (a)Goods or products made or sold by resulting from any of these at any time. the "city" in the territory described in a. above; or 3. Coverage territory means: (b) The activities of a person whose a. The United States of America (including its home is in the territory described in a. territories and possessions), Puerto Rico and above, but is away for a short time on Canada; the "city's" business; and b. International waters or airspace, provided the (2)The "covered party's" responsibility to injury or damage does not occur in the course of pay damages is determined in a suit on • LMCIT CMC(11-86)(Rev. 11-96) 11 of 20 the merits, in the territory described in a. that enforcement of a land use, zoning, above or in a settlement LMCIT agrees to. subdivision, or similar ordinance or regulation constitutes a taking of private property. 4. Covered contract means ... Damages does not include any of the following: .. an indemnification of a municipality as required by ordinance, or that part of any a. Any obligation of a "covered party" under contract or agreement pertaining to the "city's" a workers' compensation, disability benefits, business under which the "city" assumes the tort or unemployment compensation law or any liability of another to pay damages to a third similar law; person or organization, if the contract or agreement is made prior to the date of the b. Exemplary damages or punitive damages occurrence giving rise to the damages. Tort except punitive damages claimed or levied liability means a liability that would be imposed against an officer, employee or volunteer of by law in the absence of any contract or the "city", provided that the officer, agreement. employee or volunteer: Covered contract does not include that part of any (1) Was acting in the performance of the contract or agreement: duties of the position; and a. That indemnifies an architect, engineer or (2) Was not guilty of malfeasance in surveyor for injury or damage arising out of: office, willful neglect of duty, or bad faith. (1)Preparing, approving or failing to prepare or approve maps, drawings, opinions, reports, c. Fines or penalties imposed by law. surveys, change orders, designs or specifications; or d. Injunctive or equitable relief, or quasi-judicial or administrative orders. (2)Giving directions or instructions, or failing to give the same, if that is the primary cause e. Repayment of any tax, assessment, fee, or of the injury or damages; other charge that was wrongfully obtained, or any interest on, or any other amount "city's" er claimed for loss of use of, such tax, Under which the architect, engineer , � 8 r assessment, fee, or other charge. or surveyor, assumes liability for injury o arg damages arising out of the "city's" rendering or failing to render professional services, including f. Amounts paid or payable for the purchase those listed in a. above and supervisory, or permanent acquisition of property or inspection or engineering services; or property rights, or for the right to permanently enforce an ordinance, c. That indemnifies any person or organization regulation, or restriction on the use of for damages by fire to premises rented or loaned property. to the "city". g. Amounts due under the terms of any 5. Damages means money damages, and includes contractual obligation, except for liability: awards for attorneys' fees with respect to federal civil rights suits and state human rights suits. With (1) assumed in a covered contract; or respect to any land use or development litigation, damages also includes amounts the "city" is (2) assumed in an employment contract obligated to pay for loss of use of property during between the "city" and its employees. the time prior to a final determination by the court • LMCIT CMC(11-86)(Rev. 11-96) 12 of 20 h. Any wages and employment benefits for work c. To hire employees; that has been performed by the employee making the claim, or any claimed increases in such d. To purchase or otherwise acquire and wages and employment benefits for work that is hold real or personal property; or hereafter performed by the employee making the dim. e. lb sue or be sued. 6. F1lsF claim means any claim for damages arising 10. Land use or development litigation means: out of the actual or alleged exposure to electromagnetic fields, electromagnetic radiation or a. Any litigation relating to the application stray voltage. or interpretation of a land use, zoning, subdivision, or similar ordinance or 7. Failure to supply claim means any claim for regulation; or damages arising out of the complete or partial failure to supply water, electricity, gas or steam. b. Any litigation relating to the "city's" involvement in the financing or approval of 8. Impaired property hmeans tangible property, any develo ment or redevelopment project. other than your product or your work, that cannot be used or is less useful because: Any litigation meeting the criteria listed above will be considered to be land use or a. It incorporates your product or your work that development litigation in its entirety, regardless is known or thought to be defective, deficient, of whether the litigation may assert other claims inadequate or dangerous; or as well. b. The "city" has