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HomeMy WebLinkAboutOPH Insurance 2000-2001 LEAGUE OF MINNESOTA CITIES INSURANCE TRUST PROPERTY/CASUALTY ' 2001 DIVIDEND CALCULATION 1,; 1 AT MAY 31, 2001 ,` 1 1f LANDMARK INSURANCE SERVICES 232 SOUTH LAKE STREET P.O. BOX 188 FOREST LAKE MN 55025 OAK PARK HEIGHTS 14168 OAK PARK BLVD. P.O. BOX 2007 STILL WA TER MN 55082 GROSS EARNED PREMIUM $ 633,968 ADJUSTED LOSSES $ 92,200 MEMBERS DIVIDEND PERCENTAGE .00159107177 DIVIDEND AMOUNT $ 12,729 League of Minnesota Cities Insurance Trust Property/Casualty Program OAK PARK HEIGHTS Premium and Dividend History $60,000 $50,000 7-7 $40,000 , • $30,000 0;! $20,000 kr , 0-- . * 43' k: , A $100, $00 - 0 ID° .99 .98 ,97 '94 a", 95 '93 '92 °premiums I $49,224 $51,199 $48,711 $43,126 $43,126 $45,311 $45,352 $48,060 $44,539 $44,240 Dividends I $12,729 $7,858 $11,209 $15,430 $18,969 $20,700 $15,150 1 $13,556 $9,697 $10,572 OAK PARK HEIGHTS Premiums and Dividends since 1987 $700,000 $600,000 $628,568 $500,000 $400,000 $300,000 $200,000 - $100,000 $17Z415 $0 Premiums Dividends r\----s-,7 LMC145 University Avenue West, St. Paul, MN 55103-2044 League of Minnesota Cities Phone: (651) 281-1200 • (800) 925-1122 Cities promoting excellence Fax: (651) 281-1298 • TDD (651) 281-1290 J www.hneitimnc.org mnc.org December 17, 2001 To: City officials From: LMCIT Board of Trustees Re: 2001 Property/casualty dividend We are very pleased to enclose a check for your city's share of the $8 million dividend which the LMCIT property/casualty program is returning to member cities. Also included in this mailing are • 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. Finally, if you'd like to share this news with your local media, we've enclosed a draft press release which you can tailor for use with your local newspapers, radio, and TV station. Please feel free to call Pete Tritz at 651-281-1265,Ann Gergen at 651-281-1291, or Pat Deshler at 651-281-1267 if you have any questions or need any additional information. 145 University Avenue West, St. Paul, MN 55103-2044 f Minnesota Cities Phone: (651) 281-1200 • (800) 925-1122 League o Cities promoting excellence Fax: (651) 281-1298 • TDD (651) 281-1290 J www.lmcitimnc.org mnc.org December 15, 2001 To: LMCIT cities and agents From: LMCIT Board of Trustees Re: 2001 LMCIT property/casualty dividend—calculations and outlook Members of the LMCIT property/casualty program this year are sharing an $8 million dividend. This memo will give you some more information on the dividend,how your city's share is calculated, and what you might look for in the future. How is your city's dividend determined? 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 concluded that $8 million could be returned to the member cities. The next step is to allocate that total 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 that 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, 2001, for all of the years the city has been a 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. 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 $8 million total. What's behind this year's dividend? Two factors are mainly responsible for producing the funds that are available to be returned this year: • For the past few underwriting years, municipal liability, auto liability, and auto physical damage losses have run below what we'd projected when we set the premium rates. Property losses have been above projections in several recent years, but in total losses have been less than projected. • As we complete the process of appraising all member cities' buildings, it's resulting in higher covered values for many cities. That in turn has meant that property premium revenue the past couple years has been higher than projected. Should we expect similar dividends in the future? For several years, we've been moving in the direction of strengthening LMCIT's financial reserves and fund balances, and at the same time reducing somewhat the size of the "safety margin"that's built into the rates. That smaller margin, and member cities' success in controlling losses, are the factors that have made possible the rate reductions LMCIT member cities have seen over the past several years. If losses turn out to be at or below what we projected when we set the rates, that "safety margin" is where the surplus funds for dividends come from. All else being equal then, we'd expect in the future to have less surplus funds available to be returned as dividends —unless, of course, cities can continue to reduce losses further. Another factor that could affect future dividends is the reinsurance market. By this summer,the reinsurance market was already the hardest it's been since the mid `80's. The September 11 catastrophe resulted in enormous losses for reinsurers—somewhere around three times more than the biggest hurricane loss ever. That financial shock made the already hard reinsurance market even harder, resulting in higher costs and more restrictive coverage terms. 2 For 2002, we've been able to offset those increased reinsurance costs by increasing the amount of risk LMCIT retains. But what kind of reinsurance costs,terms, and availability we'll be looking at a year from now is anybody's guess. It's possible that LMCIT might need to retain even more risk in the future. We've already increased LMCIT's financial reserves so that we'd be able to handle increased risk if necessary, but it's possible we'd need to strengthen them even further in the future. That would mean retaining some funds that would otherwise be available to be returned as dividends. The bottom line,though, is this: The most important factor that determines whether LMCIT can return a dividend in any future year and how much that dividend might be is what cities' losses turn out to be. For purposes of financial planning, here are the key points to keep in mind: • In preparing city budgets, don't rely on there being future dividends. LMCIT will return funds that aren't needed for losses, expenses, or reserves, but we can never guarantee how much if any unneeded funds will be available to be returned in any future year. • The long-term trend is likely to be for smaller dividends in the future. As we've reduced overall rate levels, the safety margin in the rates is smaller. That margin is what produces the dividend if losses come in at or below projections. 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 2002 dividend or if it's substantially smaller. The LMCIT work comp program's recent history is a good illustration. Work comp members received dividends each year from 1997 through 2000. But because of rising loss costs, that program has essentially broken even since then—which means that no excess funds have been available to be returned as a dividend to work comp members. We'll do our best to run the program as economically as we can. LMCIT will 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. Those uncertainties aside though, we want to congratulate member cities on another successful year. None of this would be possible if cities hadn't put the effort into controlling losses and made the commitment to cooperating through LMCIT. 3 145 University Avenue West, St. Paul, MN 55103-2044 Phone: (651) 281-1200 • (800) 925-1122 fl.„7 LMC League of Minnesota cities Fax: (651) 281-1298 • TDD (651) 281-1290 Cities promoting excellence—� www.lmcit.lmnc.org December 15, 2001 To: Mayors and council members of LMCIT member cities From: LMCIT Board of Trustees Karen Anderson, Mayor, Minnetonka Les Heitke, Mayor, Willmar Todd Prafke, City Administrator, St. Peter Ken Hartung, City Administrator, Bayport Joel Hanson, City Administrator,Little Canada Paul Sparks, City Manager,Albert Lea Jim Miller,LMC Executive Director Re: LMCIT dividend for 2001 The LMCIT property/casualty program is returning $8 million to member cities as a dividend this year. We'd like to congratulate you on what your city has accomplished by cooperating through LMCIT and by your commitment to reducing losses. 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. This is the fifteenth straight LMCIT Dividends year in which the LMCIT property/casualty program $148 million since 1987 has returned a dividend to its members. Those dividends $30,000,000 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII equal 29% of the total $20,000,000 premiums for those years. illil Mil ill III IN mil LMCIT's property/casualty $10,000,000 and workers compensation $0 itinrinmIllm programs together have '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 returned $148 million to Property/casualty ■Work Comp I member cities since 1987. - OVER- Not just dividends-stable premiums... Just as important as dividends, LMCIT has also been able to keep cities' premium costs stable: Rates for property and auto physical damage coverage have increased in recent years, but that's been offset by decreases in rates for liability coverage. While private insurers are raising premiums 10-30% or more, we're very pleased to be able to keep property, liability and auto rates unchanged for the coming year. LMCIT Municipal Liability Premium Rates LMCIT Work Comp Premium Rates $15.00 � $6.00."._...._.._...._.-.--- - m 1 5 $10.00 + ' I $4.00 i --I $ $5.00 C 1 t 5 `m $2.00./ '93 '94 '95 '96 '97 '98 '99 '00 '01 02 '93 '94 '95 '96 '97 '98 '99 '00 '01 02 Underwriting Year Underwriting Year LMCIT Property Premium Rates LMCIT Auto Premium Rates Sots 1 7 $250 _..._._._.__............_.._. j i $200 r t $0.70 + $150 0 II > $1001 I=1 it , 11 1 1. 1 6.1- luririlill i g $0.05 $50i r 1111 , t/' -' { '? a 9 93 '94 95''96 '97 '98 '99 '00'rot 02 $0.00 Underwriting Year '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 Underwriting Year ELiability■Physical damage ...and better coverage Of course these low and stable costs would be meaningless if city didn't get the coverage it needs. Meeting cities' coverage and risk management needs is a top priority for LMCIT. Innovations like the coverage for land use regulation or development litigation or the "no-fault" sewer back-up coverage option are protections that just aren't available anywhere else. Improving coverage is an ongoing process. One small example among several this year is covering the cost of testing employees for anthrax under the work comp coverage. How is this all possible? The key factor in all of this is that cities have done an outstanding job of controlling and avoiding losses. That takes both the support of the city's elected officials and the efforts of your city staff: That commitment to controlling losses pays off for all of us. As Minnesota city officials we can all be proud of what we're accomplishing cooperatively through LMCIT. As LMCIT's Trustees, we'd like to say thank you and congratulations to you and your city employees. [Tailor for use in your city newsletter or other city publication; a similar article was sent to most newspapers and radio/TV stations across the state.] Good news for the city of[your city name] from LMCIT: City receives share of$8 million in dividends, property/casualty premium rates unchanged for 2002 The city of[your city name] will see its property, liability, and auto premium rates unchanged for the 2002 year and will receive [dividend amount] as its share of the $8 million in dividends returned to member cities by the League of Minnesota Cities Insurance Trust(LMCIT). Minnesota cities and their taxpayers can feel good about the rates and dividends from LMCIT in a year marked by economic slow down and important tax changes. This is great news for all Minnesota cities since many private insurance buyers have been seeing premium increases in the range of 10 to 30 percent or even more. Most private insurance companies have been raising premiums,partly in response to the enormous losses from the September 11 attacks and the resulting increases in their reinsurance costs. LMCIT's reinsurance costs have also increased, but LMCIT has been able to offset the higher reinsurance prices by retaining more risk. LMCIT is able to take on more risk because of its solid financial position and a very strong fund balance built over the past 20 years. Successful efforts by the city of[name] to reduce liability claims make it possible for LMCIT to return a sizable dividend to property/casualty program members for the 15th consecutive year. To help us minimize risks and avoid problems that lead to claims, the city participates in loss control seminars,receives loss control information each month, and is visited regularly by LMCIT's loss control representatives. This latest LMCIT dividend brings the total to over$120 million in dividends returned to property/casualty program members since 1987. [quote by mayor, city manager or clerk about city's participation in the Insurance Trust— This return shows that Minnesota cities are always working toward good management of their taxpayers' dollars...] The city has received [total dividend amount from graphs showing your city's premium and dividend history], which represents [number]percentage of property/casualty premiums paid since [year]. The amount of money we receive is determined by the total amount of premiums we paid into the trust and the losses we claimed for all of the years we participated. The longer we participate in LMCIT and the more successful we are at avoiding losses,the greater our dividend. LMCIT is a self-insurance pool formed in 1980 to meet unique risk management needs of cities. The Insurance Trust's coverage is specifically designed for cities, and as new needs or problems develop,LMCIT modifies coverage or develops new coverage to meet those needs. More than 800 Minnesota cities are members of the Trust. Unlike private companies, LMCIT returns any money saved because of fewer claims to member cities. For more information about the dividends the city of[name] received, please call [city manager, administrator or clerk's phone number]. ## LMC145 University Avenue West, St. Paul, MN 55103-2044 League of Minnesota Cities Phone: (651) 281-1200 • (800) 925-1122 Cities promoting excellence Fax: (651) 281-1298 • TDD (651) 281-1290 J www.lmcit.lmnc.org November 28, 2001 To: LMCIT member cities and agents From: Pete Tritz Re: Coverage changes for 2002 Here's a summary of the coverage changes LMCIT member cities will see for the coming year. The work comp changes affect coverage written or renewed on or after January 1, 2002. The property/casualty coverage changes affect coverage written or renewed on or after November 15,2001. Changes in workers compensation coverage There are three changes in the coverage for diagnostic testing following potential exposure to certain communicable diseases: • The coverage is expanded to also cover the cost of testing the source person as well as the employee. • The limit is increased to $2,500 per employee. • The coverage is expanded to also include testing for anthrax when that testing is medically indicated, as well as hepatitis,HIV,AIDS,and tuberculosis. (LMCIT will also cover medically indicated anthrax testing under policies currently in force as well.) Changes in liability coverage The only substantive liability coverage changes are in the coverage for land use regulation and development litigation: • The coverage is amended to clarify that an ordinary action to enforce land use regulations is not covered unless that litigation involves a challenge to the constitutionality of the regulation or the city's legal authority to adopt and enforce the regulation. irr,,)TE c -._ ` 2001 • A new provision is added requiring that the city must report land use litigation to LMCIT within one year of the time the litigation is commenced in order to have coverage for that litigation. The provisions relating to sewer back-up liability claims are re-worded to clarify that these claims are covered as part of the coverage for limited pollution,that each back-up is considered to be a separate occurrence for coverage purposes, and that these claims are subject to the $1 million annual aggregate limit that applies to "limited pollution"claims. Changes in property Y covera e • There will now be a$25 million aggregate limit on coverage for damage caused by terrorism. Both direct property damage and other types of covered damages such as loss of income, extra expense, debris clean-up, valuable papers, etc, are subject to the $25 million aggregate limit. (This new limit is necessary because of a reinsurance restriction.) • The provisions on coverage for buildings under construction (including additions to and renovations of existing structures) are completely re-designed and re-written, and are now contained in a separate coverage section. Here are the key points: ➢ A building under construction is automatically covered if the total project cost is g Y p J $2 million or less, without having to be specifically scheduled. ➢ No additional mid-term premium is charged for these projects. ➢ The contractor's and subcontractors' interests in the property are automatically covered,to the extent that the construction contract makes it the city's responsibility to provide coverage for these interests. ➢ Items such as temporary scaffolding, falsework, foundations, etc., which are normally covered by specialty "builders risk"policies, are automatically covered for projects under$2 million. For larger projects—those over$2 million—the city must contact LMCIT and specifically schedule the building in order to have coverage. The coverage issues can become more complicated in larger projects; the risks may be greater than LMCIT can reasonably accommodate without making a charge; and in some cases contractors may have special arrangements with insurers under which they can provide the builders risk coverage less expensively than LMCIT can. Requiring specific action on larger projects assures that any special issues can be identified and addressed, and that the city can evaluate whether LMCIT, the contractor, or another source is the most economical way to address the builders risk on the project. 2 1 • The language on loss valuation is amended to clarify that if a building is destroyed and the city chooses to replace it with a building that is substantially different, LMCIT will pay an amount equal to what the replacement cost would have been for a building similar in size and construction to the one that was destroyed. • Coverage is added for damages caused by an off-premises power failure,if that failure was a result of a peril that would be covered under the city's own property coverage. This is subject to a$100,000 limit. • M ost ne w ly a c quired or newly constructed buildings or property in the open are now covered automatically, with no additional premium charge until the city's next renewal. These structures only need to be reported and scheduled and an additional premium paid if the value is greater than$5 million. Similarly, newly acquired mobile property up to $250,000 in value is automatically covered until the city's next renewal. (You'll recall that a g ear ago,we revised the auto coverage so that newly Y acquired autos are automatically covered at no additional charge, until the city's next renewal. This change extends that same concept to buildings and mobile equipment.) • For structures not eligible for NFIP flood insurance, we'v e clarified f ed tha t there e is no coverage for damage caused by a flood if the structure is in a flood hazard area. We've also corrected a formatting and wording error in the coverage for water damage. • The "extraordinary expense"provisions of the property coverage are re-worded in order to clarify the intent. The revised language is attached. The reason for the clarification is that the original language arguably might have caused a problem with the city's ability to recover certain costs from FEMA in the event of a federal disaster. Note: This coverage clarification also applies to LMCIT property coverage that's currently in force, effective immediately. Bond coverage changes The bond coverage is amended to clarify that if the city has good evidence that an employee dishonesty loss has occurred, inventory shortage information or profit/loss computations can be used to establish the amount of that loss. Machinery breakdown (boiler) coverage changes There are several important changes in the machinery breakdown coverage. (For those familiar with HSB's"Freestyle"machinery breakdown coverage form, the LMCIT coverage is essentially similar.) • There will no longer be coverage for damage caused by a flood, except for the expense of drying electrical equipment. 3 • Ice rink piping coverage now covers plastic pipes. • Limits for expediting expense and for hazardous substance(including ammonia) contamination increase from $25,000 to $100,000. • Coverage is added for the cost of converting CFC refrigerant systems and demolition costs is added, subject to a$100,000 limit. • Limits up to $60 million per accident for property damage will now be available, based on the city's property values. In addition, there's a$5 million limit for extra expense • Coverage is added for damages resulting from an off-premises power failure caused by a breakdown of the utility's equipment. This includes separate limits of$100,000 for both lost income and damage to perishables, respectively. Other changes • The language on deductibles in the common conditions and in the property and liability forms is revised to make the wording more consistent. We've also made the differences between property and liability deductibles more clear. I.e., in property, LMCIT subtracts the amount of the deductible from the payment to the city, while in liability LMCIT pays the entire amount and bills the city to reimburse the deductible; and the property coverage limits are in addition to the deductible,while for liability the deductible is within the coverage limit. • Because of a reinsurance requirement,we may need to request additional information from the city in order to provide coverage for a few specific risks: guards operating electronic screening or metal detection equipment; dams, bridges, and tunnels over 1000 feet in length; and airports with regularly scheduled service. 4 EXTRAORDINARY EXPENSE (1). Extraordinary expense payment Beverage. As a benefit associated with being a member of LMCIT's Property/Casualty program,upon submission of a claim, LMCIT will pay for any extraordinary and unanticipated cost or expense the city incurs which (a)Is necessary for the purpose of protecting the public health and safety, protecting city property,or meeting the city's legal obligations;and (b)Is not covered by any other provision of this covenant,any other LMCIT coverage covenant,or any insurance policy. The city must provide to LMCIT any information or documentation needed or requested in order to determine if these conditions are met. The determination of whether these conditions are met will be at LMCIT's sole discretion. (2) Limit. LMCIT will not pay more than$100,000 for claims under this section during the coverage year,regardless of the number of claims,occurrences or incidents. (3) Reimbursement of Extraordinary Expense Payment For any claims for extraordinary expense,which are paid under this section,the city must reimburse LMCIT asprovided in this paragraph. The amount to be paid to LMCIT will equal the amount needed to reimburse LMCIT for the full amount of any claims that LMCIT pays under this section. The city may at its discretion reimburse LMCIT through payment of _ _ _._ • _ . -•. •• -qual annual installments over a period of up to five years from the date the claim is paid. Each installment will be billed and payable at the same time as with the city's annual renewal premium for LMCIT property/casualty coverage. If the city ceases to be a member of the LMCIT property/casualty program,the full amount together with any accrued interest will be immediately due and payable on the date that the city ceases to be a member. No interest will apply if reimbursement is made within one year of the date the cost or expense was incurred. If the city elects to pay the reimbursement in more than one annual installment,interest at the rate of 3%annually shall be included in the amount owed , beginning one year from the date the cost or expense was incurred. (4) Coverage Termination of Benefits. The LMCIT Board of Trustees may terminate the benefit provided Beverage under this section at any time upon 10 days written notice to the city, if the Board determines that it is necessary to protect the interests of LMCIT or its member cities. Termination of this coverage shall not affect any claims that the city has submitted to LMCIT before the effective date of termination of coverage. 5 1 1.