failed to fulfill the terms of a But land use or development litigation does not • contract or agreement; include litigation that seeks only: actual be restored to use b . a. Compensation such property ca n b } p ensation or other relief for an a or alleged physical occupation, invasion, or _ (1) The repair, replacement, adjustment or use of property by the "city"; or removal of your product or your work; or b. Reduction or invalidation of a special (2) The "city's" fulfilling the terms of the assessment; or ( ) Y 8 contract or agreement. c. Compensation for damages based on the 9. Joint powers entity means an operating entity "city's" actual or alleged negligent created by two or more governmental units entering inspection or enforcement of the state into an agreement as provided by statute for the building, plumbing, electrical, fire, or 8 P Y joint exercise of governmental powers. An similar codes; or intergovernmental agreement will be deemed to create a joint powers entity if the agreement d. Amounts due or allegedly due under - establishes a board with the effective power to do contract, including any "city" bonds or other any of the following, regardless of whether the obligations. specific consent of the constituent governmental units may also be required: 11. Lead or asbestos claim means any claim for damages arising out of the actual, alleged, a. To receive and expend funds; or threatened discharge, dispersal, release, escape, use, distribution, or handling of lead or b. To enter contracts; asbestos. • LMCIT CMC(11-86)(Rev. 11-96) 13 of 20 12. Limited pollution liability claim means any (1) Power cranes, shovels, loaders, claim for damages which resulted from a sudden diggers or drills;or occurrence which took place on or after the retroactive date shown in the Declarations and prior (2) Road construction or resurfacing to the expiration date of this covenant, and which: equipment such as graders, scrapers or rollers; a. Was caused by an actual, alleged, or threatened discharge, dispersal, release, or d. Vehicles not described in a., b., or c. escape of pollutants which took place entirely above that are not self-propelled and are above ground and not within or on the surface of maintained primarily to provide mobility to any lake, stream, surface water, or other body of permanently attached equipment of the water, and in which any resulting damages following types: occurred entirely above ground and not within or on the surface of any lake, stream, surface (1) Air compressors, pumps and water, or other body of water; or generators, including spraying, welding, building cleaning, geophysical b. Arises from the accidental rupture, backup or exploration, lighting and well-servicing overflow of the "city's" sanitary sewer, storm equipment; or sewer, or water supply systems. (2) Cherry pickers and similar devices 13. Loading or unloading means the handling of used to raise or lower workers; property: e. Vehicles not described in a., b., or c a. After it is moved from the place where it is above maintained primarily for purposes accepted for movement into or onto an aircraft, other than the transportation of persons or watercraft or auto; cargo. b. While it is in or on an aircraft, watercraft or 15. Occurrence means: auto; or a. With respect to Coverage A, a wrongful c. While it is being moved from an aircraft, act or a series of related wrongful acts. watercraft or auto to the place where it is finally delivered; but loading or unloading does not b. With respect to Coverage C, an accident, include the movement of property by means of a including continuous or repeated exposure to 1 device, other than a hand truck, that substantially the same general harmful mechanlca d c , Y 8 is not attached to the aircraft, watercraft or auto. condition. 14. Mobile equipment means any of the following Provided, that for purposes of Section III, land vehicles, including any attached occurrence shall be given the same meaning as s of lan 8 8 types n8 Y s machinery or equipment: given in the applicable statute establishing monetary limits on the "city's" tort liability. a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off 16. Personal injury means injury other than public roads; bodily injury, arising out of one or more of the following offenses: b. Vehicles that travel on crawler treads; a. False arrest, detention, or imprisonment, c. Vehicles, whether self-propelled or not, or malicious prosecution. maintained primarily to provide mobility to permanently mounted: LMCIT CMC(11-86)(Rev. 11-96) 14 of 20 b. The publication or utterance of a libel or a. Physical injury to tangible property, slander or other defamatory or disparaging including all resulting loss of use of that material, or a publication or utterance in property; or violation of an individual's right of privacy. b. Loss of use of tangible property that is not c. Wrongful entry or eviction, or other invasion physically injured. of the right of private occupancy. 21. Sudden occurrence means an accident d. Assault or battery committed for the purpose which takes place entirely above ground or of protecting persons or property or incident to water, and the pollution resulting therefrom, an arrest. which begins and ends within 72 hours following the accident. A related series of 17. Pollutants means any solid, liquid,gaseous or accidents shall be deemed to be a single sudden thermal irritant or contaminant, including smoke, occurrence. In the case of a related series of vapor, soot, fumes, acids, alkalis, chemicals and accidents the sudden occurrence will be deemed waste. Waste includes materials to be recycled, to have taken place when the first accident in reconditioned or reclaimed. the related series of such accidents took place. 18. Products-completed operations hazard 22. Suit means a civil proceeding in which includes all bodily injury and property damage damages to which this coverage applies are occurring away from premises the "city" owns or alleged. Suit includes an arbitration proceeding rents and arising out of your product or your work alleging such damages to which the "city" must except: submit or submit with LMCIT's consent. Suit does not mean any criminal proceeding against a. Products that are still in the "city's" physical any "covered party" or any open meeting law possession; or P roceeding, unless damages are also alleged in • that proceeding. A charge of employment b. Work that has not yet been completed or discrimination filed with the Federal Equal abandoned. Employment Opportunity Commission, the Commissioner of the Minnesota Department of 19. Your work will be deemed completed at the Human Rights, or a local human rights earliest of the following times: commission as defined in Minn. Stat. §363.01, subd. 23 shall be deemed to be a suit alleging a. When all of the work called for in the "city's" damages. contract has been completed; 23. Wrongful act means any actual or alleged b. When all of the work to be done at the site has error, statement, act, omission, offense, been completed if the "city's" contract calls for neglect, accident, or violation. "Violation" work at more than one site; c. When that part of the work done at a job site had been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. 20. Property damage means: LMCIT CMC(I 1-86)(Rev. 11-96) 15 of 20 includes violation of any rights, immunities, or Your product includes warranties or privileges secured by the Constitution and Laws of representationsmade at any time with respect to the United States of America. the fitness, quality, durability or performance of any of the items included in a. and b. above. 24. Your product means: Your product does not include vending machines a. Any goods or products, other than real or other property rented to or located for the property, manufactured, sold, handled, use of others but not sold. distributed or disposed of by: 25. Your work means: (1)The "city"; • a. Work or operations performed by the (2)Others trading under the "city's" name; or "city" or on the "city's" behalf; and (3) A person or organization whose business b. Materials, parts or equipment furnished in or assets the "city" has acquired; and connection with such work or operations. b. Containers (other than vehicles), materials, Your work includes warranties or parts or equipment furnished in connection with representations made at any time with respect to such goods or products. the fitness, quality, durability, or performance of any of the items included in a. or b. above. SECTION V - SUPPLEMENTARY PAYMENTS - COVERAGES A AND C LMCIT will pay, with respect to any claim or suit suit,including actual loss of earnings up to $100 LMCIT defends: a day because of time off from work. 1. All expenses LMCIT incurs. 5. All costs taxed against the "covered party" in the suit. 2. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising 6. Prejudgment interest awarded against the out of the use of any vehicle to which the coverage "covered party" on that part of the judgment applies. LMCIT does not have to furnish these LMCIT pays. If LMCIT makes an offer to pay bonds. the applicable limit of coverage, LMCIT will not pay any prejudgment interest based on that 3. The cost of bonds to release attachments, but period of time after the offer. only for bond amount within the applicable limit of coverage. LMCIT does not have to furnish these 7. All interest on the full amount of any bonds. judgment that accrues after entry of the judgment and before LMCIT has paid, offered reasonable expenses incurred the "covered to pay, or deposited in court the part of the 4. All reaso Y . A pe by P " at LMCIT's request, to assist it in the judgment that is within the applicable limits of art a L J 8 party" q investigation or defense of the claim or coverage. LMCIT CMC(11-86)(Rev. 11-96) 16 of 20 SECTION VI • CONDITIONS • In addition to the Common Conditions, Liability a. In the event of a claim or suit, notice Coverage Parts A and C are subject to the following containing particulars sufficient to identify the conditions: "covered party" and also reasonably obtainable information with respect to the time, place and 1. LIMITATIONS ON LMCIT'S DUTY TO circumstances thereof, and the names and INDEMNIFY addresses of the injured and of available witnesses, shall be given by or for the "covered LMCIT's duty to pay on behalf of or to indemnify party" to LMCIT or any of its authorized agents a "covered party" other