______,,7. L N C 145 University Avenue West, St. Paul, MN 55103-2044 League of Minnesota Cities Phone: (651) 281-1200 • (800) 925-1122 Cities promoting excellence Fax: (651) 281-1298 • TDD (651) 281-1290 J www. mcit.lmnc.org November 28, 2001 To: LMCIT member cities and agents From: Pete Tritz Re: Property/casualty and work comp rates and dividends Here's what LMCIT member cities will see for the coming year: • Premium rates for property, liability, auto, bond, liquor liability, and most other property/casualty coverages will be unchanged for the 2001-2002 underwriting year. • Rates for excess liability coverage may increase slightly for some cities because of increased reinsurance costs. • Rates for machinery breakdown coverage will increase 7% for risks other than electric utilities. For electric utilities,the situation will vary with the individual risk. • Property/casualty program members will share an$8 million dividend, which will be distributed in mid-December. By comparison, the LMCIT property/casualty program returned a$5 million dividend last year. • Work comp premium rates will increase 7% for 2002. The premium credit for managed care will be reduced from 5%to 3%. • The LMCIT work comp program will not return a dividend this year. What's behind LMCIT's rate and dividend actions for the coming year? Property/casualty We're very pleased to be able to keep premium rates for property, liability, and auto coverages unchanged for the coming year. That's a significant accomplishment at a time when many private insurance buyers are seeing their premiums increase 10%-30%or even more. Keep in mind, of course, that even though LMCIT rates aren't changing a city's premiums may still change because of changes in the city's exposures and/or loss experience. Here are some of the main factors that affect this year's property/casualty rates and dividend: • The cost of reinsurance has increased significantly. By this summer, the reinsurance market had already become harder than it's been in over 15 years. The September 11 catastrophe resulted in enormous losses for reinsurers—somewhere around three times more than the biggest hurricane loss ever. That financial shock made the already hard reinsurance market even harder, resulting in higher costs and more restrictive coverage terms. While LMCIT is paying more for the reinsurance we purchase, we've been able to offset that cost by increasing the amount of risk that LMCIT retains. The very strong fund balance that LMCIT has built over the past 20 years makes it possible to comfortably handle that increased risk. • For the past few underwriting years, municipal liability, auto liability, and auto physical damage losses have been running below what we'd projected when we set the premium rates. LMCIT rates are designed so that when combined with investment income they'd cover losses and expenses even if losses turn out to be more than projected. When losses turn out below projections, part of the loss funding and all of that safety margin become available to be returned to members as a dividend. • Property losses have run somewhat above projections in several recent years. Because of this, we'd anticipated that property premium rates might need to increase further. However, as we complete the process of appraising all member cities' buildings, it's resulting in higher covered values for many cities—significantly higher in some cases. That in turn has produced more than enough increased premium to cover the higher losses, even without a rate increase. Workers compensation LMCIT Work Comp Premiums The 7/0 increase in work comp Average Rate per$100 payroll rates for 2002 is LMCIT's first rate hike since 1992. We were able to $6.00 reduce rates several times in the mid-`90's, and have held the overall $4.00 rate level unchanged since 1999. $2.00 I Member cities' work comp loss costs have been increasing over the $0.00 ' past 2-3 years, and those rising loss '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 costs mean that premiums have to increase as well. Had the state not reduced the Special Compensation Fund assessment rate,we would have had to increase work comp rates a year ago. 2 Here's what the work comp picture looks like: • Since 1999,the number of reported work comp injuries has been increasing. That is, for a given amount of payroll, we've been seeing more injuries that result in at least some claim cost. • The percentage of reported injuries resulting in lost time jumped in 2000. So far,the pattern in 2001 looks more like previous years than like 2000. However, we'll need to keep a close eye on how this develops. • The average medical cost per claim is increasing. Average medical costs had been holding nearly flat for several years. That was surprising, given what we know is happening with health care costs in general. However, we're now beginning to see some increase in our average medical cost per claim. • This year's analysis of work comp managed care indicates that loss costs are Y Y P g somewhat lower in cities that use managed care than in those that don't. Arguably though,there may still be some question about which is cause and which is effect. (I.e., is managed care responsible for reducing costs, or is it that cities that pay more attention to controlling work comp injuries, returning employees to work, etc. are more likely to enroll for managed care?) The study also shows that cities using managed care on the average have lower experience modification factors than those that don't, so they're therefor saving money on their premiums. The reduction in the managed care premium credit is intended to avoid"over-rewarding"the cities that use managed care, while still maintaining an up-front incentive for cities to use managed care. • While our loss picture doesn't look quite as good as it did a year ago, it's still very good by industry standards. A good measure of this is the experience modification that the Workers Compensation Reinsurance Association(WCRA) calculates each year for LMCIT. The WCRA mod calculation essentially compares LMCIT's total loss experience with what would be expected for this volume and type of payroll according the rating association's data. LMCIT's current experience modification is .84. In other words,member cities' combined work comp experience erience is about P 16%better than what would be expected for the average Minnesota employer. What might be ahead? Here are a few thoughts on what we might be looking at for the future. • It's possible that work comp premiums may have to increase further in the future. To minimize the effect on city budgets,the LMCIT Board held this year's work comp rate increase as low as possible. That meant squeezing the safety margin built into the rates down to a very narrow amount. If the current loss patterns continue,we'd 3 likely need another moderate rate increase for 2003 to get that safety margin back to the levels that we've typically targeted in the past. • The reinsurance market right now is chaotic and unpredictable, and there's no way to even guess what kind of reinsurance costs, terms, and availability we'll be looking at a year from now. In light of this uncertainty, the LMCIT Board has further strengthened LMCIT's financial reserves and fund balances. As a result, we're in a position to be able to further increase the amount of risk LMCIT retains if that's necessary or advantageous. But what the reinsurance market might look like in a year and what the ultimate effect on cities might be is anybody's guess at this point. • There are a couple liability trends that we need to keep an eye on. First, the number of claims for litigation relating to land use regulation, development, or redevelopment has been growing steadily. This may be partly a function of cities' greater Number of land use claims familiarity with this coverage, and by calendar year partly an actual increase in the amount of this kind of litigation. 100 . 80 The legal costs make land use claims 60 much more expensive than the typical 40 liability claim, and we've seen a few 20 � individual cases where the legal costs 0 have been enormous. If the frequency '96 '97 '98 '99 '00 '01 of this type of litigation continues to increase, it could begin to significantly At 9 mon. _Current affect premium costs. We'll need to continue to monitor this closely, and cities will need to continue to do what they can to control the amount and cost of this kind of litigation. Claims related to employment is another Number of employment claims area we're watching closely. Since the by calendar year early `90's, Minnesota cities have done a superb job of improving their personnel 150 practices and reducing the number and cost 100 of liability claims relating to /1\11---14"■178N„it__42 However, we're now seeing the numbers of 50 employment claims increasing in the past o ' e couple years. Much of the increase is in the '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 form of EEOC complaints, rather than formal lawsuits. At 9 mon. __. Current So far at least, the increased claim frequency hasn't resulted in significantly increased loss costs,and at this point it's probably more something to be aware of than to be alarmed about. But it's a good reminder that cities need to continue to pay close attention to maintaining good employment personnel practices. 4 , , 1-1„, _ . \ LAc 145 University Avenue West, St. Paul, MN 55103-2044 League of Minnesota Cities Phone: (651) 281-1200 • (800) 925-1122 Cities promoting excellence Fax: (651) 281-1298 • TDD (651) 281-1290 J www.lmcit.lmnc.org November 28, 2001 To: LMCIT member cities and agents From: Pete Tritz Re: Coverage changes for 2002. Here's a summary of the coverage changes LMCIT member cities will see for the coming year. The work comp changes affect coverage written or renewed on or after January 1, 2002. The property/casualty coverage changes affect coverage written or renewed on or after November 15, 2001. Changes in workers compensation coverage There are three changes in the coverage for diagnostic testing following potential exposure to certain communicable diseases: • The coverage is expanded to also cover the cost of testing the source person as well as the employee. • The limit is increased to $2,500 per employee. • The coverage is expanded to also include testing for anthrax when that testing is medically indicated, as well as hepatitis,HIV,AIDS,and tuberculosis. (LMCIT will also cover medically indicated anthrax testing under policies currently in force as well.) Changes in liability coverage The only substantive liability coverage changes are in the coverage for land use regulation and development litigation: • The coverage is amended to clarify that an ordinary action to enforce land use regulations is not covered unless that litigation involves a challenge to the constitutionality of the regulation or the city's legal authority to adopt . • - • • - •- regulation. `'is,\, ? `-- El l I il '�' `I DEC 3 2001 � �ii ti • A new provision is added requiring that the city must report land use litigation to LMCIT within one year of the time the litigation is commenced in order to have coverage for that litigation. The provisions relating to sewer back-up liability claims are re-worded to clarify that these claims are covered as part of the coverage for limited pollution, that each back-up is considered to be a separate occurrence for coverage purposes, and that these claims are subject to the $1 million annual aggregate limit that applies to"limited pollution" claims. Changes in property coverage • There will now be a$25 million aggregate limit on coverage for damage caused by terrorism. Both direct property damage and other types of covered damages such as loss of income, extra expense, debris clean-up, valuable papers, etc, are subject to the $25 million aggregate limit. (This new limit is necessary because of a reinsurance restriction.) • The provisions on coverage for buildings under construction(including additions to and renovations of existing structures) are completely re-designed and re-written, and are now contained in a separate coverage section. Here are the key points: > A building under construction is automatically covered if the total project cost is $2 million or less, without having to be specifically scheduled. ➢ No additional mid-term premium is charged for these projects. ➢ The contractor's and subcontractors' interests in the property are automatically covered, to the extent that the construction contract makes it the city's responsibility to provide coverage for these interests. ➢ Items such as temporary scaffolding, falsework, foundations, etc., which are normally covered by specialty "builders risk"policies, are automatically covered for projects under$2 million. For larger projects—those over$2 million—the city must contact LMCIT and specifically schedule the building in order to have coverage. The coverage issues can become more complicated in larger projects; the risks may be greater than LMCIT can reasonably accommodate without making a charge; and in some cases contractors may have special arrangements with insurers under which they can provide the builders risk coverage less expensively than LMCIT can. Requiring specific action on larger projects assures that any special issues can be identified and addressed, and that the city can evaluate whether LMCIT,the contractor, or another source is the most economical way to address the builders risk on the project. 2 • The language on loss valuation is amended to clarify that if a building is destroyed and the city chooses to replace it with a building that is substantially different, LMCIT will pay an amount equal to what the replacement cost would have been for a building similar in size and construction to the one that was destroyed. • Coverage is added for damages caused by an off-premises power failure, if that failure was a result of a peril that would be covered under the city's own property coverage. This is subject to a$100,000 limit. • Most newly acquired or newly constructed buildings or property in the open are now covered automatically, with no additional premium charge until the city's next renewal. These structures only need to be reported and scheduled and an additional premium paid if the value is greater than $5 million. Similarly, newly acquired mobile property up to $250,000 in value is automatically covered until the city's next renewal. (You'll recall that a year ago, we revised the auto coverage so that newly acquired autos are automatically covered at no additional charge, until the city's next renewal. This change extends that same concept to buildings and mobile equipment.) • For structures not eligible for NFIP flood insurance,we've clarified that there is no coverage for damage caused by a flood if the structure is in a flood hazard area. We've also corrected a formatting and wording error in the coverage for water damage. • The "extraordinary expense"provisions of the property coverage are re-worded in order to clarify the intent. The revised language is attached. The reason for the clarification is that the original language arguably might have caused a problem with the city's ability to recover certain costs from FEMA in the event of a federal disaster. Note: This coverage clarification also applies to LMCIT property coverage that's currently in force, effective immediately. Bond coverage changes The bond coverage is amended to clarify that if the city has good evidence that an employee dishonesty loss has occurred, inventory shortage information or profit/loss computations can be used to establish the amount of that loss. Machinery breakdown (boiler) coverage changes There are several important changes in the machinery breakdown coverage. (For those familiar with HSB's"Freestyle" machinery breakdown coverage form, the LMCIT coverage is essentially similar.) • There will no longer be coverage for damage caused by a flood, except for the expense of drying electrical equipment. 3 • Ice rink piping coverage now covers plastic pipes. • Limits for expediting expense and for hazardous substance (including ammonia) contamination increase from$25,000 to $100,000. • Coverage is added for the cost of converting CFC refrigerant systems and demolition costs is added, subject to a$100,000 limit. • Limits up to $60 million per accident for property damage will now be available, based on the city's property values. In addition,there's a$5 million limit for extra expense • Coverage is added for damages resulting from an off-premises power failure caused by a breakdown of the utility's equipment. This includes separate limits of$100,000 for both lost income and damage to perishables, respectively. Other changes • The language on deductibles in the common conditions and in the roe and property riY liability forms is revised to make the wording more consistent. We've also made the differences between property and liability deductibles more clear. I.e., in property, LMCIT subtracts the amount of the deductible from the payment to the city,while in liability LMCIT pays the entire amount and bills the city to reimburse the deductible; and the property coverage limits are in addition to the deductible, while for liability the deductible is within the coverage limit. • Because of a reinsurance requirement, we may need to request additional information from the city in order to provide coverage for a few specific risks: guards operating electronic screening or metal detection equipment; dams,bridges, and tunnels over 1000 feet in length; and airports with regularly scheduled service. 4 EXTRAORDINARY EXPENSE (1). Extraordinary expense payment coverage. As a benefit associated with being a member of LMCIT's Property/Casualty program,upon submission of a claim, LMCIT will pay for any extraordinary and unanticipated cost or expense the city incurs which (a)Is necessary for the purpose of protecting the public health and safety, protecting city property,or meeting the city's legal obligations;and (b)Is not covered by any other provision of this covenant,any other LMCIT coverage covenant,or any insurance policy. The city must provide to LMCIT any information or documentation needed or requested in order to determine if these conditions are met. The determination of whether these conditions are met will be at LMCIT's sole discretion. (2) Limit. LMCIT will not pay more than $100,000 for claims under this section during the coverage year,regardless of the number of claims,occurrences or incidents. (3) Reimbursement of Extraordinary Expense Payment For any claims for extraordinary expense,which are paid under this section,the city must reimburse LMCIT as provided in this paragraph. The amount to be paid to LMCIT retroactive premium will equal the amount needed to reimburse LMCIT for the full amount of any claims that LMCIT pays under this section. The city may at its discretion reimburse LMCIT through payment of:: _ _ .._ • _ . _ -•. - -qual annual installments over a period of up to five years from the date the claim is paid. Each installment will be billed and payable at the same time as with the city's annual renewal premium for LMCIT property/casualty coverage. If the city ceases to be a member of the LMCIT property/casualty program,the full amount together with any accrued interest will be immediately due and payable on the date that the city ceases to be a member. No interest will apply if reimbursement is made within one year of the date the cost or expense was incurred. If the city elects to pay the reimbursement in more than one annual installment,interest at the rate of 3%annually shall be included in the amount owed , beginning one year from the date the cost or expense was incurred. (4) Coverage Termination of Benefits. The LMCIT Board of Trustees may terminate the benefit provided sever-age under this section at any time upon 10 days written notice to the city, if the Board determines that it is necessary to protect the interests of LMCIT or its member cities. Termination of this coverage shall not affect any claims that the city has submitted to LMCIT before the effective date of termination of coverage. 5 145 University Avenue West, St. Paul, MN 55103-2044 Phone: (651) 281-1200 • (800) 925-1122 League of Minnesota cities Citiades es promoting excellence Fax: (651) 281-1298 • TDD (651) 281-1290 www.lmcit.lmnc.org November 28, 2001 To: LMCIT member cities and agents From: Pete Tritz Re: Property/casualty and work comp rates and dividends Here's what LMCIT member cities will see for the coming y ear: • Premium rates for property, liability, auto, bond, liquor liability, and most other property/casualty coverages will be unchanged for the 2001-2002 underwriting year. • Rates for excess liability coverage may increase slightly for some cities because of g Y g increased reinsurance costs. • Rates for machinery breakdown coverage will increase 7% for risks other than Y g electric utilities. For electric utilities,the situation will vary with the individual risk. • Property/casualty program members will share an$8 million dividend, which will be distributed in mid-December. By comparison,the LMCIT property/casualty program returned a$5 million dividend last year. • Work comp premium rates will increase 7% for 2002. The premium credit for managed care will be reduced from 5%to 3%. • The LMCIT work comp program will not return a dividend this year. What's behind LMCIT's rate and dividend actions for the coming year? Property/casualty We're very pleased to be able to keep premium rates for property, liability, and auto coverages unchanged for the coming year. That's a significant accomplishment at a time when many private insurance buyers are seeing their premiums increase 10%-30%or even more. Keep in mind, of course, that even though LMCIT rates aren't changing a city's premiums may still change because of changes in the city's exposures and/or loss experience. Here are some of the main factors that affect this year's property/casualty rates and dividend: • The cost of reinsurance has increased significantly. By this summer, the reinsurance market had already become harder than it's been in over 15 years. The September 11 catastrophe resulted in enormous losses for reinsurers—somewhere around three times more than the biggest hurricane loss ever. That financial shock made the already hard reinsurance market even harder, resulting in higher costs and more restrictive coverage terms. While LMCIT is paying more for the reinsurance we purchase, we've been able to offset that cost by increasing the amount of risk that LMCIT retains. The very strong fund balance that LMCIT has built over the past 20 years makes it possible to comfortably handle that increased risk. • For the past few underwriting years, municipal liability, auto liability, and auto physical damage losses have been running below what we'd projected when we set the premium rates. LMCIT rates are designed so that when combined with investment income they'd cover losses and expenses even if losses turn out to be more than projected. When losses turn out below projections, part of the loss funding and all of that safety margin become available to be returned to members as a dividend. • Property losses have run somewhat above projections in several recent years. Because of this, we'd anticipated that property premium rates might need to increase further. However, as we complete the process of appraising all member cities' buildings, it's resulting in higher covered values for many cities—significantly higher in some cases. That in turn has produced more than enough increased premium to cover the higher losses, even without a rate increase. Workers compensation LMCIT Work Comp Premiums The 7% increase in work comp Average Rate per$100 payroll rates for 2002 is LMCIT's first rate hike since 1992. We were able to $6.00 reduce rates several times in the mid-`90's, and have held the overall $4.00 � E rate level unchanged since 1999. , $2.00 Member cities' work comp loss costs have been increasing over the $0.00 past 2-3 years, and those rising loss '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 costs mean that premiums have to increase as well. Had the state not reduced the Special Compensation Fund assessment rate,we would have had to increase work comp rates a year ago. 2 to Here's what the work comp picture looks like: • Since 1999, the number of reported work comp injuries has been increasing. That is, for a given amount of payroll,we've been seeing more injuries that result in at least some claim cost. • The percentage of reported injuries resulting in lost time jumped in 2000. So far,the pattern in 2001 looks more like previous years than like 2000. However, we'll need to keep a close eye on how this develops. • The average medical cost per claim is increasing. Average medical costs had been holding nearly flat for several years. That was surprising, given what we know is happening with health care costs in general. However, we're now beginning to see Pp g g some increase in our average medical cost per claim. • This year's analysis of work comp managed care indicates that loss costs are somewhat lower in cities that use managed care than in those that don't. Arguably Y though,there may still be some question about which is cause and which is effect. (I.e., is managed care responsible for reducing costs, or is it that cities that pay more attention to controlling work comp injuries, returning employees to work, etc. are more likely to enroll for managed care?) The study also shows that cities using managed care on the average have lower experience modification factors than those that don't,so they're therefor saving money on their premiums. The reduction in the managed care premium credit is intended to avoid"over-rewarding" the cities that use managed care, while still maintaining an up-front incentive for cities to use managed care. • While our loss picture doesn't look quite as good as it did a year ago, it's still very good by industry standards. A good measure of this is the experience modification that the Workers Compensation Reinsurance Association(WCRA) calculates each year for LMCIT. The WCRA mod calculation essentially compares LMCIT's total loss experience with what would be expected for this volume and type of payroll according the rating association's data. LMCIT's current experience modification is .84. In other words, member cities' combined work comp loss experience is about 16%better than what would be expected for the average Minnesota employer. What might be ahead? Here are a few thoughts on what we might be looking at for the future. • It's possible that work comp premiums may have to increase further in the future. To minimize the effect on city budgets, the LMCIT Board held this year's work comp rate increase as low as possible. That meant squeezing the safety margin built into the rates down to a very narrow amount. If the current loss patterns continue, we'd 3 likely need another moderate rate increase for 2003 to get that safety margin back to the levels that we've typically targeted in the past. • The reinsurance market right now is chaotic and unpredictable, and there's no way to even guess what kind of reinsurance costs, terms, and availability we'll be looking at a year from now. In light of this uncertainty, the LMCIT Board has further strengthened LMCIT's financial reserves and fund balances. As a result, we're in a position to be able to further increase the amount of risk LMCIT retains if that's necessary or advantageous. But what the reinsurance market might look like in a year and what the ultimate effect on cities might be is anybody's guess at this point. • There are a couple liability trends that we need to keep an eye on. First,the number of claims for litigation relating to land use regulation, development, or redevelopment has been growing steadily. This may be partly a function of cities' greater Number of land use claims familiarity with this coverage, and by calendar year partly an actual increase in the amount of this kind of litigation. 100 80 The legal costs make land use claims 60 much more expensive than the typical 40 liability claim, and we've seen a few 20 111 t individual cases where the legal costs 0 have been enormous. If the frequency '96 '97 '98 '99 '00 '01 of this type of litigation continues to increase, it could begin to significantly At 9 mon. Current affect premium costs. We'll need to continue to monitor this closely, and cities will need to continue to do what they can to control the amount and cost of this kind of litigation. Claims related to employment is another Number of employment claims area we re watching closely. Since the by calendar year early `90's, Minnesota cities have done a 150 superb job of improving their personnel practices and reducing the number and cost 100 of of liability claims relating to employment. I However, we're now seeing the numbers of 50 employment claims increasing in the past 0 f couple years. Much of the increase is in the '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 form of EEOC complaints, rather than formal lawsuits. At9 mon. . . Current So far at least, the increased claim frequency hasn't resulted in significantly increased loss costs, and at this point it's probably more something to be aware of than to be alarmed about. 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F '.O N VI'O CO O 0 CO w w 0 w '.0. 000ow 0044-00NN 01/10/2001 WED 13:26 FAX 6514647596 LANDMARK INSURANCE 0 001/003 Landmark Insurance Services MEMO f Page 13 PO Box 188 ACCOUNT NO OP DATE Forest Lake,MN 55025 OAKPA-1 KT 01/10/01 Phone: 651-464-3333 POLICY INFORMATION POLICY CMC20796 TYPE EFFECTIVE EXPIRATION CP 07/07/00 07/07/01 • City of Oak Park Heights 14168 Oak Park Blvd. Oak Park Heights,MN 55082-6476 Kim Re: Sewer Back-up Appl The Lea ue has faxed us the following application for 4111111.11MMONV1 Please have it completed and signed and fax it back and we will forward it to your underwriter. Thank you. ar Kate Tipping (00/1 l)f198aNI,3S'ddd11oW1 /dt. 14 i a 11,1. a • �. . 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RP (See Below for Billing Information) X PREMIUM DUE NOW: $25. RP (See Invoice Attached) OR DO NOT PAY NOW: PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATIO All other terms and conditions remain unchanged PR .0465 f Executive Director, LMCIT LMCIT ME020(1/95) Page 1 of 1 ENDORSEMENT #4 NT 10-4-00 CITY OF OAK PARK HEIGHTS I CMC 20796 I 7-7-00 COVERED PARTY COVENANT NUMBER EFFECTIVE DATE It is understood and agreed that the Schedule of Vehicles is amended as follows: Description Coverages tv D w . #3, 1997 FORD CROWN VICT, ALL COVERAGES #7069 9 Total Endorsement Premium: $511 . RP (See Below for Billing Information) X PREMIUM DUE NOW: $511 . RP (See Invoice Attached) OR DO NOT PAY NOW: PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATIO All other terms and conditions remain unchanged PR 1 .000 f Executive Director, LMCIT LMCIT ME020(1/95) Page 1 of 1 ENDORSEMENT #3 NT 10-4-00 COVERED PARTY COVENANT NUMBER EFFECTIVE DATE CITY OF OAK PARK HEIGHTS I CMC 20796 7-7-00 IT IS HEREBY UNDERSTOOD AND AGREED MUNICIPAL LIABILITY SCHEDULE FORM MGL-1(01-95) IS AMENDED AS FOLLOWS: OPERATING EXPENDITURES PREMIUM BASIS IS AMENDED TO 2,183,610. IN LIEU OF 2,345,336. STREET PREMIUM BASIS IS AMENDED TO 20 IN LIEU OF 15. INDEPENDENT CONTRACTORS PREMIUM BASIS IS AMENDED TO 1,850,850. IN LIEU OF 3,282,867. WATERWORKS PREMIUM BASIS IS AMENDED TO 200,000,000 IN LIEU OF 207,000,000. ERRORS & OMISSIONS COVERAGE EXPOSURE IS UNDERSTOOD AND AGREED TO BE 4,863,395. IN LIEU OF 6,380,524. Total Endorsement Premium: $2,046. RP (See Below for Billing Information) X PREMIUM DUE NOW: $2,046. RP (See Invoice Attached) OR DO NOT PAY NOW: PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATIO All other terms and conditions remain unchanged PR 1 .000 / Executive Director, LMCIT LMCIT ME044(1/95) Page 1 of 1 ENDORSEMENT #2 NT 10-4-00 COVERED PARTY COVENANT NUMBER EFFECTIVE DATE CITY OF OAK PARK HEIGHTS _ EIGHTS CMC 20796 - I 96 7 7 00 IT IS HEREBY UNDERSTOOD AND AGREED THAT SCHEDULE OF COVERED MOBILE PROPERTY FORM PM-109(11-97), B., MOBILE PROPERTY VALUED AT GREATER THAN $25,000. IS AMENDED AS FOLLOWS: ADD: #1 1995 CATERPILLAR XQ225 PORTABLE GENERATOR SET, S/N 8JJ00226 VALUE $51,639. MUNICIPAL PROPERTY and CRIME AND BOILER and MACHINERY FORM DEC-012(11-97) ITEM 5. COVERAGE PART ONE - PROPERTY, SECTION 1 - PROPERTY, BLANKET LIMIT OF COVERAGE PER OCCURRENCE IS AMENDED TO READ $6,337,186. IN LIEU OF $6,285,547. Total Endorsement Premium: $170. AP (See Below for Billind Information) PREMIUM DUE NOW: $ (See Invoice Attached) OR X DO NOT PAY NOW: PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATION. All other terms and conditions remain unchanged PR 1.000 Executive Director, LMCIT LMCIT ME044(1/95) Page 1 of 1 ENDORSEMENT #1 NT 10-4-00 COVERED PARTY COVENANT NUMBER EFFECTIVE DATE CITY OF OAK PARK HEIGHTS I CMC 20796 7-7-00 IT IS HEREBY UNDERSTOOD AND AGREED THAT SCHEDULE OF COVERED PROPERTY FORM PM-100(11-97) IS AMENDED AS FOLLOWS: TYPE OF SEC. IV-WATER& COVERED SUPPLEMENTAL LOC. # LOCATION OCCUPANCY PROPERTY VALUE FLOOD COVERAGE ADD: 19 5810 NORELL AVE N PUMPHOUSE #2 B CODE C BUILDING VALUE $53,045.; CONTENTS VALUE $53,045. 20 KERN CENTER/5500 STILLWATER BLVD LIFT STATION & FORCE MAIN B CODE C BUILDING VALUE $207,400. AMEND: 1 14168 OAK PARK BLVD N CITY HALL/GARAGE B CODE C ADDRESS TO READ AS ABOVE; BUILDING VALUE $1,591,350. IN LIEU OF $1,566,000. 2 581" & NORELL WATER TOWER & WELL B CODE C BUILDING VALUE $1,591,350. IN LIEU OF $1,545,000. 3 14168 OAK PARK BLVD N WATER TOWER & WELL B CODE C ADDRESS TO READ AS ABOVE; BUILDING VALUE $1,326,125. IN LIEU OF 1,287,500. 5 13425 60TH STREET LIFT STATION B CODE C BUILDING VALUE $117,616. IN LIEU OF $116,000. 6 14168 OARK PARK BLVD N PUMPHOUSE #3 B CODE C ADDRESS TO READ AS ABOVE. 7 SWAGER PARK SHELTER B CODE C BUILDING VALUE $7,800. IN LIEU OF $5,600. 9 VALLEY VIEW PARK SHELTER B CODE C BUILDING VALUE $76,472. IN LIEU OF $76,000. 013 14168 OAK PARK BLVD N CITY HALL B CODE C ADDRESS TO READ AS ABOVE. 014 SWAGER PARK PARK PIO CODE C PROPERTY IN THE OPEN VALUE $62,280. IN LIEU OF $60,466. 015 COVER PARK PARK PIO CODE C PROPERTY IN THE OPEN VALUE $70,626. IN LIEU OF $68,569. 016 VALLEY VIEW PARK PARK PIO CODE C PROPERTY IN THE OPEN VALUE $37,890. IN LIEU OF $36,787. 017 BREKKE PARK PARK PIO CODE C PROPERTY IN THE OPEN VALUE $136,353. IN LIEU OF $132,382. MUNICIPAL PROPERTY and CRIME AND BOILER and MACHINERY FORM DEC-012(11-97) ITEM 5. COVERAGE PART ONE- PROPERTY, SECTION 1 - PROPERTY, BLANKET LIMIT OF COVERAGE PER OCCURRENCE IS AMENDED TO READ $6,285,547. IN LIEU OF $5,848,499. Total Endorsement Premium: $326. AP (See Below for Billino Information) R P EMIUM DUE NOW: $ (See Invoice Attached) OR X DO NOT PAY NOW: PREMIUM ADJUSTMENT TO BE MADE AT EXPIRATION. All other terms and conditions remain unchanged PR 1.000 fr Executive Director, LMCIT LMCIT ME044(1/95) Page 1 of 1 -V. 1,°";s' -NOtorp, >4/41-It ;.0 • PROPERTY/CRIME A4* LlABILITY 110 . . 4 KATE TIPPING CUSTOMER SERVICE AGENT , AGENT#45558 r • Laindlinnairk INSURANCE SERVICES Since 1903 232 South Lake Street• Forest Lake,MN 55025 Phone: (651) 464-3333 or(612) 427-717&_!_ Fax: (651) 464 4596 •*1 "• • LMC League of Minnesota Cities Cities promoting excellence League of Minnesota Cities 145 University Avenue West St.Paul,MN 55103-2044 (651) 281-1200 p Com rehensive Municipal • Property and p Y Casualty Coverage Covera g Administered By: Berkley Risk Services, Inc. 145 University Avenue West St.Paul,MN 55103-2044 (651)281-1200 • **IMPORTANT** PLEASE READ YOUR AGREEMENT Covenant Number: COMMON COVERAGE DECLARATIONS CMC 20796 Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES Previous Covenant Number: INSURANCE TRUST MC CMC 19785 (Herein called LMCIT) 1.009w of Minnesota Cities Om 1. CITY and MAILING ADDRESS: Cities°'"'"°ti"'onodlenoe OAK PARK HEIGHTS ATTN: THOMAS MELENA 14168 OAK PARK BLVD. P.O. BOX 2007 STILLWATER MN 55082 Item 2. COVERAGE PERIOD: ONE YEAR From: 07/07/00 To: 07/07/01 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 $ 9, 340 Additional Covered Loss or Damages I NCLUDED Water and Supplemental Flood Coverage INCLUDED • Crime INCLUDED Bond -Employee Dishonesty NOT COVERED Bond- Faithful Performance NOT COVERED BOILER AND MACHINERY NOT COVERED MUNICIPAL LIABILITY $ 28,504 Medical Payments INCLUDED AUTOMOBILE LIABILITY $ 3,573 AUTOMOBILE PHYSICAL DAMAGE $ 1,968 TOTAL $ 43,385 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(11-95) DEC-011(11-9 ) DEC-012(11-99) DEC-013(11-99) eDEC-016(11-99) ifriA Execu 've D tor,LMCIT LMCIT DEC-011(11/86)(Rev.11/99) Administered by:Berkley Risk Administrators Company,LLC • 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 page, written notice of cancellation at least: 3. RATING AUTHORITY AND 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 promulgate rates and establish the premium to be (2) 30 days before the effective date of the charged for the coverage provided under this cancellation if LMCIT cancels for any other covenant. LMCIT may at its discretion or at reason. "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 b. Give the "city" reports on the conditions it mail or deliver to the first "city" shown in the finds; and Declarations written notice of the non-renewal not less c. Recommend changes. than 30 days before the expiration date. g. If notice is mailed, proof of mailing will be sufficient Neither LMCIT's right to make inspections nor its proof of notice, making any report thereon shall constitute any undertaking on behalf of or for the benefit of the 2. CHANGES "city" or others to determine or warrant that such property or operations are safe or healthful or free This covenant contains all the agreements between from hazard or are in compliance with any law, rule LMCIT and "you" concerning the coverage afforded. or regulation. LMCIT CCM(11-89)(Rev. 11-95) 1 of 3 These conditions apply not only to LMCIT, but also to The terms of the covenant, including those with PP Y Y S any rating advisory,ry, rate service, o r similar organization respect to: which makes inspections, surveys, reports, or 1111 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 • "city" for any legal or other expenses which are PARTIES 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 payment ment 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 ro ortion as Nothing in this paragraph shall be construed to P P 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 nuclear of the "city" b only to the amount of damages in excess of by u lear reaction or radiation, or radioactive any deductible amounts. contamination, however,er, caused. For 12. CONCEALMENT Fo purposes of this section, damages include defense NT 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. LMCIT CCM 11-89 Rev. 11-9 � �� 11-95) 2 of 3 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. 11-95) 3 of 3 Covenant #: MUNICIPAL PROPERTY and CRIME and CMC 20796 BOILER AND MACHINERY DECLARATIONS Coverage is provided by: LMC THE LEAGUE OF MINNESOTA CITIES • INSURANCE TRUST I .ofMM...«aC.M. (Herein called LMCIT) C'`"`promoting 0,Minn "'°'."`e Item 1. CITY: OAK PARK HEIGHTS ATTN: THOMAS MELENA Item 2. COVERAGE PERIOD: ONE YEAR From: 07/07/00 To: 07/07/01 12:01 A.M. 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 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 Blanket Limit of Coverage Per Occurrence $ 5,848,499 This blanket limit is subject to the sublimits as described in Section V, Limits of Coverage and Valuation • 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 Location 3 . Debris Removal(Direct Physical Damage to Covered Property) $1 ,000,000 Per Occurrence (No Direct Physical Damage to Covered Property) $ 50,000 Per Occurrence 4. Leasehold Interest $ 500,000 Per Location 5 . Pollutant Cleanup and Removal $ 10 ,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 & Records $ 500,000 Per Location 11 . Year 2000 -Extra Expense $ 5,000 Per Occurrence/ 5,000 Annual Aggregate 11 IP Section IV -Water and Supplemental Flood Coverage $ 500,000 Per Occurrence/ 500,000 Annual Aggregate • LMCIT DEC-012(11-86)(Rev.11/99) Page 1 of 3 \ ic L..aU.of Minnesota Chit. Cities promot+w .os 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 COVERED PROPERTY FOR THOSE LOCATIONS INCLUDED IN SECTION IV COVERAGE. Item 7. DEDUCTIBLES (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(11-95) MPCB(11-99) PM-100(11-97) PM-109(11-97) PM-110(11--97) • 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 occurence 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. MPCB(11-99) • LMCIT DEC-012(11-86)(Rev.11/99) Page 2 of 3 LMC Lwow of M:wwesota Cities Cities aiowiotiing aXCe ewoe Item 13. COVERAGE PART THREE -BOND Item 13A. BOND -EMPLOYEE DISHONESTY COVERAGE LIMIT OF COVERAGE PER OCCURRENCE: $ DEDUCTIBLE(Deductible applies per occurence 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 occurence 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. BOILER AND MACHINERY COVERAGE COVERAGE PARTS,FORMS,SCHEDULES AND ENDORSEMENTS APPLICABLE TO THIS COVERAGE. Item 16. DEDUCTIBLE BOILER AND MACHINERY $ PER ACCIDENT LMCIT DEC-012(11-86)(Rev.11/99) Page 3 of 3 • 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 MEO63(11/95) • LMC League of Minnesota Cities • Cities promoting excellence J MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE • LMCIT MPCB(11-99) • S League of Minnesota Cities Cities promoting excellence J MUNICIPAL PROPERTY COVERAGE PART ONE • LMCIT MPCB(11-99) MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE WHAT IT IS AND WHERE YOU CAN FIND IT INDEX • 11------\.,7 PROPERTY COVERAGE - PART ONE Lmc League of Minnesota Cities Cities promotiJ ng excellence SECTION I - PROPERTY COVERAGE: PAGE A. COVERED PROPERTY 1 B. PROPERTY NOT COVERED 1-2 SECTION II - ADDITIONAL COVERED LOSS OR DAMAGE: 1. ASBESTOS CLEANUP, ABATEMENT AND REMOVAL 2 2. LOSS OF REVENUE, EXTRA EXPENSE AND EXPEDITING EXPENSE . . . . 2 3. DEBRIS REMOVAL 2 4. LEASEHOLD INTEREST 2-3 • 5. POLLUTANT CLEANUP AND REMOVAL 3 6. ERRORS 3 7. RENTAL REIMBURSEMENT 3 8. ARSON REWARD 4 9. ACCOUNTS RECEIVABLE 4 10. VALUABLE PAPERS AND RECORDS 4 11. YEAR 2000 EXTRA EXPENSE 4 SECTION III - CAUSES OF LOSS AND DAMAGES NOT COVERED 4-6 SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGE 6-7 SECTION V - LIMITS OF COVERAGE AND VALUATION ... . . ... . . . .,,. 7-11 SECTION VI - DEFINITIONS 11-16 SECTION VII - CONDITIONS 16-19 • LMCIT MPCB(11-99) i , • MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE WHAT IT IS AND WHERE YOU CAN FIND IT INDEX ri-----\,„7 BOND COVERAGE - PART THREE LW League of Minnesota Cities Cities promoting excellence J PAGE SECTION I - COVERAGE AGREEMENT 1 SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED 1-2 0 SECTION III - LIMITS OF COVERAGE 2 SECTION IV - DEFINITIONS 2-3 SECTION V - CONDITIONS 3-6 • LMCIT MPCB(11-99) iii • ` MUNICIPAL PROPERTY, CRIME AND BOND COVERAGE WHAT IT IS AND WHERE YOU CAN FIND IT INDEX CRIME COVERAGE - PART TWO LMC League of Minnesota Cities Cities promoting excellence PAGE SECTION I - CRIME COVERAGE 1 SECTION II - EXCLUSIONS 1 SECTION III - LIMITS OF COVERAGE AND VALUATION 2 SECTION IV - CONDITIONS 2-5 SECTION V - DEFINITIONS 5-6 • LMCIT MPCB(11-99) ii • MUNICIPAL PROPERTY COVERAGE PART ONE Various provisions in this covenant restrict coverage. Insurance Trust. The word you and your refer to the Read the entire covenant carefully to determine city shown in the Declarations. The words we, us, rights, duties and what is or is not covered. and our refer to LMCIT providing this covenant. Throughout this covenant, the word city refers to the Other words and phrases that appear in italics have first city shown in the Declarations. The word special meaning, as given in SECTION VI - LMCIT refers to the League of Minnesota Cities DEFINITIONS. SECTION I - PROPERTY COVERAGE I. COVERAGE AGREEMENT 3. We will pay for loss to your Buildings in the Course of Construction, Alteration, or Repair as We will pay for direct physical loss of or damage to described in SECTION V - LIMITS OF your Covered Property unless the cause of loss or COVERAGE AND VALUATION. damage is not covered, as described under SECTION III - CAUSES OF LOSS AND 4. We will pay for loss to Covered Property in DAMAGES NOT COVERED. The amount we will Transit as described in SECTION V - LIMITS • pay for loss or damage is limited as described in OF COVERAGE AND VALUATION. SECTION V - LIMITS OF COVERAGE AND VALUATION. 5. We will pay for loss to Covered Property that is temporarily at an Unscheduled Location that A. COVERED PROPERTY you do not own, lease or operate, as described in SECTION V - LIMITS OF COVERAGE AND 1. We will cover the following types of property. VALUATION. a. Building/contents described in the Schedule B. PROPERTY NOT COVERED of Covered Property. 1. We will not cover the following types of b. Property in the open described in the property: Schedule of Covered Property. a. Aircraft; c. Mobile property valued at $25,000 replacement cost or less if identified as b. Animals (except for police dogs); covered on the Schedule of Covered Mobile Property; and -Mobile-property valued-at -c. Automobiles,-vehicles, or self-propelled greater than $25,000 replacement cost and is machines that are licensed for use on public listed on the Schedule of Covered Mobile roads; or Property. d. Bills, currency, deeds, evidences of debt, 2. We will pay for loss to Newly Acquired money, notes or securities; • Covered Property as described in SECTION V- LIMITS OF COVERAGE AND VALUATION. e. Bridges, roadways, walks, patios or other paved surfaces, except golf course property; LMCIT MPCB(11-99) Page 1 of 19 f. Contraband or property in the course of (1) The lowest basement floor; or • illegal transportation or trade; (2) The surface of the ground, if there is no g. Cost of excavations,grading,backfilling or basement; filling; 1. Retaining walls that are not part of the h. Land, subsoil, crops or lawns, except golf Covered Property; course property; m. Transmission and distribution lines and i. Pilings, piers, wharves or docks; poles and equipment that are usual to the transmission of electricity. This does not j. Underground and buried pipes, flues or include substations and transformers. drains; n. Trees and shrubs that are not within 100 k. Foundations of buildings, structures, feet of a building. machinery or boilers if their foundations are below: SECTION II - ADDITIONAL COVERED LOSS OR DAMAGE We will provide coverage for the following loss or 3. DEBRIS REMOVAL damage unless the cause of loss or damage is not covered, as described under SECTION III - We will cover the following debris removal CAUSES OF LOSS AND DAMAGES NOT expenses: COVERED. The amount we will pay for loss or • damage is limited as described in SECTION V - a. The cost of removal of debris of Covered LIMITS OF COVERAGE AND VALUATION. Property and non-Covered Property from a covered location resulting from direct physical 1.ASBESTOS CLEANUP,ABATEMENT AND loss or damage to Covered Property; or REMOVAL b. The cost of removal of debris of non-Covered a. We will pay for your expense to clean up, Property from your covered location which abate or remove from Covered Property asbestos results from a specified cause of loss. particles that are discharged, dispersed, or released. 4. LEASEHOLD INTEREST b. The expenses to clean up, abate or remove a. We will provide coverage for leasehold asbestos particles will be paid only if such interest resulting from direct physical loss or expenses are incurred within 90 days of the date damage to Covered Property. of direct physical loss or damage. b. Leasehold interest means: 2. LOSS OF REVENUE, EXTRA EXPENSE AND EXPEDITING.EXPENSE -(1) The. excess of-.the•fair rental value of similar premises over the actual rent payable We will pay for the actual loss of revenue, extra by you as lessee (including any maintenance expense or expediting expense sustained by you due or operating charges paid by the lessee) to the necessary suspension of your operations during the unexpired term of the lease; and during the period of recovery caused by direct • physical loss or damage to any Covered Property. (2) The rental income that would have been earned by you from sublease agreements,over LMCIT MPCB(11-99) Page 2 of 19 and above the rental expense specified in the or escape of the pollutants is caused by any ' lease between you and the lessor. covered cause of loss. c. When Covered Property is rendered wholly or b. We will cover the costs of testing that are partially untenantable by a direct physical loss or incurred in the course of extracting pollutants damage and the lease is canceled by the lessor in from land or water and any expense incurred to accordance with the conditions of the lease or by test for, monitor, or assess the existence, statutory requirements of the state in which the concentration, or effects of pollutants. damaged or destroyed Covered Property is located, we will cover the pro rata proportion 6. ERRORS from the date of loss to expiration date of the lease (to be paid without discount) on your a. We will pay for loss to any Covered Property interest in: if the loss is not covered solely because of: (1) Improvements and betterments to Covered (1) Any inadvertent error in the description Property during the unexpired term of the or location of the building and contents, lease that is not covered under any other property in the open or mobile property section of Part One of the covenant; or covered by the covenant, which inadvertent error existed at the inception date of the (2) The amount of advance rental paid by you covenant; or and not recoverable under the terms of the lease for the unexpired term of the lease. (2) Any inadvertent error in the description or location of the building/contents,property d. We will cover your leasehold interest when in the open or mobile property in your Covered Property is rendered wholly or endorsements to the covenant; or • partially untenantable and the lease is canceled by the lessor in accordance with the conditions of (3) Failing through an inadvertent error to the lease or by statutory requirements of the state schedule (a) any building/contents, property in which the damaged or destroyed Covered in the open, or mobile property owned by the Property is located. city at the inception of the covenant, or (b) any newly acquired building/contents, e. We will cover your leasehold interest for the property in the open or mobile property first three months succeeding the date of the loss during the term of the coverage document. and the net lease interest for the remaining months of the unexpired lease. We will not be (4) It is a condition of this coverage that such liable for any increase of loss that may be inadvertent error shall be reported and occasioned by the suspension, lapse, or corrected when discovered. cancellation of any license, or by the exercising of any option to cancel the lease. 7. RENTAL REIMBURSEMENT 5. POLLUTANT CLEANUP AND REMOVAL We will pay for rental reimbursement expenses incurred by you for the rental of mobile property. a. We will provide coverage for pollutant cleanup and removal resulting from direct a. No deductibles apply to this coverage. physical loss or damage to Covered Property. We will cover the expense to extract pollutants b. This coverage does not apply while there is from land or water on a covered location if the spare or reserve equipment available to you for discharge,dispersal,seepage,migration,release, your operations. • LMCIT MPCB(11-99) Page 3 of 19 8. ARSON REWARD and records caused by direct physical loss or damage to valuable papers and records. • In the event that a covered fire loss was the result of an act of arson, we will reimburse you for rewards 11. YEAR 2000 EXTRA EXPENSE you pay for information leading to convictions for that act of arson. We will pay for your expenses that are necessarily incurred: 9. ACCOUNTS RECEIVABLE a. To mitigate loss that is directly or indirectly We will pay for loss or damage to your accounts caused by a year 2000 problem; and receivable caused by direct physical loss or damage to your accounts receivable. b. To implement any contingency plan to maintain your operations if any of your operations 10. VALUABLE PAPERS AND RECORDS are impaired by a year 2000 problem. We will pay for loss or damage to valuable papers We will not pay any of your expenses to determine or to correct a year 2000 problem. SECTION III - CAUSES OF LOSS AND DAMAGES NOT COVERED I. CAUSES OF LOSS NOT COVERED (3) Door,windows or other openings, except for coverage that is provided A. We will not pay for loss or damage caused by Water and Supplemental Flood directly or indirectly by any of the following. Coverage as described in SECTION Such loss or damage is excluded regardless of IV-WATER AND SUPPLEMENTAL • any other cause or event that contributes FLOOD COVERAGE. concurrently or in any sequence to the loss. But if loss or damage by fire, explosion or 1. Water sprinkler leakage results, we will pay for that resulting loss or damage. a. Flood, surface water, waves, tides, tidal waves, overflow of any body of This exclusion does not apply to: water, or their spray, all whether driven by wind or not; a. Mobile property b. Mudslide or mudflow; 2. Nuclear Hazard c. Water that backs up or overflows from Nuclear reaction or radiation, or a sewer, drain or sump; or radioactive contamination, however caused. d. Water under the ground surface pressing on, or flowing or seeping But if loss or damage by fire results, we through: will pay for that.resulting loss or damage. (1) Foundations, walls, floors or 3. War paved surfaces; a. War,including undeclared or civil war; (2) Basements, whether paved or not; • or LMCIT MPCB(11-99) Page 4 of 19 b. Warlike action by a military force, a. Acting alone or in collusion with including action in hindering or defending others; or against an actual or expected attack, by • any government, sovereign or other b. Whether or not occurring during the authority using military personnel or other hours of employment. agents; or This exclusion does not apply to acts of c. Insurrection, rebellion, revolution, destruction by your employees; but theft by usurped power, or action taken by employees is not covered. governmental authority in hindering or defending against any of these. 