than the "city" shall not as soon as practicable. The "city" shall apply to any act, error, omission, or violation: promptly take, at its own expense, all reasonable steps to prevent damages from a. Which constitutes malfeasance in office; or arising out of the same or similar conditions; provided that: b. Which constitutes willful neglect of duty; or (1) A failure to take such preventative c. Which constitutes bad faith; or measures shall not constitute a breach of this condition unless LMCIT has requested the d. For which the "city" is not authorized to "city" in writing to undertake such indemnify any person by statute; or preventative measures; and e. Which constitutes dishonesty on the part of a (2) Such expense shall not be recoverable "covered party"; or under this covenant. f. Which constitutes the willful violation of a Notice of damages or injury is not notice of a • statute or ordinance by any official, employee, or claim. agent of the "city". b. If claim is made or suit is brought against the The terms "malfeasance", "willful neglect of duty", "covered party", the "covered party" shall and "bad faith" shall be given the same meaning in immediately forward to LMCIT every demand, this covenant as given in the applicable statute with notice, summons or other process received by respect to the "city's" duty to defend or indemnify him or his representative. its officers, employees or agents. c. The "covered party" shall cooperate with 2. FINANCIAL RESPONSIBILITY LAW LMCIT and, upon LMCIT's request, assist in making settlements, assist in the conduct of suits When this covenant is certified as proof of financial and assist in enforcing any right of contribution responsibility for the future under the provisions of or indemnity against any person or organization any motor vehicle financial responsibility law, such who may be liable to the "covered party" coverage as is afforded by this covenant shall because of damages for which coverage is comply with the provisions of such law to the extent afforded under this covenant; and the "covered of the coverage and limits of liability required by party" shall attend hearings and trials and assist in securing and getting evidence and obtaining such law. the attendance of witnesses. The "covered 3. "COVERED PARTY'S" DUTIES IN party" shall not, except at his own cost, THE EVENT OF OCCURRENCE, CLAIM voluntarily make any payment, assume any obligation or incur any expense other than for OR SUIT first aid to others at the time of accident. LMCIT CMC(11-86)(Rev. 11-96) 17 of 20 1c 4. EXTENDED REPORTING PERIOD coverage period or change the scope of coverage provided. It applies only if the date of a. LMCIT will provide one or more extended the occurrence giving rise to the claim for • reporting periods, as described below, if: damages is after the retroactive date and before the end of the coverage period. (1)Coverage A is cancelled or not renewed; or Claims for damages which are first received and (2)LMCIT renews or replaces Coverage A with recorded during the basic extended reporting coverage that: period (or during the supplemental extended reporting period, if it is in effect) will be (a) Has a retroactive date later than the date deemed to have been made on the last day of shown on the Declarations page; or the coverage period. (b) Does not apply on a claims made basis. Once in effect, extended reporting periods may not be cancelled. b. A basic extended reporting period of 60 days from the end of the coverage period is automatically e. Extended reporting periods do not reinstate provided without additional charge. or increase the limits of coverage applicable to any claim to which this coverage part applies. c. A supplemental extended reporting period of unlimited duration is available, but only by an f. Neither the basic extended reporting period endorsement and for an extra charge. The nor the supplemental extended reporting period supplemental extended reporting period starts 60 is applicable to, and no extended reporting days after the end of the coverage period. period is provided for, the following: The "city" must give LMCIT a written request for (1) Any limited pollution liability claim; or the endorsement within 60 days after the end of the • coverage period. The supplemental extended (2) Any land use or development litigation. reporting period will not go into effect unless the "city" pays the additional premium promptly when (3) Any lead or asbestos claim. due. 5. ACTION AGAINST LMCIT The additional premium for the supplemental extended reporting period will be a percentage of No action shall lie against LMCIT unless as a the annual expiring premium for Coverage Part A. condition precedent thereto, there shall have been full compliance with all of the terms of this Number of years since covenant= nor until the amount of the "covered retroactive date shown party's" obligation to pay shall have been fully on Declarations page Additional cost determined either by judgment against the "covered party" after actual trial or by written 1 55.0% agreement of the "covered party", the claimant 2 57.0% and LMCIT. 