4. Damages caused by explosion of steam boilers, steam pipes, steam engines or steam 4. Year 2000 Claims turbines owned or leased by you,or operated under your control. Any year 2000 problem. But if loss or damage by fire or combustion But if loss or damage by a specified cause explosion results, we will pay for that of loss results, we will pay for the resulting resulting loss or damage. loss or damage. We will also pay for loss or damage caused This exclusion does not apply to Year by or resulting from the explosion of gases 2000 Extra Expense as provided in Section or fuel within the flues or passages through II, 11. which the gases of combustion pass. II. DAMAGES NOT COVERED 5. The cost to repair or replace faulty workmanship, materials, construction or • A. We will not pay for the following damages: design. 1. Damage to your electrical devices, This exclusion does not apply to: appliances or wires caused by artificially generated electric current including electric a. Computer equipment data and media. arcing. 6. The cost to repair or replace mechanical This exclusion does not apply to: breakdown, including rupture or bursting caused by centrifugal force. a. Computer equipment data and media. This exclusion does not apply to: 2. Damage from the discharge, dispersal, seepage, migration, release or escape of a. Computer equipment data and media. pollutants. 7. Damages caused by: This exclusion does not apply if the discharge, dispersal, migration, a..rRust,_ corrosion, fungus, decay, release of pollutants is itself caused by a deterioration, hidden or latent defect, specified cause of loss. mold or disease; 3. Damages caused by dishonest or b. Settling, shrinking or expanding; or criminal acts by you, or your employees, c. Wear and tear. • LMCIT MPCB(11-99) Page 5 of 19 This exclusion does not apply if the above 9. Seizure or destruction of property by damage results from a specified cause of order of governmental authority. loss. But we also will pay for acts of destruction The exclusion for damages caused by disease ordered by governmental authority and taken does not apply to police dogs. at the time of a fire to prevent its spread, if the fire would be covered under this 8. Unexplained loss, mysterious Coverage Part. disappearance, or shortage disclosed upon taking inventory. SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGE I. COVERAGE AGREEMENT (c) Doors, windows or other openings. A. For your building/contents or property in But if loss or damage by fire, explosion or the open, subject to the exclusions and sprinkler leakage results, we will not pay for limitations in Paragraph B below, we will pay that resulting loss or damage under this for: SECTION IV. 1. Direct physical loss of or damage to your B.1. For any building/contents or property in buildings/contents or property in the open the open for which Code A is shown on the described in the Schedule of Covered Schedule of Covered Property, no additional Property; and exclusions apply to the coverage provided under • this section. 2. Any additional covered losses or damages as described in SECTION II-ADDITIONAL 2. For any building/contents or property in COVERED LOSS OR DAMAGE as a result the open for which Code B is shown on the of direct physical loss of or damage to your Schedule of Covered Property, the coverage building/contents or property in the open; provided by this section is specifically in addition to and in excess of the applicable which are caused by: National Flood Insurance Program Coverage. 1. Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or 3. For any building/contents or property in their spray,all weather driven by wind or not; the open for which Code C is shown on the Schedule of Covered Property, we will not 2. Mudslide or mudflow; pay for any loss or any damage resulting from any occurrence for which a National 3. Water that backs up or overflows from a Flood Insurance Program Coverage would sewer, drain or sump; or cover any loss or any damage. 4. Water.under the.ground-surface-pressing 4—For .any.,.Newly. Acquired Covered on, or flowing or seeping through: Property, Buildings in the Course of Construction,Alterations or Repair,Covered (a) Foundations, walls, floors or paved Property in Transit or Covered Property that surfaces; is temporarily at an Unscheduled Location as provided by SECTION I, I.A., Covered • (b) Basements, whether paved or not; or Property,that are not shown on the Schedule LMCIT MPCB(11-99) Page 6 of 19 of Covered Property, we will pay any loss or II. LIMITS OF COVERAGE any damage as if the WATER AND SUPPLEMENTAL FLOOD COVERAGE The maximum amount we will pay for all losses or • was shown as Code C on the Schedule of damages covered under this SECTION IV is limited Covered Property. as described in SECTION V - LIMITS OF COVERAGE AND VALUATION. SECTION V - LIMITS OF COVERAGE AND VALUATION A. LIMITS OF COVERAGE 4. The limits for the Additional Covered Loss or Damage are specified in Item 5 of the 1. We will not pay for more than the blanket Declaration and are listed below. The limits are limit per occurrence specified in Item 5 of the in addition to the blanket limit of occurrence. Declarations. a. Asbestos Clean Up, Abatement and 2. The sublimits stated below are per occurrence Removal: $250,000 Per Location and are part of and not in addition to the blanket limit of occurrence: b. Loss of Revenue, Extra Expense and Expediting Expense: $5,000,000 Per a. Computer Equipment Data and Media: Occurrence $1,000,000 c. Debris Removal: $1,000,000 Per b. Fine Arts: $500,000 Occurrence c. Covered Property in Transit: $250,000 However, if there is no direct physical loss or damage to Covered Property, the most we • d. Unscheduled Locations: $500,000 will pay is $50,000 per occurrence. e. Personal Effects: $25,000 per occurrence, These limits do not apply to golf course but not to exceed $2,500 per employee property. f. Golf Course Property: $100,000 per d. Leasehold Interest: $500,000 Per Location occurrence for direct damage to Golf Course Property and Debris Removal of e. Pollutant Cleanup and Removal: $10,000 Covered Property and Non-Covered Per Location Property f. Errors: 90% of the loss, subject to g. Business Personal Effects: $25,000 per $500,000 Per Occurrence occurrence, but not to exceed $5,000 per employee g. Rental Reimbursement: $25,000 Per Annual Aggregate 3. The sublimits stated below are in addition to the blanket limit of.occurrence. ..h...Arson.Reward: .$5,000.Per Fire Loss a. Newly Acquired Covered Property: i. Accounts Receivable: $500,000 Per $5,000,000 Location b. Buildings in the Course of Construction, j. Valuable Papers and Records: $500,000 Alterations or Repair: $2,000,000 Per Location • LMCIT MPCB(11-99) Page 7 of 19 • k. Year 2000 Extra Expense: 85% of the b. Adjustment. expense, up to a limit of $5,000 per occurrence and a $5,000 Annual Except as provided in 2. below, in the Aggregate event of direct physical loss of or damage to your Covered Property, the basis of 5. The limits for Water and Supplemental Flood adjustment will be as follows: Coverage are specified in Item 5 of the Declarations and are stated below: (1) If the Covered Party is destroyed and is replaced or rebuilt, LMCIT will pay the a. $500,000 per occurrence. replacement cost. If the Covered Property is replaced at a different site, the cost b. The Water and Supplemental Flood cannot be greater than if you would have Coverage Annual Aggregate is the most rebuilt at the same site. we will pay for Water and Supplemental Flood Coverage loss during the annual (2) If the Covered Property is destroyed coverage period. and is not replaced or rebuilt,LMCIT will pay the appraised value of the property at c. The sublimits stated below are per the time of the loss. occurrence and are part of and not in addition to the per occurrence limit: (3) If the Covered Property is damaged but not destroyed and is repaired, LMCIT (1) Golf Course Property: $100,000 will pay the actual replacement cost to repair the property plus the amount of the • (2) Property In Transit: $250,000 reduction if any in the appraised value of the repaired property. B. LOSS VALUATION (4) If the Covered Property is damaged 1. General Provisions. but not destroyed and remains in service without being repaired, LMCIT will pay a. Definitions. the amount of the reduction if any in the appraised value of the damaged property. (1) Covered Property is deemed to be destroyed if the replacement cost to rebuild (5) If the Covered Property is damaged or replace the property is less than the sum but not destroyed and the city elects not to of the replacement cost to repair the repair it but to raze or otherwise dispose of property plus the reduction if any in the the property, LMCIT will pay to the city appraised value of the repaired property. the estimated replacement cost to repair the property. (2) Replacement cost means the cost to repair or replace Covered Property that is In any event,LMCIT will not pay you more damaged or destroyed,using new materials than your financial interest in the Covered of equivalent size, kind, and quality. Property. Replacement cost includes any additional costs necessary to comply with building codes. • LMCIT MPCB(11-99) Page 8 of 19 2. Special Provisions. adjusting to reflect the normal business during the loss month. a. Valuable papers. • d. Fine Arts. For valuable papers and records,LMCIT will pay the cost of blank materials for For fine arts which are destroyed,LMCIT reproducing the records, plus the cost of will pay the appraised value,regardless of labor to transcribe or copy the records whether the Covered Property is replaced when there is a duplicate, or to reproduce or not. the data of records. e. Mobile Property. b. Computer equipment, data and media. For mobile property that is damaged or For computer equipment, data, or media, destroyed, LMCIT will not pay for more LMCIT will pay the cost to replace than the amount you actually spent to destroyed equipment with equipment of repair or replace the damaged mobile greater processing ability; the cost to property; or 200% of the appraised value reproduce or restore the data;and the cost of the damaged property, whichever is to repair or replace media with the same less. kind and quality of material. Any replacement equipment must be able to f. Police Dogs. perform the same function as the destroyed equipment. A police dog is considered to be destroyed if because of injury or disease Unauthorized intrusive codes or the dog is not able to perform the dog's programming, commonly known as a normal functions and there is no • computer virus, that are entered into your reasonable prospect that the dog will be computer equipment, data and media, are able to do so. considered direct physical loss of or damage to your Covered Property. (1) For police dogs that are destroyed, LMCIT will pay for the cost to replace the c. Accounts Receivable. dog and the cost of any necessary training. For accounts receivable,LMCIT will pay for all amounts due from your customers (2) If a police dog is injured as a result of that you are unable to collect; interest an accident or an intentional act, LMCIT charges on any loan required to offset will pay the cost of necessary treatment amounts you are unable to collect pending and care to enable the dog to resume our payment of these amounts; collection performing the dog's normal functions. expenses in excess of your normal But LMCIT will not pay the cost of collection expenses that are made treatment and care to treat or prevent necessary by the loss; and other disease. reasonable expenses you incur to re- establish your accounts receivable. If you For any single occurrence, LMCIT will are unable to establish the amount of not pay more than the amount you accounts receivable outstanding at the actually spend to replace the police dog or time of the loss, we will use the average for care and treatment of the police dog, monthly amounts of accounts receivable or 200% of the appraised value of the for the 12 months immediately preceding police dog, whichever is less. • the month in which the loss occurs, LMCIT MPCB(11-99) Page 9 of 19 g. Trees and Shrubs. (4) Other relevant sources of information, including: 4110 (1) For a tree or shrub which is destroyed,LMCIT will pay the actual cost (a) Your financial records and to replace it with a tree or shrub of accounting procedures; similar type and of a size that is normally considered to be reasonable and practical (b) Bills,invoices and other vouchers; to transplant, regardless of whether the and tree or shrub is replaced or not. (c) Deeds, liens or contracts. (2) For a tree or shrub that is damaged but not destroyed, LMCIT will pay the b. The amount of extra expense loss LMCIT actual cost of any service, treatment, or will pay, will be determined based on: repair that is actually performed. (1) All expenses that exceed the normal But, we will not pay more than the actual operating expenses that would have been cost to replace it with a tree or shrub of incurred by operations during the period similar type and of a size that is normally of recovery if no direct physical loss or considered to be reasonable and practical damage had occurred. We will deduct to transplant. from the total of such expenses: h. Business Personal Effects. (a) The salvage value that remains of any property bought for temporary Notwithstanding the provisions of use during the period of recovery paragraph 13 of the Common Conditions, once operations are resumed; and • LMCIT coverage for business personal effects is primary with respect to any (b) Any extra expense that is paid for coverage provided under the employee's by other insurance, except for homeowner's insurance or similar insurance that is written subject to the coverage. same plan, terms and conditions and provisions as this insurance; and 3. Loss of Revenue, Extra Expense and Expediting Expense Provisions (2) All necessary expenses that reduce the business income loss that otherwise a. The amount of loss of revenue loss LMCIT would have been incurred. will pay, will be determined based on: We will reduce the amount of your: (1) The gross revenue of the city before the direct physical loss or damage a. Loss of revenue loss, other than extra occurred; expense or expediting expense to the extent you can resume your operations, in whole or (2) The likely gross revenue of the city if in part, by using damaged or undamaged no physical loss or damage had occurred;_ property(including merchandise or stock)at the described location or elsewhere. (3) The operating expenses, including payroll expenses, necessary to resume b. Extra expense or expediting expense loss operations with the same quality of to the extent you can return your operations service that existed just before the direct to normal and discontinue such extra expense • physical loss or damage, and or expediting expense. LMCIT MPCB(11-99) Page 10 of 19 However, if you do not resume operations, Property. or do not resume operations as quickly as possible, we will pay based on the length of In this event, each party will select a 411 time it would have taken to resume competent and impartial person. Each operations as quickly as possible. appointee shall be a professional appraiser or other person with appropriate professional 4. Appraisal and Arbitration. expertise. The two appointees will select an umpire. If they cannot agree, either may Either party may make a written demand for request that selection be made by a judge of arbitration if the city and LMCIT disagree on a court having jurisdiction. The two any of the following: appointees will each separately state their respective estimates of the value or cost a. The appraised value of Covered Property which is in question. If they fail to agree, prior to the loss or damage; they will submit their differences to the umpire. A decision agreed to by any two b. The appraised value of Covered Property will be binding. Each party will: after the loss or damage; a. Pay the cost of its own appointee; and c. The appraised value of Covered Property after repair; or - b. Share equally the expense of the umpire and any other expenses related to the d. The estimated cost to repair the Covered arbitration process. SECTION VI - DEFINITIONS Accounts Receivable means: c. All unearned interest and service charges. 1. All amounts due from your customers that you Automobile means a land motor vehicle, trailer or are unable to collect and there is a loss; semi-trailer designed for travel on public roads. 2. Interest charges on any loan required to offset Blanket means the limit of coverage can be applied amounts you are unable to collect pending our to any of the following: payment of these accounts; 1. Any covered building at each location; 3. Collection expenses in excess of your normal collection expenses that are made necessary by 2. Any covered contents at each location; the loss; and 3. Any covered property in the open at each 4. Other reasonable expenses that you incur to re- location; or establish your records of accounts receivable. 4. Any covered mobile property. 5. Accounts receivable does-not include: Building means the building or structure including: a. The amount of the accounts that you are able to re-establish or collect; 1. Completed additions; b. An amount to allow for probable bad debts 2. Permanently installed fixtures, machinery and that you are normally unable to collect; and equipment; • LMCIT MPCB(11-99) Page 11 of 19 3. Outdoor fixtures; 3. Municipal power agency; • 4. Contents owned by you that is used to maintain 4. Municipal gas agency; or service the building or structure or its premises, including: 5. Hospital or nursing home board or commission; a. Fire extinguishing equipment; 6. Airport commission; b. Outdoor furniture; 7. Welfare or public relief agency; ; c. Floor coverings; and 8. School board; or d. Appliances used for refrigerating,ventilating, 9. Joint powers entity. cooking, dishwashing or laundering; or Computer Equipment, Data and Media means a 5. If not covered by other insurance: network of machine components capable of accepting information, processing it according to a. Additions under construction, alterations and plan and producing the desired results. It includes: repairs to the building or structure; 1. Air conditioning, fire protection equipment and b. Materials,equipment,supplies and temporary electrical equipment used exclusively in your structures, on or within 100 feet of the computer operations; described building, used for making additions,alterations or repairs to the building 2. Facts, concepts or instructions in a form usable • or structure. for communications; Building/Contents as described in the Schedule of 3. Interpretation or processing by automatic means; Covered Property, means the following: or 1. Building; or 4. Computer programs and materials on which the data is recorded. 2. Contents. • Contents means property located in or on the Business Personal Effects means personal property Y buildin described in the Declarations or in the open of your employees that is used to maintain the (or in a vehicle) within 100 feet of the described Y ( ) operations of the city. building, consisting of the following: City means governmental body or entity first named 1. Furniture and fixtures; in the Declarations. For purposes of this coverage, city includes relief associations. Unless specifically 2. Machinery and equipment; named in the Declarations, city shall not include: 3. Stock; 1. Gas, electrical, or steam utilities commission; 4. All other contents owned by you and used in 2. Port authority, housing and redevelopment your municipal operations; authority,economic development authority,area or municipal redevelopment authority,or similar 5. Labor, materials or services furnished or agency; arranged by you on contents of others; LMCIT MPCB(11-99) Page 12 of 19 6. Your use interest as tenant in improvements and independent contractors; betterments. Improvements and betterments are fixtures, alterations, installations or additions: 7. City relief association members, officers, and • employees; or a. Made a part of the building or structure you occupy but do not own; and 8. Any natural person employed by an employment contractor while that person is subject to your b. You acquired or made at your expense but direction and control and performing services for cannot legally remove. you excluding, however, any such person while having care and custody of property outside the 7. Contents of others that are in your care, custody premises. and control. But employee does not mean any agent, broker, However, our payment for loss or damage to factor, commission merchant, consignee, contents will be for the account of the owner of independent contractor or representative of the the property. same general character. 8. Trees and shrubs; Expediting expenses means the reasonable extra cost of temporary repair and expediting the repair of 9. Accounts receivable; damaged Covered Property, overtime and express freight or other rapid means of transportation. 10. Computer equipment data or media; Extra expense means the excess total cost 11. Valuable papers and records; necessarily incurred to continue your operations as reasonably as practicable during the period of 12. Personal Effects; or recovery that is over and above the cost that would • normally have been incurred to conduct the 13. Fine Arts. operations during the same period had no loss or damage occurred. It includes: Employee means: 1. Extra expense to avoid or minimize the 1. A person whom you compensate directly by suspension of business and to continue salary, wages or commissions and who you have operations: the right to direct or control while performing duties for you; a. At the described location; or 2. Member of the city council; b. At a replacement location or at temporary locations, including: 3. Member of a city board, commission, or committee which is not excluded by the (i) Relocation expenses; and definition of city; (ii) Costs to equip and operate the 4. Elected or appointed official of the city; _ replacement or temporary locations. 5. Volunteer person or organization while acting on 2. Extra expense to minimize the suspension of behalf of the city and subject to the city's business if you cannot continue operations. direction and control; 3. Extra expense to: 6. Other authorized person or agent of the city • while acting on behalf of the city, but excludes a. Repair or replace any Covered Property; or LMCIT MPCB(11-99) Page 13 of 19 b. Research, replace or restore the lost 1. Machinery or equipment designed for use information on damaged valuable papers and principally off public roads; records; 2. Police Dogs; to the extent it reduces the amount of loss that otherwise would have been payable under this 3. Vehicles maintained for use solely on or next to covenant. locations owned or rented by you and not licensed for highway use; Fine Arts means property or articles of artistic or historical value including paintings, etchings, 4. Vehicles and its equipment whether self- pictures, tapestries, statuary, marbles, bronzes, propelled or not,maintained primarily to provide porcelain, rare glass, antique silver, china, books mobility to permanently mounted equipment; and manuscripts, rugs and similar articles. 5. Tools; Golf Course Property means bridges, paved roadways, paved cart paths and other paved 6. Business Personal Effects; or surfaces,shelters,restrooms,ball washers,screens, flags, markers, signs, tees, fairways and greens. 7. Mobile Property in your care, custody and control. Joint Powers Entity means an operating entity created by two or more governmental units entering Occurrence means an accident or event that causes into an agreement as provided by statute for the a direct physical loss or damage to Covered joint exercise of governmental powers. An Property. Any continuous accident or event that intergovernmental agreement will be deemed to causes more than one direct physical loss or create a joint powers entity if the agreement damage to Covered Property during a seventy-two establishes a board with the effective power to do (72)hour period constitutes an accident or event as any of the following, regardless of whether the a single occurrence. specific consent of the constituent governmental units may also be required: Operations means: 1. To receive and expend funds; 1. Your city activities occurring at the described location; or 2. To enter into contracts; 2. The tenantability of the described location. 3. To hire employees; Period of Recovery means the period of time that: 4. To purchase or otherwise acquire or hold real or personal property; or 1. Begins immediately after the time of direct physical loss or damage to Covered Property. 5. To sue or be sued. 2. Ends on the earlier of: Location means the site of any building/contents or property in the open listed in the Declarations or a. The date Covered Property is actually attached schedules. repaired, rebuilt or replaced and operations are resumed; and your operations would Loss of Revenue means gross revenue, including generate the loss of revenue amount that rental value, less charges and expenses that do not would have existed if no direct physical or necessarily continue. damage had occurred; or • Mobile property means: LMCIT MPCB(11-99) Page 14 of 19 b. Sixty (60) consecutive days after the date 1. Sinkhole collapse means the sudden sinking or ' tY ( ) Y when the Covered Property is actually collapse of land into underground empty spaces • repaired, rebuilt or replaced and operations created by the action of water on limestone or are resumed. dolomite. This cause of loss does not include: However, the expiration date of the covenant a. The cost of filling sinkholes; or will not cut short the period of recovery. b. Sinking or collapse of land into man-made Personal Effects means personal property of your underground cavities. employees, other than business personal effects. 2. Falling Object does not include loss or damage Pollutants means any solid, liquid, gaseous or to: thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and a. Property in the open; or waste. Waste includes materials to be recycled, reconditioned or reclaimed. b. The interior of a building or structure, or property inside a building or structure,unless Property in the Open means: the roof or an outside wall of the building or structure is first damaged by a falling object. 1. Equipment such as, but not limited to, benches, fences, light poles, playground equipment, 3. Water Damage means accidental discharge or statues, scoreboards, traffic signals or signs that leakage of water or steam from any part of a are in the open and are not part of a building; or system or appliance containing water or steam. 2. Golf Course Property. Stock means merchandise held in storage or for sale, raw materials and in-process or finished Rental Value means the sum of: goods, including supplies used in their packing or shipping. 1. The total anticipated gross rental income from tenant occupancy of the Covered Property as System or system component means any of the furnished and equipped by you; and following: 2. The amount of all continuing charges that are the 1. Computer hardware,including microprocessors; legal obligation of the tenant and that would otherwise be your obligation; and 2. Computer application software; 3. The fair rental value of any portion of the 3. Computer operating systems and related Covered Property that you occupy. software; Specified Causes of Loss means fire; lightning; 4. Computer networks; explosion; windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; 5. Microprocessors or other computer chips not leakage discharge from fire extinguishing part of any computer system; or equipment; sinkhole collapse; volcanic action; • falling objects; weight of snow, ice or sleet; or 6. Any other computerized or electronic equipment water damage: or components. • LMCIT MPCB(11-99) Page 15 of 19 Valuable Papers and Records means inscribed, 2. Any actual or alleged failure, malfunction, or printed or written documents, manuscripts or inadequacy of any product, service, data, or records, including abstracts, books, deeds, function that directly or indirectly uses or relies drawings, films, maps and mortgages. on any system or system component, which is due to any year 2000 problem; or But valuable papers and records does not mean money or securities, converted data, programs or 3. Any advice, consultation, design, evaluation, instructions used inyourdata processing operations, inspection, installation, maintenance, repair, including the materials on which the data is replacement, or supervision done by you or your recorded. employees to determine, rectify, or test for any potential or actual year 2000 problem. Year 2000 claim means any claim for damages arising directly or indirectly out of: Year 2000 problem means the inability of any system or system component to correctly recognize, 1. Any actual or alleged failure, malfunction, or process, distinguish, interpret, or accept the year inadequacy of any system or system component, 2000 and beyond. whether belonging to the city or to others, which is due to any year 2000 problem; SECTION VII - CONDITIONS A. CONTROL OF PROPERTY damage occurred. Any act or neglect of any person other than you D. NO BENEFIT TO BAILEE beyond your direction or control will not affect this coverage. No person or organization, other than you, having custody of Covered Property will benefit from this The breach of any condition of this Coverage Part coverage. at any one or more locations will not affect coverage at any location where, at the time of loss E. COVERAGE PERIOD, COVERAGE or damage, the breach of condition does not exist. TERRITORY B. COVERAGE UNDER TWO OR MORE Under this Coverage Part: COVERAGES 1. We cover loss or damage commencing: If two or more of this covenant's coverages apply to the same loss or damage, we will not pay more than a. During the coverage period shown in the the actual amount of the loss or damage. Declarations; and C. LEGAL ACTION AGAINST US b. Within the coverage territory. No one may bring legal action against us under this 2. The coverage territory is: Coverage Part unless: . a. The United States of America (including its 1. There has been full compliance with all of the territories and possessions); terms of the Coverage Part; and b. Puerto Rico; and 2. The action is brought within two (2) years after • the date on which the direct physical loss or c. Canada. LMCIT MPCB(11-99) Page 16 of 19 F. LOSS CONDITIONS i. Cooperate with us in the investigation, or settlement of the claim. 1. Abandonment. • 3. Loss Payment. You cannot abandon your property to us. a. We will give notice of our intentions within 2. Duties In The Event of Loss or Damage. 30 days after we receive the sworn statement of loss. You must see that the following are done in the event of loss or damage to Covered b. We may adjust losses with the owners of Property: lost or damaged property if other than you. If we pay the owners,such payments will satisfy a. Notify the police if a law may have been your claims against us for the owners' broken. property. We will not pay the owners more than their financial interest in the Covered b. Give us prompt notice of the loss or Property. damage. Include a description of the property involved. 4. Recovered Property. c. As soon as possible, give us a description If either you or we recover any property after of how, when and where the loss or damage loss settlement, that party must give the other occurred. prompt notice. At your option, the property will be returned to you. You must then return d. Take all reasonable steps to protect the to us the amount we paid to you for the Covered Property from further damage. If property. We will pay recovery expenses and feasible, set the damaged property aside and the expenses to repair the Recovered • in the best possible order for examination. Property, subject to the amount applying Also keep record of your expenses, for under this covenant. consideration in the settlement of the claim. G. PREMIUMS AND PREMIUM e. At our request, give us complete ADJUSTMENTS inventories of the damaged and undamaged property. Include quantities, costs, values, 1. You agree to furnish us with a Schedule of and amount claim of loss demand. Locations and Buildings, Schedule of Mobile Property and Schedule and Location of Property f. Permit us to inspect the property and in the Open prior to the beginning of each records proving the loss or damage. covenant period. The initial annual premiums will be based upon these Schedules and the g. If requested, permit us to question you appropriate replacement cost values. under oath at such times as may be reasonably required about any matter relating to this 2. You will pay us additional premium if: covenant or your claim, including your books and records. In such event, your answers a. Building/contents, mobile equipment or must be signed. property in the open are added during the covenant period. h. Send us a signed, sworn statement of loss containing the information we request to settle b. Additional Covered Loss or Damage the claim. You must do this within 60 days limits, or property sublimits are increased after our request. We will supply you with during the covenant period. the necessary forms. LMCIT MPCB(11-99) Page 17 of 19 • c. Buildings in the Course of Construction, I. DEDUCTIBLE Alteration or Repair are added during the covenant period. All losses, damages, or expenses arising out of any one occurrence will be adjusted (net of salvage, d. Newly acquired Covered Property is added subrogation, recoveries, and any other recoveries) during the covenant period. as one loss, and from the amount of this adjusted loss will be deducted the sum that you selected as a 3. We will return premium to you if: deductible as shown in Item 7 of the Declarations for property coverage. a. Building/contents, mobile equipment or property in the open are deleted during the The deductible applies against the total loss incurred covenant period. by you from any one occurrence, regardless of the number of locations involved. b. Additional Covered Loss or Damage limits or property sublimits are reduced during the If two or more deductibles in Item 7 of the covenant period. Declarations for property coverage apply to one occurrence for you, the total to be deducted will not H. CANCELLATION exceed the largest deductible applicable. 1. You may cancel Part One of this covenant. J. MORTGAGE HOLDERS You must mail or deliver not fewer than thirty (30) days' advance written notice to us stating 1. The term mortgage holder includes trustee. when the cancellation is to take effect. 2. We will pay for covered loss of or damage to 2. We may cancel Part One of this covenant. We buildings or structures to each mortgage holder must mail or deliver to you not fewer than thirty shown in the Declarations in their order of (30) days' advance written notice stating when precedence, as interests may appear. the cancellation is to take effect. Mailing that notice to you at your mailing address shown in 3. The mortgage holder has the right to receive the Declarations will be sufficient to prove loss payment even if the mortgage holder has notice. However, we may cancel with ten (10) started foreclosure or similar action on the days'written notice for nonpayment of premium. building or structure. 3. The covenant period will end on the day and 4. If we deny your claim because of your acts or hour stated in the cancellation notice. because you have failed to comply with the terms of this Coverage Part, the mortgage holder will 4. If Part One of this covenant is canceled, we still have the right to receive loss payment if the will send you any premium refund due. If we mortgage holder: cancel, the refund will be pro rata. If you cancel, the refund may be less than pro rata, a. Pays any premium due under this computed in accordance with our current Coverage Part at our request if you have cancellation rules. The cancellation will be failed to do so; effective even if we have not made or offered a refund. b. Submits a signed, sworn proof of loss within 60 days after receiving notice from us of your failure to do so; and • LMCIT MPCB(11-99) Page 18 of 19 c. Has notified us of any change in 7. If we do not renew this covenant, we will give • ownership, occupancy or substantial change written notice to the mortgage holder at least ten in risk known to the mortgage holder. (10) days before the expiration date of this covenant. All of the terms of this Coverage Part will then apply to the mortgage holder. K. TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US 5. If we pay the mortgage holder for any loss or damage and deny payment to you because of If any person or organization to or for whom we your acts or because you have failed to comply make payment under this Coverage Part has rights with the terms of this Coverage Part: to recover damages from another, those rights are transferred to us to the extent of our payment. That a. The mortgage holder's rights under the person or organization must do everything mortgage will be transferred to us to the necessary to secure our rights and must do nothing extent of the amount we pay; and after loss to impair them. But you may waive your rights against another party in writing: b. The mortgage holder's right to recover the full amount of the mortgage holder's claim 1. Prior to a loss to your Covered Property or will not be impaired. At our option, we may Covered Income. pay to the mortgage holder the whole principal on the mortgage plus any accrued 2. After a loss to your Covered Property or interest. In this event, your mortgage and Covered Income only if, at time of loss, that note will be transferred to us and you will pay party is one of the following: your remaining mortgage debt to us. • a. Someone insured by this covenant; 6. If we cancel this covenant, we will give written notice to the mortgage holder at least: b. A business firm: a. Ten (10) days before the effective date of (1) Owned or controlled by you; or cancellation if we cancel for your non- payment of premium; or (2) That owns or controls you; or b. Thirty (30) days before the effective date (3) Your tenant. of cancellation if we cancel for any other reason. This will not restrict your covenant. • LMCIT MPCB(11-99) Page 19 of 19 • • LMC League of Minnesota Cities Cities promoting excellence • J MUNICIPAL CRIME COVERAGE PART TWO • LMCIT MPCB(11-99) • MUNICIPAL CRIME COVERAGE PART TWO Various provisions in this covenant restrict coverage. Cities Insurance Trust. The word you and your refer Read the entire covenant carefully to determine to the city shown in the Declarations. The words we, rights, duties and what is or is not covered. us and our refer to LMCIT providing this covenant. Throughout this covenant, the word city refers to the Other words and phrases that appear in italics have S ty P PP first ci ty shown in the Declarations. special meaning, as given in SECTION IV - DEFINITIONS. The word LMCIT refers to the League of Minnesota SECTION I - COVERAGE AGREEMENT A. THEFT, DISAPPEARANCE, AND resulting directly from the theft, disappearance, DESTRUCTION-INSIDE THE PREMISES or destruction outside the premises in the care, custody and control of a messenger or an will for loss of money and w11 pay r o s ey nd securities armored motor vehicle. resulting directly from theft,. disa PP earance or destruction inside the or remises banking C. FORGERY OR ALTERATION P g premises. • We will pay for loss involving instruments of We will pay the loss of, and loss from damage to, payment resulting directly from the forgery or the property that contains the money and alteration of, on or in any instruments of securities; and loss from damage to the premises payment. resulting directly from the theft or attempted theft. If you are sued for refusing to an ay instrument P Y of payment, we will pay any reasonable legal B. THEFT, DISAPPEARANCE, AND expenses that you incur and pay in that defense. DESTRUCTION - OUTSIDE THE PREMISES The amount we pay will be in addition to the applicable Limit of Coverage. We will pay for loss of money and securities SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED We will not pay for loss or damages as specified P Y g P B. ACTS OF EMPLOYEES below: Loss resulting from any dishonest or criminal act A. ACCOUNTING OR ARITHMETICAL committed by any of your employees: ERRORS OR OMISSIONS 1. Acting alone or in collusion with other persons; Loss resulting from accounting or arithmetical or errors and omissions. • LMCIT MPCB(11-99) Page 1 of 8 • 2. While performing services for you or otherwise. F. LEGAL EXPENSES C. FIRE Expenses related to any legal action. Loss or damage to the premises resulting from G. NUCLEAR HAZARD fire, however caused. Loss resulting from nuclear reaction or radiation, D. GOVERNMENTAL ACTION or radioactive contamination, however caused. Loss resulting from seizure or destruction of H. VANDALISM property by order of governmental authority. Loss from damage to the premises or its exterior E. INDIRECT LOSS or to containers of money and securities by vandalism or malicious mischief. Loss that is an indirect result of any act or occurrence covered by this covenant including, I. WAR but not limited to, loss resulting from: Loss resulting from: 1. Your inability to realize income that you would have realized had there been no loss of, 1. War, including undeclared or civil war; or loss from damage to,money and securities; or instruments of payment. 2. Warlike action by a military force, including • action in hindering or defending against an 2. Payment of damages of any type for which actual or expected attack,by any government, you are legally liable. sovereign or other authority using military personnel or other agents; or But, we will pay compensatory damages arising directly from a loss covered under this 3. Insurrection, rebellion, revolution, usurped covenant. power, or action taken by governmental authority in hindering or defending against 3. Payment of costs, fees, or other expenses you any of these. incur in establishing either the existence or the amount of loss under this covenant. SECTION III - LIMITS OF COVERAGE The most we will pay in any one occurrence is the applicable Limit of Coverage shown in the Declarations. • LMCIT MPCB(11-99) Page 2 of 8 SECTION IV - DEFINITIONS • A. Banking premises means the interior of that 3. Member of a city board, commission, or portion of any building occupied by a banking committee which is not excluded by the institution or similar safe depository. definition of city; B. City means the governmental body or entity first 4. Elected or appointed official of the city; named in the Declarations. For purposes of this coverage, city includes relief associations. 5. Volunteer person or organization while acting on behalf of the city and subject to the city's Unless specifically named in the Declarations, direction and control; city shall not include: 6. Other authorized person or agent of the city 1. Gas, electrical, or steam utilities commission; while acting on behalf of the city,but excludes independent contractors; 2. Port Authority, housing and redevelopment authority, economic development authority, 7. City relief association members, officers, and area or municipal redevelopment authority,or employees; or similar agency; 8. Any natural person employed by an 3. Municipal power agency; employment contractor while that person is subject to your direction and control and 4. Municipal gas agency; performing services for you, excluding, however, any such person while having care • 5. Hospital or nursing home board or and custody of property outside the premises. commission; But employee does not mean any agent, broker, 6. Welfare or public relief agency; factor, commission merchant, consignee, independent contractor or representative of the 7. School board; same general character. 8. Airport commission; or D. Instruments of payment means checks, drafts, promissory notes or similar written promises, 9. Joint powers entity. orders or directions to pay a sum certain in money, that are: C. Employee means: 1. Made or drawn by or drawn upon you; or 1. A person whom you compensate directly by salary, wages or commissions and who you 2. Made or drawn by one acting as your agent; have the right to direct or control while or that are purported to have been so made or performing duties for you; .drawn. 2. Member of the city council; • LMC1T MPCB(11-99) Page 3 of 8 • E. Joint powers entity means an operating entity (a) Act or series of related acts involving one created by two or more governmental units or more persons; or entering into an agreement as provided by statute for the joint exercise of governmental powers. (b) Act or event, or series of related acts or An intergovernmental agreement will be deemed events not involving any person. to create a joint powers entity if the agreement establishes a board with the effective power to do 2. With respect to SECTION I - COVERAGE any of the following, regardless of whether the AGREEMENT, C., all loss caused by any specific consent of the constituent governmental person or in which that person is involved, units may also be required: whether the loss involves one or more instruments of payment. 1. To receive and expend funds; The date of the occurrence is the date on which 2. To enter into contracts; the act, event or loss is alleged to have taken place. If the loss or damages are alleged to have 3. To hire employees; arisen from a series of acts or events, the date of occurrence is deemed to be the date when the 4. To purchase or otherwise acquire and hold first such wrongful act or event took place or is real or personal property; or alleged to have taken place. 5. To sue or be sued. I. Premises means the interior of that portion of any building you occupy in conducting your business. • F. Messenger means you, any of your partners, or any employee while having care and custody of J. Securities means negotiable and nonnegotiable the money and securities outside the premises. instruments or contracts representing either money or other property and includes: G. Money means: 1. Tokens, tickets, revenue and other stamps 1. Currency, coins, and bank notes in current (whether represented by actual stamps or use and having a face value; and unused value in a meter) in current use; and 2. Travelers checks, register checks and money 2. Evidences of debt issued in connection with orders held for sale to the public. credit or charge cards, which cards are not issued by you; H. Occurrence means: but does not include money. 1. With respect to SECTION I - COVERAGE AGREEMENT, A. and B.: K. Theft means any act of stealing. • LMCIT MPCB(11-99) Page 4 of 8 SECTION V - CONDITIONS A. COVENANT PERIOD 1. Notify us as soon as possible. 1. The covenant period is shown in the 2. Submit to examination under oath at our Declarations. request and give us a signed statement of your answers. 2. Subject to the Loss Sustained During Prior Insurance condition, we will pay only for loss 3. Give us a detailed, sworn proof of loss within that you sustain through acts committed or 120 days. events occurring during the covenant period. 4. Cooperate with us in the investigation and B. DEDUCTIBLE settlement of any claim. 1. We will not pay for loss in any one occurrence E. INTERESTS COVERED unless the amount of loss exceeds the Deductible Amount shown in the Coverage provided by this covenant is limited to Declarations. We will then pay the amount of money and securities; and instruments of loss in excess of the Deductible Amount,up to payment; and damages to property or premises, the Limit of Coverage. as described under SECTION I - COVERAGE AGREEMENT, A., that: 2. You must: 1. You own or hold; or • a. Give us notice as soon as possible of any loss of the type insured under this 2. For which you are legally liable. covenant even though it falls entirely within the Deductible Amount. However, this covenant is for your benefit only. It provides no rights or benefits to any other b. Upon our request, give us a statement person or organization. describing the loss. F. LEGAL ACTION AGAINST US C. DISCOVERY PERIOD FOR LOSS You may not bring any legal action against us We will pay only for covered loss discovered no involving loss: later than one year from the end of the covenant period. 1. Unless you have complied with all the terms of this covenant; and D. DUTIES IN THE EVENT OF LOSS 2. Until ninety (90) days after you have filed After you discover a loss or a situation that may proof of loss with us; and result in loss of, or loss from damage to, money and securities; or instruments of payment, you 3. Unless brought within two (2) years from the must: date you discover the loss. LMCIT MPCB(11-99) Page 5 of 8 G. LOSS COVERED UNDER MORE THAN • ONE COVERAGE OF THIS COVENANT 2. The coverage under this Condition is part of, not in addition to, the Limits of Coverage If two or more coverages of this covenant apply applying to this covenant and is limited to the to the same loss, we will pay the lesser of: lesser of the amount recoverable under: 1. The actual amount of loss; or a. This covenant as of its effective date; or 2. The sum of the limits of coverage applicable b. The prior insurance had it remained in to that loss. effect. H. LOSS COVERED UNDER THIS COVENANT J. NON-CUMULATION OF LIMIT OF AND PRIOR COVENANT ISSUED BY US COVERAGE If any loss is covered: Regardless of the number of years this covenant remains in force or the number of premiums 1. Partly by this covenant, and paid, no Limit of Coverage cumulates from year to year or period to period. 