3 60.3% 4 65.9% Any person or organization or the legal 5 70.8% representative thereof who has secured such 5+ 70.8% judgment or written agreement shall thereafter be entitled to recover under this covenant to the d. An extended reporting period does not extend the extent of the coverage afforded by this LMCIT CMC(11-86)(Rev. 11-96) 18 of 20 • covenant. No person or organization shall have any conditions of any proposed settlement. If the right under this covenant to join LMCIT as a party "city" does not consent to the proposed 411 to any action against the "covered party" to settlement,the "city"must notify LMCIT within determine the "covered party's" liability, nor shall 14 days of the date the "city" receives notice of LMCIT be impleaded by the "covered party" or his the proposed settlement, unless the "city" and legal representative. Bankruptcy or insolvency of LMCIT have mutually agreed to a longer or the "covered party" or of the "covered party's" shorter period. If within that time the "city" estate shall not relieve LMCIT of any of its does not notify LMCIT that the "city" does not obligations hereunder. consent to the settlement, the "city" will be deemed to have consented to the settlement. 6. WAIVER OF STATUTORY LIABILITY LIMITATIONS d. If the "city" refuses to consent to a settlement recommended by LMCIT, LMCIT will not be By accepting coverage from LMCIT under this liable for any excess amount. "Excess amount" " means damages legal the sum of all dama es and le al defense "city"the c1ry waives the monetary limits of liability (commonly known as municipal damages costs for the claim or suit minus the sum of: "caps") imposed by Minnesota law to the extent of the coverage shown in the declarations and further (1)the amount of the settlement proposed by described in Section III - Limits of Coverage. LMCIT; and However, it is the express intent of the parties to this covenant that the procurement of this covenant (2) any costs of defense incurred before the shall not waive other immunities, limits, or defenses date of the "city's" refusal. Any excess imposed or available under any statute or amount shall not be included in the P by Y common law which is applicable to "covered calculation of damages for purposes of any party" Pp any applicable "Each Occurrence Deductible" or "General Aggregate Deductible". • 7. CONSENT TO SETTLE e. If the "city" refuses to consent to a settlement The "city" may prohibit LMCIT from settling any recommended by LMCIT, LMCIT may, at its claim or suit against a "covered party" without the sole discretion, exercise either of the following "city's" consent, as provided below: options: a. At any time before LMCIT has offered or made (1) LMCIT may pay to the "city" an amount equal to the amount of the recommended a settlement of a claim or suit, the "city" may notify ' y y settlement, minus any applicable deductible. LMCIT that LMCIT may not settle the claim or suit If LMCIT makes such payment, LMCIT has without the "city's" consent. The "city" must give no further duty to defend or to indemnify the a separate notice for each claim or suit which the "city" or any other covered party for this "city" intends to prohibit LMCIT from settling claim or suit, and the "city" assumes any without the "city's" consent. duty which LMCIT would otherwise have b. If the "city" notifies LMCIT that the claim or suit had to defend and to indemnify any other may not be settled without the "city's" consent, the covered party. "city" must designate an individual authorized to give or refuse consent on the "city's" behalf. The (2) LMCIT may continue to defend the claim "city's" notice must include the name, address, and or suit. If LMCIT elects to continue to telephone number of the individual authorized to defend the claim or suit, the "city" must give or refuse consent on the "city's" behalf. reimburse LMCIT for any excess amount. c. If the "city" has notified LMCIT that the claim or suit may not be settled without the "city's" consent, • LMCIT will notify the "city" of the terms and LMCIT CMC(11-86)(Rev. 11-96) 19 of 20 f. If the "city" refuses to consent to a settlement recommended by LMCIT, the "city" must defend and indemnify LMCIT for any claim or suit arising out of the failure to settle the original claim or suit. S. RETROACTIVE JOINT POWERS • COVERAGE. LMCIT will, upon the "city's" request, issue retroactive comprehensive municipal coverage to any joint powers entity in which the "city" participates and which is not named as a "covered party" under any other LMCIT coverage. Pursuant to this section, LMCIT will issue its standard Comprehensive Municipal Coverage document to the joint powers entity but coverage shall be subject to an annual aggregate limit of$200,000. This limit shall apply to the sum of damages and loss adjustment expenses including defense costs for all claims to which the coverage applies. Coverage issued pursuant to this section will be issued with the same inception date and the same retroactive date as this covenant. The premium must be paid to LMCIT before the coverage goes into effect. The premium for coverage issued pursuant to this section shall be equal to the greater of $5,000 or the premium the joint powers entity would otherwise pay for coverage at LMCIT's current rates. LMCIT CMC(I 1-86)(Rev. 11-96) 20 of 20 •