2. Partly by the prior canceled or terminated covenant that we had issued to you or any K. OTHER INSURANCE predecessor in interest, the most we will pay is the larger of the amount recoverable under This covenant does not apply to loss recoverable this covenant or the prior covenant. or recovered under other insurance or indemnity. I. LOSS SUSTAINED DURING PRIOR However, if the limit of the other insurance or INSURANCE indemnity is insufficient to cover the entire amount of the loss,this covenant will apply to that 1. If you or any predecessor in interest sustained part of the loss, other than that falling within any loss during the period of any prior insurance deductible amount, not recoverable or recovered that you or the predecessor in interest could under the other insurance or indemnity. have recovered under that insurance, except However, this covenant will not apply to the that the time within which to discover loss had amount of loss that is more than the applicable expired, we will pay for it under this covenant Limit of Coverage shown in the Declarations. provided: L. RECORDS a. This covenant became effective at the time of cancellation or termination of the prior You must keep records of all money and securities; insurance; and and instruments of payment, so we can verify the amount of any loss. b. The loss would have been covered by this covenant had it been in effect when the M. RECOVERIES acts or events causing the loss were committed or occurred. 1. Any recoveries, less the cost of obtaining them,made after settlement of loss covered by this covenant, will be distributed as follows: • LMCIT MPCB(11-99) Page 6 of 8 a. To you, until you are reimbursed for any loss that you sustain that exceeds the Limit • of Coverage and the Deductible Amount,if a. Loss of money but only up to and including • any; its face value. We may, at our option, pay for loss of money issued by any country b. Then to us until we are reimbursed for the other than the United States of America: settlement made; (1) At face value in the money issued by c. Then to you until you are reimbursed for that country; or that part of the loss equal to the Deductible Amount, if any. (2) In the United States of America dollar equivalent determined by the rate of 2. Recoveries do not include any recovery: exchange on the day the loss was discovered. a. From insurance, suretyship, reinsurance, security or indemnity taken for our benefit; b. Loss of securities but only up to and or including their value at the close of business on the day the loss was b. Of original securities after duplicates of discovered, we may, at our option: them have been issued. - (1) Pay the value of such securities or N. TERRITORY replace them in kind, in which event you must assign to us all your rights, This covenant covers only acts committed or title and interest in and to those events occurring within the United States of securities; America, U.S. Virgin Islands, Puerto Rico, • Canal Zone, or Canada and while temporarily (2) Pay the cost of any Loss Securities outside this territory for a period not more than Bond required in connection with ninety (90) days. issuing duplicates of the securities. However, we will be liable only for the O. TRANSFER OF YOUR RIGHTS OF payment of so much of the cost of the RECOVERY AGAINST OTHERS TO US bond as would be charged for a bond having a penalty not exceeding the You must transfer to us all your rights of lesser of the: recovery against any person or organization for any loss you sustained and for which we have (a) Value of the securities at the close paid or settled. You must also do everything of business on the day the loss was necessary to secure those rights and do nothing discovered; or after loss to impair them. (b) Limit of Coverage. P. VALUATION- SETTLEMENT c. Loss from damages to property or premises, 1. Subject to the applicable Limit of Coverage- as described under SECTION I - provision, we will pay for: COVERAGE AGREEMENT, A., for not more than the: • LMCIT MPCB(11-99) Page 7 of 8 • (1) Actual cash value of the property on the Q. THE FOLLOWING APPLY TO SECTION I day the loss was discovered; - COVERAGE AGREEMENT, A. AND B.: (2) Cost of repairing the property or 1. Duties in the Event of Loss premises; or If you have reason to believe that any loss of, (3) Cost of replacing the property with or loss from damage to, money or securities property of like kind and quality. involves a violation of law, you must notify the police. We may, at our option, pay the actual cash value of the property or repair or replace it. R. THE FOLLOWING APPLY TO SECTION I - COVERAGE AGREEMENT, C.: If we cannot agree with you upon the actual cash value or the cost of repair or 1. Facsimile Signatures replacement, the value or cost will be determined by arbitration. We will treat mechanically reproduced facs imile signatures the same as handwritten g atu es 2. We may, at our option, pay for loss of, or loss signatures. from damage to, property other than money: 2. Proof of Loss (a) In the money of the country in which the loss occurred; or You must include with your proof of loss any instrument involved in that loss, or if not • (b) In the United States of America dollar possible, an affidavit setting forth the amount equivalent of the money of the country in and cause of loss. which the loss occurred determined by the rate of exchange on the day the loss was 3. Territory discovered. We will cover loss you sustain anywhere in the 3. Any property that we pay for or replace world. becomes our property. The Territory Condition does not apply to this coverage. 411 LMCIT MPCB(11-99) Page 8 of 8 • LMC League of Minnesota Cities Cities promoting excellence J MUNICIPAL BOND COVERAGE PART THREE • LMCIT MPCB(11-99) MUNICIPAL BOND COVERAGE PART THREE Various provisions in this covenant restrict The word LMCIT refers to League of Minnesota coverage. Read the entire covenant carefully to Cities Insurance Trust. The word you and your refer determine rights, duties and what is or is not to the city shown in the Declarations. The words covered, we, us, and our refer to the LMCIT providing this covenant. Throughout this covenant,the word city refers to the first city shown in the Declarations. SECTION I - COVERAGE AGREEMENT We will pay for loss as provided by each coverage all Bond Coverage Forms forming part of this form that is designated in the Declarations. covenant. Unless stated otherwise in any Bond Coverage Form, Other words and phrases that appear in italics have Declarations or endorsement, the following Causes special meaning, as given in SECTION IV - of Loss and Damages Not Covered, Limits of DEFINITIONS. Coverage, Definitions, and Conditions, apply to SECTION II - CAUSES OF LOSS AND DAMAGES NOT COVERED We will not pay for loss damages as specified below: 2. Payment of damages of any type for which you are legally liable. But, we will pay A. GOVERNMENTAL ACTION compensatory damages arising directly from a loss covered under this covenant. Loss resulting from seizure or destruction of property by order of governmental authority. 3. Payment of costs, fees or other expenses you incur in establishing either the existence or B. INDIRECT LOSS the amount of loss under this covenant. Loss that is an indirect result of any act or C. INVENTORY SHORTAGES occurrence covered by this covenant including, but not limited to, loss resulting from: Loss, or that part of any loss, the proof of which as to its existence or amount is dependent upon: 1. Your inability to_realize.income_that_you would have realized had there been no loss as a. An inventory computation; or provided by each Bond Coverage Form that is designated in the Declarations. b. A profit and loss computation. • LMCIT MPCB(11-99) Page 1 of 7 D. LEGAL EXPENSES 1. War, including undeclared or civil war; Expenses related to any legal action. 2. Warlike action by a military force, including action in hindering or defending against an E. NUCLEAR actual or expected attack, by any government, sovereign or other authority Loss resulting from nuclear reaction or using military personnel or other agents; or radiation,or radioactive contamination,however caused. 3. Insurrection, rebellion, revolution, usurped power, or action taken by governmental F. WAR authority in hindering or defending against any of these. Loss resulting from: SECTION III - LIMITS OF COVERAGE The most we will pay for loss in any one occurrence is the applicable Limit of Coverage shown in the Declarations. SECTION IV - DEFINITIONS A. Bond coverage form means the following bond 4. Municipal gas agency; • forms: 5. Hospital or nursing home board or 1. Bond-Employee Dishonesty Coverage Form commission; MPCB 203; and 6. Welfare or public relief agency; 2. Bond - Employee Faithful Performance Coverage Form MPCB 204. 7. School board; B. City means the governmental body or entity first 8. Airport commission; or named in the Declarations. For purposes of this coverage city includes relief associations. 9. Joint powers entity. Unless specifically named in the Declarations, city shall not include; C. Employee means: 1. Gas,electrical,or steam utilities commission; 1. A person whom you compensate directly by salary, wages or commissions and who you 2. Port authority, housing and redevelopment have the right to direct or control while authority, economic development authority, performing duties for you; area or municipal-redevelopment-authority, or similar agency; 2. Member of the city council; 3. Municipal power agency; 3. Member of a city board, commission, or committee which is not excluded by the • definition of city; LMCIT MPCB(11-99) Page 2 of 7 • 4. Elected or appointed official of the city; 4. To purchase or otherwise acquire and hold real or personal property; or 5. Volunteer person or organization while acting on behalf of the city and subject to the city's 5. To sue or be sued. direction and control; E. Money means: 6. Other authorized person or agent of the city while acting on behalf of the city, but 1. Currency, coins, and bank notes in current excludes independent contractors; use and having a face value; and 7. City relief association members,officers,and 2. Travelers checks,register checks and money employees; or orders held for sale to the public. 8. Any natural person employed by an F. Occurrence means all loss caused by an employment contractor while that person is employee, whether the result of a single act or subject to your direction and control and series of acts. performing services for you excluding, however, any such person while having care The date of the occurrence is the date on which and custody of property outside the premises. the single act is alleged to have taken place. If the loss or damages are alleged to have arisen But employee does not mean any agent, broker, from a series of acts, the date of occurrence is factor, commission merchant, consignee, deemed to be the date when the first such independent contractor or representative of the wrongful act took place or is alleged to have • same general character. taken place. D. Joint powers entity means an operating entity G. Property other than money and securities means created by two or more governmental units any tangible property that has intrinsic value. entering into an agreement as provided by statute for the joint exercise of governmental H. Securities means negotiable and nonnegotiable powers. An intergovernmental agreement will instruments or contracts representing either be deemed to create a joint powers entity if the money or other property and includes: agreement establishes a board with the effective power to do any of the following, regardless of 1. Tokens, tickets, revenue and other stamps whether the specific consent of the constituent (whether represented by actual stamps or governmental units may also be required: unused value in a meter) in current use; and 1. To receive and expend funds; 2. Evidences of debt issued in connection with credit or charge cards, which cards are not 2. To enter into contracts; issued by you; 3. To hire employees; but does not include money. • LMCIT MPCB(11-99) Page 3 of 7 SECTION V - CONDITIONS A. CANCELLATION AS TO ANY EMPLOYEE 2. You must: We reserve the right to cancel the covenant as to (a) Give us notice as soon as possible of any any employee: loss of the type insured under this covenant even though it falls entirely 1. Immediately upon discovery by you or any within the Deductible Amount. official or employee authorized to manage, govern or control your employee, of any act (b) Upon our request, give us a statement on the part of an employee whether before or describing the loss. after becoming employed by you which would constitute a loss covered under the D. DISCOVERY PERIOD FOR LOSS terms of this covenant. We will pay only for covered loss discovered no 2. On the date specified in a notice mailed to later than one year from the end of the covenant you. That date will be at least 30 days after period. the date of mailing. E. DUTIES IN THE EVENT OF LOSS The mailing of notice to you at the last mailing address known to us will be sufficient After you discover a loss or a situation that may proof of notice. Delivery of notice is the result in loss as provided by each Bond same as mailing. Coverage Form that is designated in the Declarations, you must: B. COVENANT PERIOD 1. Notify us as soon as possible. 1. The covenant period is shown in the Declarations. 2. Submit to examination under oath at our request and give us a signed statement of 2. Subject to the Loss Sustained During Prior your answers. Insurance condition, we will pay only for loss that you sustain through acts committed or 3. Give us a detailed, sworn proof of loss within events occurring during the covenant period. 120 days. C. DEDUCTIBLE 4. Cooperate with us in the investigation and settlement of any claim. 1. We will not pay for loss in any one occurrence unless the amount of loss exceeds F. INDEPENDENT RIGHT OF RECOVERY the Deductible Amount shown in the Declarations. We will then pay the amount We have an independent right of recovery of loss in excess of the Deductible Amount, against any employee for any loss due to the up to the Limit of Coverage. employee's malfeasance, willful neglect of duty or bad faith. • LMCIT MPCB(11-99) Page 4 of 7 G. LEGAL ACTION AGAINST US insurance except that the time within which to ' discover loss had expired, we will pay for it • You may not bring any legal action against us under this covenant provided: involving loss: (a) This covenant became effective at the 1. Unless you have complied with all the terms time of cancellation or termination of the of this covenant; and prior insurance and; 2. Until ninety (90) days after you have filed (b) The loss would have been covered by proof of loss with us; and this covenant had it been in effect when the acts or events causing the loss were 3. Unless brought within two(2)years from the committed or occurred. date you discover the loss. 2. The coverage under this Condition is part of, H. LOSS COVERED UNDER MORE THAN not in addition to, the Limits of Coverage ONE COVERAGE OF THIS COVENANT applying to this covenant and is limited to the lesser of the amount recoverable under: If two or more coverages of this covenant apply to the same loss, we will pay the lesser of: (a) This covenant as of its effective date; or 1. The actual amount of loss; or (b) The prior insurance had it remained in effect. 2. The sum of the limits of coverage applicable to that loss. K. NON-CUMULATION OF LIMIT OF COVERAGE • I. LOSS COVERED UNDER THIS COVENANT AND PRIOR COVENANT ISSUED Regardless of the number of years this covenant BY US remains in force or the number of premiums paid,no Limit of Coverage cumulates from year If any loss is covered: to year or period to period. 1. Partly by this covenant, and L. OTHER INSURANCE 2. Partly by the prior canceled or terminated This covenant does not apply to loss recoverable covenant that we had issued to you or any or recovered under other insurance or predecessor in interest, the most we will pay indemnity. However, if the limit of the other is the larger of the amount recoverable under insurance or indemnity is insufficient to cover this covenant or the prior covenant. the entire amount of the loss, this covenant will apply to that part of the loss, other than that J. LOSS SUSTAINED DURING PRIOR falling within any deductible amount, not INSURANCE recoverable or recovered under the other insurance or indemnity. However,this covenant 1. If you or any predecessor in interest sustained will not apply to the amount of loss that is more loss during the period of any prior insurance than the applicable Limit of Coverage shown in that you or the predecessor in interest could the Declarations. have recovered under that • LMCIT MPCB(11-99) Page 5 of 7 • M. RECORDS P. TRANSFER OF YOUR RIGHTS OF RECOVERY AGAINST OTHERS TO US You must keep records of all money, securities, and property other than money and securities; You must transfer to us all your rights of and provide any other reasonably obtainable recovery against any person or organization for information so we can verify the amount of any any loss you sustained and for which we have loss. paid or settled. You must also do everything necessary to secure those rights and do nothing N. RECOVERIES after loss to impair them. 1. Any recoveries, less the cost of obtaining Q. VALUATION- SETTLEMENT them, made after settlement of loss covered by this covenant, will be distributed as 1. Subject to the applicable Limit of Coverage follows: provision, we will pay for: (a) To you, until you are reimbursed for any (a) Loss of money but only up to and loss that you sustain that exceeds the including its face value. We may, at our Limit of Coverage and the Deductible option, pay for loss of money issued by Amount, if any; any country other than the United States of America: (b) Then to us until we are reimbursed for the settlement made; (1) At face value in the money issued by that country; or (c) Then to you until you are reimbursed for that part of the loss equal to the (2) In the United States of America dollar Deductible Amount, if any. equivalent determined by the rate of exchange on the day the loss was 2. Recoveries do not include any recovery: discovered. (a) From insurance,suretyship,reinsurance, (b) Loss of securities but only up to and security or indemnity taken for our including their value at the close of benefit; or business on the day the loss was discovered, we may, at our option: (b) Of original securities after duplicates of them have been issued. (1) Pay the value of such securities or replace them in kind, in which event O. TERRITORY you must assign to us all your rights, title and interest in and to those This covenant covers only acts committed or securities; events occurring within the United States of America, U.S. Virgin Islands, Puerto Rico, (2) Pay the cost of any Loss Securities Canal Zone, or Canada and while temporarily Bond required in connection with outside this territory for a period not more than issuing duplicates of the securities. 90 days. • LMCIT MPCB(11-99) Page 6 of 7 However, we will be liable only for We may, at our option, pay the actual cash • the payment of so much of the cost of value of the property or repair or replace it. the bond as would be charged for a bond having a penalty not exceeding If we cannot agree with you upon the actual the lesser of the: cash value or the cost of repair or replacement, the value or cost will be i) Value of the securities at the close determined by arbitration. of business on the day the loss was discovered; or 2. We may, at our option, pay for loss of, or loss from damage to, property other than ii) Limit of Coverage. money: (c) Loss of, or loss from damage to,properly (a) In the money of the country in which the other than money and securities, or loss loss occurred; or from damage to the premises for not more than the: (b) In the United States of America dollar equivalent of the money of the country in (1) Actual cash value of the property on which the loss occurred determined by the day the loss was discovered; the rate of exchange on the day the loss was discovered. (2) Cost of repairing the property or premises; or 3. Any property that we pay for or replace becomes our property. (3) Cost of replacing the property with • property of like kind and quality. • LMCIT MPCB(11-99) Page 7 of 7 LEAGUE OF MINNESOTA CITIES INSURANCE TRUST SCHEDULE OF COVERED LMC venant#: C M C 20796 L..oY.of Minnesota ct.,sr ass,promot wo excell ncv CITY : OAK PARK HEIGHTS COVERAGE AT EACH OF THE BELOW LOCATIONS APPLIES ONLY FOR BUILDING/CONTENTS OR PROPERTY IN THE OPEN DESCRIBED AND FOR THE *SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGES INDICATED. **Type of ; ***Section IV-Water I ; Covered and Supplemental Loc# Location Occupancy I prey Flood Coverage j 1 i 14168 OAK PARK BLVD. i CITY HALL/GARAGE j B ; Code C I1 2 j 58TH&NORELL j WATER TOWER&WELL j B ; Code C 1 I 3 j 14168 57TH STREET N j WATER TOWER&WELL j B ; Code C I 1 1 1 1 1 j 4 j BREKKE PARK j SHELTER j B ; Code C 1 1 1 1 1 1 5 13425 60TH STREET I LIFT STATION B ; Code C I L I i 1 1 L 1 6 j 14168 57TH STREET N j PUMP HOUSE#3 B j Code C / 7 i SWAGER PARK i SHELTER j B j Code C I i i i i 1 1 1 1 L 1 i COVER PARK i RECREATION BUILDING i B i Code C 9 VALLEY VIEW PARK SHELTER j B ; Code C I1 1 1 1 1 j 10 j BEADETTE ON LOOKOUT TRAIL j LIFT STATION j B ; Code C I1 1 1 1 1 11 i SUNYSIDE MARINA i LIFT STATION i B ; Code C I 12 i 14200 53RD STREET i LIFT STATION i B ; Code C I1 1 1 1 I j 13 j 14168 57TH STREET N j CITY HALL ; P I O ; Code C I1 1 1 1 1 1 14 i SWAGER PARK I PARK ; P I O ; Code C 1 1 I 1 1 1 15 i COVER PARK i PARK ; P I O ; Code C I1 1 1 1 1 1 16 j VALLEY VIEW PARK j PARK ; P I O ; Code C 1 17 i BREKKE PARK PARK ; P I O ; Code C J 1 1 1 1 *The limit of coverage for Section IV-Water and Supplemental Coverage is$500,000 per occurrence/500,000 Annual Aggregate **B = Building / Contents **PIO = Property in the Open de A:LMCIT Water and Supplemental Flood Coverage applies with no additional exclusions. *** de 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 11/97) LEAGUE OF MINNESOTA CITIES INSURANCE TRUST SCHEDULE OF COVERED PROPERTY ( Ovenant#: C M C 20796 Lagg..a el Minnesota Cities Cities pronsoti.9 oa+arMrar J CITY : OAK PARK HEIGHTS COVERAGE AT EACH OF THE BELOW LOCATIONS APPLIES ONLY FOR BUILDING/CONTENTS OR PROPERTY IN THE OPEN DESCRIBED AND FOR THE *SECTION IV - WATER AND SUPPLEMENTAL FLOOD COVERAGES INDICATED. **Type of ; ***Section IV-Water i i ; ; Covered ; and Supplemental Loch Location Occulgtpcv I Ptopei y Flood Coverage j 18 j CITY WIDE j VARIOUS ; P I O ; Code C 1 I i I I III *The limit of coverage for Section IV-Water and Supplemental Coverage is$500,000 per occurrence/500,000 Annual Aggregate **B = Building / Contents **PIO = Property in the Open i-de A:LMCIT Water and Supplemental Flood Coverage applies with no additional exclusions. e 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 11/97) LEAGUE OF MINNESOTA CITIES INSURANCE TRUST SCHEDULE OF COVERED MOBILE PROPERTY 111C League of Minnesota Cities • Covenant#: CMC 20796 Cities promoting excellence CITY: OAK PARK HEIGHTS, CITY OF 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 CO VERED A. MOBILE PROPERTY VALUED AT $25,000 OR LESS COVERED B. MOBILE PROPERTY VALUED AT GREATER THAN $25,000 Description of Mobile Property Serial No. (Make, Model and Year) . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 • 15 PM-109(11/97) PROPERTY IN THE OPEN ENDORSEMENT This Endorsement modifies coverage provided under the Municipal Property and Crime Coverage. • Loc. # I Location I Occupan cy I Property in the Open 18 CITY WIDE VARIOUS OUTDOOR SIRENS • A. Section VI-Definitions property in the open is amended to read as described above for each location. All other terms and conditions remain unchanged. • PM-110(11/97) Covenant Number: MUNICIPAL LIABILITY DECLARATIONS CMC 207% Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST (Herein called LMCIT) of Mn wuol'a Citiar • i. CITY: OAK PARK HEIGHTS C,b" w4cs ATTN: THOMAS MELENA Item 2. COVERAGE PERIOD: One Year From: 07/07/00 To: 07/07/01 12:01 A.M. Standard Time at Mailing Address Indicated on Common Coverage Declarations Item 3. THE COVERED PARTY IS: CITY "CLA1MS•MADEIt Item 4. COVERAGE: 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 ANNUAL AGGREGATE LIMIT $ 1,000,000 FAILURE TO SUPPLY ANNUAL AGGREGATE LIMIT $ 1,000,000 EMF ANNUAL AGGREGATE LIMIT $ 1,500,000 FIRE DAMAGE LIMIT $ 50,000 • MEDICAL EXPENSE LIMIT $ 1,000/$10,000 Occurrence/Aggregate LIMITED POLLUTION LIABILITY *$ 1,000,000 Per"Sudden Occurrence"/ $1,000,000 Annual Aggregate LEAD OR ASBESTOS CLAIM LIMIT *$ 200,000 Per Claim/$200,000 Annual Aggregate LAND USE,DEVELOPMENT OR *$ 1,000,000 Annual Aggregate FRANCHISE LITIGATION YEAR 2000 CLAIM *$ 25,000 Per Claim/$25,000 Annual Aggregate *Limit includes loss, loss adjustment expense, and legal defense costs Item 5. 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: CMC(11-99) ME066(11-99) ME073(11-97) MGL-1(01-95) • LMCIT DEC-013(11/86)(Rev.11/99) COMPREHENSIVE MUNICIPAL COVERAGE Various provisions in this covenant restrict The words "city" and "covered party" are defined coverage. Read the entire coverage agreement under SECTION II - WHO IS COVERED. carefully to determine rights, duties and what is and is not covered. Throughout this covenant the Other words and phrases that appear in italics word "city" refers to the first "city" shown in the have special meaning, as given in SECTION IV Declarations. The word LMCIT refers to the - DEFINITIONS. League of Minnesota Cities Insurance Trust. 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 1. COVERAGE AGREEMENT occurrence shall be deemed to be as follows: a. Except as otherwise provided in this (1) For claims for bodily injury or property agreement, LMCIT will pay on behalf of the damage, the date of the occurrence is the "covered party" all sums which the "covered date on which the bodily injury or property party" shall become legally obligated to pay as damage first took place or is alleged to damages as a result of an occurrence, if the have taken place. following conditions are met: (2) For any other claim for damages, the (1) The claim for such damages must be date of the occurrence is the date on which first made against the "covered party" the wrongful act giving rise to the claim for during the coverage period; and damages took place or is alleged to have taken place. If the damages are alleged to (2) The date of the occurrence giving rise have arisen from a series of wrongful acts, to the claim for damages must be on or the date of the occurrence is deemed to be after the retroactive date, if any, shown in the date when the first such wrongful act the Declarations; and took place or is alleged to have taken place. (3) The occurrence must have taken place If both(1) and(2) apply to claims for damages in the coverage territory. arising from a single occurrence, the date of the occurrence is the earlier of the dates b. LMCIT will have the right and duty to defined by (1) and (2), respectively. defend any such claim or suit seeking damages. LMCIT may, at its discretion, b. For any claim for damages, the date the investigate any actual or potential claim; and claim is made is deemed to be as follows: unless the "city" has given notice as provided in Section VI, 7, below, LMCIT may settle (1) For any employment liability claim,the any claim or suit. claim is deemed to have been made on the earliest of: c. The amount LMCIT will pay for damages is • limited as described in SECTION III-LIMITS OF COVERAGE. (a) The date the claimant files a charge with the Federal Equal Employment LMCIT CMC(11-86)(Rev.11-99) Page 1 of 21 Opportunity Commission, the brother or sister of that employee as a Commissioner of the Minnesota consequence of(1) above. Department of Human Rights, or a local • human rights commission as defined in This exclusion applies: Minn. Stat. §363.01, subd. 23, whichever comes first; or (1) Whether the "city" may be liable as an employer or in any other capacity; and (b) The date when notice of claim for damages is received by any "covered (2) To any obligation to share damages party" or by LMCIT, whichever comes with or repay someone else who must pay first. damages because of the injury. (2) For any other claim for damages, the This exclusion does not apply to liability claim is deemed to have been made when assumed by the "covered party" under a notice of such claim is received and recorded covered contract. by any "covered party" or by LMCIT, whichever comes first. d. Any loss, cost, or expense arising out of any direction demand, or request by the (3) All claims for damages arising from a government or any other entity that the "city" single occurrence will be deemed to have or any other entity test for, monitor, clean up, been made at the time the first of those remove, contain, treat, detoxify or neutralize claims is made against any "covered party". pollutants; or 3. EXCLUSIONS Damages arising out of the actual, alleged or threatened discharge, dispersal, seepage, This coverage does not apply to: migration, release or escape of pollutants: • a. Damages for which the "covered party" is (1) At or from premises the "city" owns, liable by reason of the assumption of liability rents, leases, uses, or occupies, and in a contract or agreement. This exclusion does premises the "city" no longer owns, rents, not apply to liability for damages: leases, uses, or occupies; (1) Assumed in a contract or agreement that (2) At or from any landfill, dump, or other is a covered contract; or site or location presently or formerly used by or for the "city" or others for the (2) The "covered party" would have in the handling, storage, disposal, processing or absence of the contract or agreement. treatment of pollutants; b. Damages for which the "covered party" (3) Which are or were at any time may be liable by reason of the Minnesota Civil transported, handled, stored, treated, Damages Act (M.S. 340A.801-340A.802), or disposed of, or processed as waste by or for any other law governing liability for illegal the "city" or any person or organization for sales of alcoholic beverages. whom the "city" may be legally responsible; or C. Bodily injury to: (4) At or from any site or location on (1) An employee of the "city" arising out which the "city" or any contractors or of and in the course of employment by the subcontractors working directly or "city"; or indirectly on the "city's" behalf are or have been performing operations: • (2) Damages to the spouse, child, parent, LMCIT CMC(11-86)(Rev.11-99) Page 2 of 21 (a) If the pollutants are brought on or (a) Less than 26 feet long; and to the site or location in connection with such operations; or (b) Not being used to carry persons or property for a charge; (b) If the operations are to test for, monitor, clean up, remove, contain, (3) Parking an auto on, or on the ways next treat, detoxify or neutralize the to, premises the "city" owns or rents, pollutants. provided the auto is not owned by or rented or loaned to the "covered party". This exclusion does not apply to any of the following: f. Damages due to war, whether or not declared, or any act or condition incident to (1) Any Limited Pollution Liability Claim. war. War includes civil war, insurrection, rebellion or revolution. (2) Any claim arising out of the discharge or dispersal of mace, tear gas or similar g. Property damage to: agent, if such discharge was for the purpose of protecting persons or property or (1) Property the "city" owns, rents, or incident to an arrest. occupies; (3) Any lead or asbestos claim, unless the (2) Premises the "city" sells, gives away or actual, alleged, or threatened discharge, abandons, if the property damage arises out dispersal, release, escape,use, distribution, of any part of those premises; or handling of lead or asbestos took place at or from any landfill, dump, or other site or (3) That particular part of real property on • location presently or formerly used by or which the "city" or any contractors or for the "city" or others for the handling, subcontractors working directly or storage,disposal,processing or treatment of indirectly on the "city's" behalf are pollutants. performing operations, if the property damage arises out of those operations; or (4) Any damages arising out of heat, smoke, or fumes from a hostile fire. A (4) Work performed by or on behalf of the hostile fire is a fire which becomes "city" arising out of your work or any uncontrollable or breaks out from where it portion thereof, or out of materials, parts was intended to be. or equipment furnished in connection therewith; e. Damages arising out of the ownership, maintenance, use or entrustment to others of (5) Your product arising out of it or any any aircraft, auto or watercraft owned or part of it. operated by or rented or loaned to any "covered party". Use includes operation and Paragraphs (3) and (4) of this exclusion do loading or unloading. not apply to liability assumed under a sidetrack agreement. This exclusion does not apply to: This exclusion does not apply to property (1) A watercraft while ashore on premises damage by fire to premises rented to the the "city" owns or rents; "city". A separate limit of coverage applies to this coverage as described in SECTION (2) A watercraft that is: III - LIMITS OF COVERAGE. • LMCIT CMC(11-86)(Rev.11-99) Page 3 of 21 h. Damages claimed for any loss, cost or (3) Doctor of Medicine. expense incurred by the "city" or others for the loss of use, withdrawal, recall, inspection, (4) Dentist. • repair, replacement, adjustment, removal or disposal of: (5) Nurse except that this exclusion shall not apply to: (1) Your product; (a) Claims arising from the nurse's (2) Your work; or activities in the capacity of an emergency medical technician or first (3) Impaired property; responder; or if such product, work, or property is (b) Claims arising from the nurse's withdrawn or recalled from the market or from activities in administering vaccinations use by any person or organization because of or immunizations to "city" employees a known or suspected defect, deficiency, or volunteers. inadequacy or dangerous condition in it. (6) Pharmacist. i. Bodily injury to any volunteer while acting on behalf of the "city" if the volunteer is an m. Damages arising out of the failure or employee within the meaning of a Workers bursting of any: Compensation law or similar law, or is covered under a voluntary endorsement to a (1) Class I or Class II dam as classified by Workers Compensation insurance policy. the Commissioner of the Department of Natural Resources pursuant to Minnesota j. Damages for bodily injury, property Rules Section 6115.0340; or damage or personal injury arising out of the • "city's" ownership, operation or maintenance (2) Any dike, levee or similar structure. of any airport. n. Damages arising out of the "city's" k. Damages for bodily injury, property ownership, sponsorship or operation of: damage or personal injury arising out of the "city's" ownership, operation or maintenance (1) Motorized amusement devices if the of any hospital, nursing home or medical power supply motor is rated at greater than clinic. 5 horsepower; 1. Damages arising out of the rendering of or (2) Any mobile equipment, automobile, failure to render professional services by any snowmobile or motorcycle in any racing, professional listed below: pulling, pushing, speed, or demolition contest or in any stunting activity; (1) Attorney, unless the attorney is an employee of the "city" and not an (3) Rodeos; or independent contractor,and the professional services are within the scope of the (4) Fireworks displays or exhibitions. attorney's duties as a "city" employee, including professional services performed o. Damages arising from or relating to the for any of the "city's"boards,commissions, detention or confinement of any person(s) in authorities or agencies, or joint powers any jail, holding cell or similar detention entities in which the "city" participates. facility, which the "city" owns, operates or • maintains, if the date of the occurrence (2) Architect. causing LMCIT CMC(11-86)(Rev.11-99) Page 4 of 21 such damages takes place after a continuous u. Any claim for damages asserted in any land detention or confinement period of 30 days, or use, development or franchise litigation. • in any detention facility which is intended and regularly used for confinement of persons for COVERAGE B. MEDICAL AND periods in excess of 30 days; RELATED PAYMENTS p. Damages arising out of the activities of any 1. COVERAGE AGREEMENT of the following "city" boards, commissions, or agencies: LMCIT will pay to or for each person who sustains bodily injury caused by accident all (1) Gas, electrical or steam utilities reasonable medical and related expense commission; incurred within one year from the date of the accident as a result of such bodily injury, (2) Port authority, housing and provided such bodily injury arises out of a redevelopment authority, economic condition in the covered premises. development authority, area or municipal redevelopment authority, or similar agency; 2. EXCLUSIONS (3) Municipal power agency; or LMCIT will not pay expenses for bodily injury: (4) Municipal gas agency, a. Arising out of the operation or use of any unless such board, commission, authority, or snowmobile or trailer designed for use agency is named in the Declarations, in which therewith; case the "city" will also be covered to the extent of coverage provided under this b. Included within the completed operations covenant to the named board, commission, hazard or the products hazards; authority or agency for damages arising out of the activities of the respective named board, c. Arising out of operations performed for commission, authority or agency. the "city" by an independent contractor other than: q. Damages arising out of the activities of a joint powers entity in which the "city" is a (1) Maintenance and repair of the covered member unless the joint powers entity is named premises; or in the Declarations. (2) Structural alterations at such premises r. Damages arising out of condemnation, which do not involve changing the size of inverse condemnation, adverse possession, or or moving buildings or other structures; dedication by adverse use. This exclusion does not apply to any claim for taking of property d. To any tenant or other person regularly wherein the taking of property is incident to an residing on the covered premises; 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 s. Any criminal proceedings or proceedings rented from the "city"; under the open meeting law against any "covered party". f. To any person while engaged in maintenance and repair of the covered • t. Damages with respect to any claim(s) made premises or alteration, demolition or new by LMCIT or the "city" against any other construction at such P remises; "covered party". LMCIT CMC(11-86)(Rev.11-99) Page 5 of 21 g. To any person practicing, instructing or The injured person shall submit to physical participating in any physical training, sport, examination by physicians selected by LMCIT athletic activity or contest whether on a when and as often as LMCIT may reasonably formal or informal basis; require. LMCIT may pay the injured person or any person or organization rendering the h. To a member or guest of any club, tourist services, and the payment shall reduce the court or trailer park operated or owned by the amount payable hereunder for such injury. "city"; Payment hereunder shall not constitute an admission of liability of any "covered party" i. For any injury for which the injured party or of LMCIT. has received or is entitled to receive workers' compensation benefits. COVERAGE C. AUTOMOBILE LIABILITY - BODILY INJURY AND The exclusions of the Municipal Liability PROPERTY DAMAGE Coverage Part(Coverage A) also apply to this Coverage Part as respects bodily injury. 1. COVERAGE AGREEMENT 3. ADDITIONAL DEFINITIONS LMCIT will pay on behalf of the "covered party" all sums which the "covered party" When used herein: shall become legally obligated to pay as damages because of bodily injury or property Covered premises means all premises owned or damage to which this coverage applies, caused rented to the "city" with respect to which the by an occurrence and arising out of the "city" is afforded coverage for bodily injury ownership, maintenance or use, including liability under this covenant, and includes the loading or unloading, of any automobile. This ways immediately adjoining on land; however, coverage applies only to bodily injury or covered premises does not include streets, property damage which occurs during the sidewalks, or boulevards that do not abut a coverage period and within the covered "city"-owned building or "city"-owned parking territory. lot. LMCIT will have the right and duty to defend Medical and related expense means expenses any suit seeking those damages. However: for necessary medical, surgical, x-ray and dental services, including prosthetic devices, a. The amount LMCIT will pay for damages necessary ambulance, hospital, professional is limited as described in SECTION III - nursing and funeral services, and replacement LIMITS OF COVERAGE. or repair of damaged eye glasses or clothing. b. LMCIT may, at its discretion, investigate 4. ADDITIONAL CONDITION MEDICAL y' l g any occurrence and settle any claim or suit REPORTS; PROOF AND PAYMENT OF that may result. CLAIM. 2. EXCLUSIONS As soon as practicable, the injured person or someone on his behalf shall give to LMCIT This coverage does not apply to: written proof of claim, under oath if required, and shall, after each request from LMCIT, a. Any obligation for which the "covered execute authorization to enable LMCIT to party" or any carrier as his insurer may be obtain medical reports and copies of records. held liable under any workers' compensation, unemployment compensation or disability benefits law, or under any similar law; LMCIT CMC(11-86)(Rev.11-99) Page 6 of 21 b. Any liability the "city" may have for bodily d. Bodily injury due to war, whether or not injury to: declared, civil war, insurrection, rebellion or • revolution or to any act or condition incident (1) An employee of the "city" arising out to any of the foregoing; of and in the course of employment by the "city"; or e. Any loss, cost, or expense arising out of any direction, demand, or request by the (2) Damages to the spouse, child, parent, government or any other entity that the "city" brother or sister of that employee as a or any other entity test for, monitor, clean up, consequence of(1) above. remove, contain, treat, detoxify or neutralize pollutants; or This exclusion applies: Damages arising out of the actual, alleged or (1) Whether the "city" may be liable as an threatened discharge, dispersal, seepage, employer or in any other capacity; and migration, release or escape of pollutants: (2) To any obligation to share damages (1) At or from premises the "city" owns, with or repay someone else who must pay rents, leases, uses, or occupies, and damages because of the injury. premises the "city" no longer owns, rents, leases, uses, or occupies; This exclusion does not apply to liability assumed by the "covered party" under a (2) At or from any landfill,dump, or other covered contract. site or location presently or formerly used by or for the "city" or others for the c. Property damage: handling, storage, disposal, processing or • treatment of pollutants; (1) To property owned or being transported by the "covered party"; or (3) Which are or were at any time transported, handled, stored, treated, (2) To property rented to or in the care, disposed of, or processed as waste by or custody or control of the "covered party", for the "city" or any person or or as to which the "covered party" is for organization for whom the "city" may be any purpose exercising physical control, legally responsible; or other than: (4) At or from any site or location on (a) Property damage to a residence or which the "city" or any contractors or private garage by a private passenger subcontractors working directly or automobile covered by this covenant; or indirectly on the "city's" behalf are or have been performing operations; (b) Property damage to an automobile that is rented by the covered party on a (a) If the pollutants are brought on or weekly or daily basis and is used for to the site or location in connection "city" business. with such operations; or (c) Personal property of others which (b) If the operations are to test for, comes into the care, custody, and monitor, clean up, remove, contain, control of police, fire, or emergency treat, detoxify or neutralize the medical services personnel in the course pollutants. of performing public safety services. • LMCIT CMC(11-86)(Rev.11-99) Page 7 of 21 This exclusion does not apply to any of the Non-owned automobile means an automobile following: which is neither an owned automobile nor a - hired automobile. (1) Any Limited Pollution Liability Claim. Owned automobile means an automobile (2) Any claim arising out of the discharge owned by the "city". or dispersal of mace, tear gas .or similar agent, if such discharge was for the purpose Private passenger automobile means a four of protecting persons or property or wheel private passenger or station wagon type incident to an arrest. automobile. (3) Any lead or asbestos claim unless the Trailer includes semi-trailer but does not actual, alleged, or threatened discharge, include mobile equipment. dispersal,release, escape,use, distribution, or handling of lead or asbestos took place at COVERAGE D. LAND USE, or from any landfill, dump, or other site or DEVELOPMENT OR FRANCHISE location presently or formerly used by or LITIGATION for the "city" or others for the handling, storage,disposal,processing or treatment of 1. COVERAGE AGREEMENT pollutants. For any land use, development or franchise (4) Any damages arising out of heat, litigation which is first filed or served against smoke, or fumes from a hostile fire. A the "city" or a "city" officer or employee hostile fire is a fire which becomes during the annual coverage period of this uncontrollable or breaks out from where it agreement, LMCIT will pay the following on was intended to be. the "city's" behalf: • f. Liability assumed under any contract or a. 100% of the first $50,000 of defense costs agreement, but this exclusion does not apply to which are incurred after the litigation has been liability assumed under a covered contract. reported to LMCIT; 85% of the next$200,000 of defense costs incurred after the litigation 3. ADDITIONAL DEFINITIONS has been reported to LMCIT; and 60% of any defense costs in excess of$250,000 which are These additional definitions apply for purposes incurred after the litigation has been reported of Coverage C: to LMCIT; and Automobile business means the business or b. 50% of any defense costs which the "city" occupation of selling, repairing, servicing, incurs prior to reporting the litigation to storing or parking automobiles; LMCIT; and Hired automobile means an automobile not c. 85% of any damages which the "city" shall owned by the "city" which is used under be required to pay. contract on behalf of, or loaned to, the "city", provided such automobile is not owned by (a) The amount LMCIT will pay for damages and a partner or executive officer of the "city", or defense costs for land use, development or (b) an employee or agent of the "city" who is franchise litigation covered under this section granted an operating allowance of any sort for is limited as described in SECTION III - the use of such automobile. LIMITS OF COVERAGE. • LMCIT CMC(11-86)(Rev.11-99) Page 8 of 21 The amount LMCIT pays for damages or mutual agreement of the "city" and LMCIT. defense costs for land use, development or franchise litigation is subject to the Municipal If LMCIT and the "city" are not able to agree Liability Deductible shown in the Municipal on selection of counsel, LMCIT will provide Liability Declarations or the General Annual a list of five defense attorneys experienced in Aggregate Deductible if any shown in the land use, development or franchise litigation Common Coverage Declarations. matters; and the "city" will select defense counsel from that list. 2. LITIGATION MANAGEMENT A land use, development or franchise For any land use, development or franchise litigation suit may not be settled without the litigation, defense counsel will be selected by approval of both LMCIT and the "city". SECTION II - WHO IS COVERED 1. "City" means the "city" or other governmental definition of "city"; body or entity first named in the Declarations. Unless specifically named in the Declarations, (3) Elected or appointed official of the "city" shall not include any of the following: "city"; a. Gas, electrical or steam utilities (4) Employee of the "city"; commission; (5) Volunteer person or organization while b. Port authority, housing and redevelopment acting on behalf of the "city" and subject to authority, economic development authority, the "city's" direction and control; • area or municipal redevelopment authority or similar agency; (6) Other authorized person or agent of the "city" while acting on behalf of the "city", c. Municipal power agency; but excluding independent contractors; d. Municipal gas agency; (7) "City" relief association and its members, officers, and employees. e. Welfare or public relief agency; (8) Person while acting in the f. School board; or administrative capacity of medical director or medical advisor to the "city" ambulance g. Joint powers entity. service. 2. For purposes of Coverage A, "covered party" c. With respect to a joint powers entity named means: in the Declarations: a. The "city", and any other entity named in (1) The joint powers entity; the Declarations; (2) While acting on behalf of the joint b. For actions within his duties as such, any powers entity, or with respect to liability present or former: arising out of the activities of the joint powers entity, any present or former: (1) Member of the "city" council; (a) Governmental member of the joint (2) Member of a "city" board, commission, powers entity; or committee which is not excluded by the LMCIT CMC(11-86)(Rev.11-99) Page 9 of 21 (b) Elected or appointed official of the d. A present or former firefighter with respect ( ) PP P governmental member; to any automobile while such automobile is or ' was being used in the performance of his • (c) Employee of the governmental official duties. member; e. Any other person or organization but only (d) Other authorized person or agent of with respect to his or its liability because of the governmental member, but acts or omissions of a "covered party" under excluding independent contractors. a., b. or c. above. 3. For purposes of Coverage C, "covered party" For purposes of Coverage C, none of the means: following is a "covered party": a. The "city", and any other entity named in a. An elected or appointed official or the Declarations; employee of the "city" with respect to an automobile owned by a member of his b. Any present or former elected or appointed household unless such automobile is official or employee of the "city" with respect specifically described in this covenant; to a non-owned automobile only while such automobile is or was being used in the b. Any person or organization, other than the business of the "city"; "city", with respect to: c. Any other person while using an owned (1) A motor vehicle while used with any automobile or a hired automobile with the trailer owned or hired by such person or permission of the "city", provided his actual organization and not covered by LMCIT operation or (if he is not operating) his other (except a trailer designed for use with a actual use thereof is within the scope of such private passenger automobile and not being permission,but with respect to bodily injury or used for business purposes with another property damage arising out of the loading or type of motor vehicle); or unloading thereof, such other person shall be a "covered party" only if he is or was: (2) A trailer while used with any motor vehicle owned or hired by such person or (1) A lessee or borrower of the automobile; organization and not covered by LMCIT. or c. Any person while employed in or otherwise (2) An employee of the "city" or of such engaged in duties in connection with an lessee or borrower; automobile business, other than an automobile business operated by the "city". SECTION III - LIMITS OF COVERAGE 1. The limits of coverage shown in the c. Persons or organizations making claims or Declarations and the rules below fix the most bringing suits. LMCIT will pay as damages under each coverage part regardless of the number of: 2. LMCIT's maximum limit of liability for Coverages A and C combined shall be the per a. "Covered Parties"; occurrence or sudden occurrence limit shown in the Declarations whether the claim or claims fall b. Claims made or suits brought; or under Coverage A, Coverage C, or both. • LMCIT CMC(11-86)(Rev.11-99) Page 10 of 21 3. The Products-Completed Operations Annual of the number of suits, defendants, or claimants. • Aggregate Limit is the most LMCIT will pay under Coverage A for damages included in the 11. For any year 2000 claim, the following limits products-completed operations hazard. apply regardless of any other cause or event that contributes concurrently or in any sequence to the 4. The Fire Damage Limit is the most LMCIT damages, costs or expenses: will pay under Coverage A for damages because of property damage to premises rented to the a. The liability of LMCIT for any year 2000 "city" arising out of any one fire. claim shall be limited to 85% of the incurred damages, defense costs, and loss adjustment 5. The Medical Expense Limit is the most LMCIT expenses. will pay under Coverage B for all medical expenses because of bodily injury sustained by any b. The amount LMCIT will pay for damages, one person, and the occurrence aggregate limit is defense costs, and loss adjustment expenses the most LMCIT will pay under Coverage B for for year 2000 claims shall not exceed all medical expenses because of bodily injury to $25,000 regardless of the number of claims, two or more persons resulting from one claimants, or occurrences. occurrence. c. The amount LMCIT pays for damages, 6. The Limited Pollution Liability Annual defense costs, or loss adjustment expenses Aggregate Limit is the most LMCIT will pay for for year 2000 claims is subject to the limited pollution liability claims during the annual Municipal Liability Deductible shown in the coverage period. The Limited Pollution Liability Municipal Liability Declarations or the Annual Aggregate limit applies to the sum of General Annual Aggregate Deductible, if damages and loss adjustment expense, including any, shown in the Common Coverage defense costs. Declarations. 7. The Lead or Asbestos Claim Annual Aggregate 12. LMCIT shall not be obligated under this Limit is the most LMCIT will pay for lead or covenant to pay any claim or judgment or to asbestos claims during the annual coverage defend any suit after the applicable limit of period. The Lead or Asbestos Claim Annual LMCIT's liability under Coverages A or C has Aggregate Limit applies to the sum of damages been exhausted by payment of judgments or and loss adjustment expense, including defense settlements or by tender to any excess carrier or costs. excess coverage including excess coverage provided by LMCIT. 8. The Failure to Supply Annual Aggregate Limit is the most LMCIT will pay for damages for 13. For any Annual Aggregate Limit shown in failure to supply claims during the annual the Declarations, the limit shall apply separately coverage period. to each consecutive annual period and to any 9. The EMF Annual Aggregate Limit is the most remaining period of less than 12 months, starting LMCIT will pay for damages for EMF claims with the beginning of the coverage period shown during the annual coverage period. in the Declarations, unless the coverage period is extended after issuance for an additional period of 10. LMCIT's total liability for defense costs and less than 12 months. In that case, the additional damages for all land use, development or period will be deemed part of the last preceding franchise litigation which is first filed or served period for purposes of determining the limits of against the "city" during the annual coverage coverage. period of this agreement shall not exceed • $1,000,000, regardless LMCIT CMC(11-86)(Rev.11-99) Page 11 of 21 SECTION IV - DEFINITIONS • 1. Advertisement means a notice that is broadcast An indemnification of a municipality as or published to the general public or specific required by ordinance, or that part of any market segments about your goods, products or contract or agreement pertaining to the "city's" services for the purpose of attracting customers or business under which the "city" assumes the supporters. tort liability of another to pay damages to a third person or organization, if the contract or 2. Automobile(Auto)means a land motor vehicle, agreement is made prior to the date of the trailer or semi-trailer designed for travel on public occurrence giving rise to the damages. Tort roads, including any attached machinery or liability means a liability that would be equipment. But automobile does not include imposed by law in the absence of any contract mobile equipment. or agreement. 3. Bodily injury means bodily injury, sickness or Covered contract does not include that part of disease sustained by a person, including death any contract or agreement: resulting from any of these at any time. a. That indemnifies an architect, engineer or 4. Coverage territory means: surveyor for injury or damage arising out of: a. The United States of America (including its (1) Preparing, approving or failing to territories and possessions), Puerto Rico and prepare or approve maps, drawings, Canada; opinions, reports, surveys, change orders, designs or specifications; or b. International waters or airspace, provided • the injury or damage does not occur in the (2) Giving directions or instructions, or course of travel or transportation to or from failing to give the same, if that is the any place not included in a. above; or primary cause of the injury or damages; c. All parts of the world if: b. Under which the "city's" architect, engineer or surveyor, assumes liability for injury or (1) The injury or damage arises out of: damages arising out of the "city's" rendering or failing to render professional services, (a) Goods or products made or sold by including those listed in a. above and the "city" in the territory described in a. supervisory, inspection or engineering above; or services; or (b) The activities of a person whose c. That indemnifies any person or organization home is in the territory described in a. for damages by fire to premises rented or above, but is away for a short time on loaned to the "city". the "city's" business; and 6. Damages means money damages, and includes (2) The "covered party's" responsibility to awards for attorneys' fees with respect to federal pay damages is determined in a suit on the civil rights suits and state human rights suits. merits, in the territory described in a. above With respect to any land use, development or or in a settlement LMCIT agrees to. franchise litigation, damages also includes amounts the "city" is obligated to pay for loss of 5. Covered contract means: use of property during the time prior to a final • determination by the court that enforcement of a LMCIT CMC(11-86)(Rev.11-99) Page 12 of 21 land use, zoning, subdivision, or similar such wages and employment benefits for work that • ordinance or regulation constitutes a taking of is hereafter performed by the employee making private property. the claim. Damages does not include any of the following: 7. EMF claim means any claim for damages arising out of the actual or alleged exposure to a. Any obligation of a "covered party"under a electromagnetic fields, electromagnetic radiation workers' compensation, disability benefits, or or stray voltage. unemployment compensation law or any similar law. 8. Failure to supply claim means any claim for damages arising out of the complete or partial b. Exemplary damages or punitive damages failure to supply water, electricity, gas or steam. except punitive damages claimed or levied against an officer, employee or volunteer of the 9. Impaired property means tangible property, "city", provided that the officer, employee or other than your product or your work, that cannot volunteer: be used or is less useful because: (1) Was acting in the performance of the a. It incorporates your product or your work duties of the position; and that is known or thought to be defective, deficient, inadequate or dangerous; or (2) Was not guilty of malfeasance in office, willful neglect of duty, or bad faith. b. The "city" has failed to fulfill the terms of a contract or agreement; c. Fines or penalties imposed by law. If such property can be restored to use by: • d. Injunctive or equitable relief, or quasi-judicial or administrative orders. (1) The repair, replacement, adjustment or removal of your product or your work; or e. Repayment of any tax, assessment, fee, or other charge that was wrongfully obtained, or (2) The "city's" fulfilling the terms of the any interest on, or any other amount claimed contract or agreement. for loss of use of, such tax, assessment, fee, or other charge. 10. Joint powers entity means an operating entity created by two or more governmental units f. Amounts paid or payable for the purchase or entering into an agreement as provided by statute permanent acquisition of property or property for the joint exercise of governmental powers. An rights, or for the right to permanently enforce intergovernmental agreement will be deemed to an ordinance, regulation, or restriction on the create a joint powers entity if the agreement use of property. establishes a board with the effective power to do any of the following, regardless of whether the g. Amounts due under the terms of any specific consent of the constituent governmental contractual obligation, except for liability: units may also be required: (1) Assumed in a covered contract; or a. To receive and expend funds; (2) Assumed in an employment contract b. To enter contracts; between the "city" and its employees. c. To hire employees; III h. Any wages and employment benefits for work that has been performed by the employee d. To purchase or otherwise acquire and hold making the claim, or any claimed increases in real or personal property; or LMCIT CMC(11-86)(Rev.11-99) Page 13 of 21 e. To sue or be sued. use, distribution, or handling of lead or asbestos. 11. Land use, development or franchise litigation 13. Limited pollution liability claim means any • means: claim for damages which resulted from a sudden occurrence which took place on or after the a. Any litigation relating to the application or retroactive date shown in the Declarations and interpretation of a land use, zoning, prior to the expiration date of this covenant, and subdivision,or similar ordinance or regulation; which: or a. Was caused by an actual, alleged, or b. Any litigation relating to the "city's" threatened discharge, dispersal, release, or involvement in the financing or approval of any escape of pollutants which took place entirely development or redevelopment project. above ground and not within or on the surface of any lake, stream, surface water, or other c. Any litigation relating to the granting, body of water, and in which any resulting refusal, interpretation, or enforcement of any damages occurred entirely above ground and franchise, ordinance, permit, license, or other not within or on the surface of any lake, mechanism through which the "city" authorizes stream, surface water, or other body of water; or regulates the provision of cable or communications, electricity, gas, heat, telephone, or other public utilities within the b. Arises from the accidental rupture, backup city. or overflow of the "city's" sanitary sewer, storm sewer, or water supply systems. Any litigation meeting the criteria listed above will be considered to be land use, development or 14. Loading or unloading means the handling of f ranchise litigation in its entirety, regardless of property whether the litigation may assert other claims as well. a. After it is moved from the place where it is accepted for movement into or onto an aircraft, But land use, development or franchise litigation watercraft or auto; does not include litigation that seeks only: b. While it is in or on an aircraft, watercraft or a. Compensation or other relief for an actual or auto; or alleged physical occupation, invasion, or use of property by the "city"; or c. While it is being moved from an aircraft, watercraft or auto to the place where it is b. Reduction or invalidation of a special finally delivered; but loading or unloading assessment; or does not include the movement of property by means of a mechanical device, other than a c. Compensation for damages based on the hand truck, that is not attached to the aircraft, "city's" actual or alleged negligent inspection watercraft or auto. or enforcement of the state building,plumbing, electrical, fire, or similar codes; or 15. Mobile equipment means any of the following types of land vehicles, including any attached d. Amounts due or allegedly due under machinery or equipment: contract, including any "city" bonds or other obligations. a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off 12. Lead or asbestos claim means any claim for public roads; damages arising out of the actual, alleged, or • threatened discharge, dispersal, release, escape, b. Vehicles that travel on crawler treads; LMCIT CMC )(Rev.11-99)� ) Pa a 14 of 21 g I " c. Vehicles, whether self-propelled or not, b. The publication or utterance of a libel or • maintained primarily to provide mobility to slander or other defamatory or disparaging permanently mounted: material, or a publication or utterance in violation of an individual's right of privacy. (1) Power cranes, shovels, loaders, diggers or drills; or c. Wrongful entry or eviction, or other invasion of the right of private occupancy. (2) Road construction or resurfacing equipment such as graders, scrapers or d. Assault or battery committed for the purpose rollers; of protecting persons or property or incident to an arrest. d. Vehicles not described in a., b., or c. above that are not self-propelled and are maintained e. The use of another's advertising idea in your primarily to provide mobility to permanently advertisement. attached equipment of the following types: f. Infringing upon another's copyright, trade (1) Air compressors,pumps and generators, dress or slogan in your advertisement. including spraying, welding, building cleaning, geophysical exploration, lighting 18. Pollutants means any solid, liquid, gaseous and well-servicing equipment; or or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, (2) Cherry pickers and similar devices used chemicals and waste. Waste includes materials to to raise or lower workers; be recycled, reconditioned or reclaimed. • e. Vehicles not described in a., b., or c. above 19. Products-completed operations hazard maintained primarily for purposes other than includes all bodily injury and property damage the transportation of persons or cargo. occurring away from premises the "city" owns or rents and arising out of your product or your work 16. Occurrence means: except: a. With respect to Coverage A, a wrongful act a. Products that are still in the "city's" or a series of related wrongful acts. physical possession; or b. With respect to Coverage C, an accident, b. Work that has not yet been completed or including continuous or repeated exposure to abandoned. substantially the same general harmful condition. 20. Your work will be deemed completed at the earliest of the following times: Provided, that for purposes of Section III, occurrence shall be given the same meaning as a. When all of the work called for in the given in the applicable statute establishing "city's" contract has been completed; monetary limits on the "city's" tort liability. b. When all of the work to be done at the site 17. Personal injury means injury other than has been completed if the "city's" contract calls bodily injury, arising out of one or more of the for work at more than one site; following offenses: a. False arrest, detention, or imprisonment, or • malicious prosecution. LMCIT CMC(11-86)(Rev.11-99) Page 15 of 21 c. When that part of the work done at a job site a. Computer hardware, including had been put to its intended use by any person or microprocessors; organization other than another contractor or subcontractor working on the same project. b. Computer application software; Work that may need service, maintenance, c. Computer operation systems and related correction, repair or replacement, but which is software; otherwise complete, will be treated as completed. d. Computer networks; 21. Property damage means: e. Microprocessors or other computer chips not part of any computer system; or a. Physical injury to tangible property, including all resulting loss of use of that f. Any other computerized or electronic property; or equipment or components. b. Loss of use of tangible property that is not 25. Wrongful act means any actual or alleged physically injured. error, statement, act, omission, offense, neglect, accident, or violation. Violation includes 22. Sudden occurrence means an accident which violation of any rights, immunities, or privileges takes place entirely above ground or water, and secured by the Constitution and Laws of the the pollution resulting therefrom, which begins United States of America. and ends within 72 hours following the accident. A related series of accidents shall be deemed to be 26. Year 2000 claim means any claim for a single sudden occurrence. In the case of a damages arising directly or indirectly out of: related series of accidents, the sudden occurrence will be deemed to have taken place when the first a. Any actual or alleged failure, malfunction, • accident in the related series of such accidents or inadequacy of any system or system took place. component, whether belonging to the "city" or to others, which is due to any year 2000 23. Suit means a civil proceeding in which problem. damages to which this coverage applies are alleged. Suit includes an arbitration proceeding b. Any actual or alleged failure, malfunction, alleging such damages to which the "city" must or inadequacy of any product, service, data, submit or submit with LMCIT's consent. Suit or function that directly or indirectly uses or does not mean any criminal proceeding against relies on any system or system component, any "covered party" or any open meeting law which is due to any year 2000 problem; or proceeding, unless damages are also alleged in that proceeding. A charge of employment c. Any advice, consultation, design, discrimination filed with the Federal Equal evaluation, inspection, installation, Employment Opportunity Commission, the maintenance, repair, replacement, or Commissioner of the Minnesota Department of supervision done by a "covered party" to Human Rights, or a local human rights determine, rectify, or test for any potential or commission as defined in Minn. Stat. §363.01, actual year 2000 problem. subd. 23 shall be deemed to be a suit alleging damages. 27. Year 2000 problem means the inability of any system or system component to correctly 24. System or system component means any of the recognize, process, distinguish, interpret, or following: accept the year 2000 and beyond. • LMCIT CMC(11-86)(Rev.11-99) Page 16 of 21 28. Your product means: representations made at any time with respect to the fitness, quality, durability or performance of a. Any goods or products, other than real any of the items included in a. and b. above. property, manufactured, sold, handled, distributed or disposed of by: Your product does not include vending machines or other property rented to or located for the use (1) The "city"; of others but not sold. (2) Others trading under the "city's" name; 29. Your work means: or a. Work or operations performed by the (3) A person or organization whose "city" or on the "city's" behalf; and business or assets the "city" has acquired; and b. Materials,parts or equipment furnished in connection with such work or operations. b. Containers (other than vehicles), materials, parts or equipment furnished in connection Your work includes warranties or representations with such goods or products. made at any time with respect to the fitness, quality, durability, or performance of any of the Your product includes warranties or 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 including actual loss of earnings up to$100 a day LMCIT defends: 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 6. Prejudgment interest awarded against the arising out of the use of any vehicle to which the "covered party" on that part of the judgment coverage applies. LMCIT does not have to furnish LMCIT pays. If LMCIT makes an offer to pay these bonds. the applicable limit of coverage, LMCIT will not pay any prejudgment interest based on that period 3. The cost of bonds to release attachments, but of time after the offer. only for bond amount within the applicable limit of coverage. LMCIT does not have to furnish 7. All interest on the full amount of any judgment these bonds. that accrues after entry of the judgment and before LMCIT has paid, offered to pay, or 4. All reasonable expenses incurred by the deposited in court the part of the judgment that is "covered party" at LMCIT's request,to assist it in within the applicable limits of coverage. the investigation or defense of the claim or suit, • LMCIT CMC(11-86)(Rev.11-99) Page 17 of 21 SECTION VI - CONDITIONS In addition to the Common Conditions, Liability 3. "COVERED PARTY'S" DUTIES IN THE Coverage Parts A and C are subject to the EVENT OF OCCURRENCE, CLAIM OR SUIT following conditions: a. In the event of a claim or suit, notice 1. LIMITATIONS ON LMCIT'S DUTY TO containing particulars sufficient to identify the INDEMNIFY "covered party" and also reasonably obtainable information with respect to the time, place and LMCIT's duty to pay on behalf of or to circumstances thereof, and the names and indemnify a "covered party" other than the addresses of the injured and of available "city" shall not apply to any act, error, witnesses, shall be given by or for the omission, or violation: "covered party" to LMCIT or any of its authorized agents as soon as practicable. a. Which constitutes malfeasance in office; or The "city" shall promptly take, at its own b. Which constitutes willful neglect of duty; or expense, all reasonable steps to prevent damages from arising out of the same or c. Which constitutes bad faith; or similar conditions; provided that: d. For which the "city" is not authorized to (1) A failure to take such preventative indemnify any person by statute; or measures shall not constitute a breach of this condition unless LMCIT has requested the e. Which constitutes dishonesty on the part of "city" in writing to undertake such • a "covered party"; or preventative measures; and f. Which constitutes the willful violation of a (2) Such expense shall not be recoverable statute or ordinance by any official, employee, under this covenant. or agent of the "city". Notice of damages or injury is not notice of a The terms "malfeasance", "willful neglect of claim. duty", and "bad faith" shall be given the same meaning in this covenant as given in the b. If claim is made or suit is brought against applicable statute with respect to the "city's" duty the "covered party", the "covered party" shall to defend or indemnify its officers, employees or immediately forward to LMCIT every demand, agents. notice, summons or other process received by him or his representative. 2. FINANCIAL RESPONSIBILITY LAW c. The "covered party" shall cooperate with When this covenant is certified as proof of LMCIT and, upon LMCIT's request, assist in financial responsibility for the future under the making settlements, assist in the conduct of provisions of any motor vehicle financial suits and assist in enforcing any right of responsibility law, such coverage as is afforded contribution or indemnity against any person by this covenant shall comply with the or organization who may be liable to the provisions of such law to the extent of the "covered party" because of damages for which coverage and limits of liability required by coverage such law. • LMCIT CMC(11-86)(Rev.11-99) Page 18 of 21 • is afforded under this covenant; and the Number of Years Since "covered party" shall attend hearings and trials Retroactive Date Shown and assist in securing and getting evidence and on Declarations Page Additional Cost obtaining the attendance of witnesses. The "covered party" shall not, except at his own 1 55.0% cost, voluntarily make any payment, assume 2 57.0% any obligation or incur any expense other than 3 60.3% for first aid to others at the time of accident. 4 65.9% 5 70.8% 4. EXTENDED REPORTING PERIOD 5+ 70.8% a. LMCIT will provide one or more extended d. An extended reporting period does not reporting periods, as described below, if: extend the coverage period or change the scope of coverage provided. It applies only if the (1) Coverage A is cancelled or not renewed; date of the occurrence giving rise to the claim or for damages is after the retroactive date and before the end of the coverage period. (2) LMCIT renews or replaces Coverage A with coverage that: Claims for damages which are first received and recorded during the basic extended (a) Has a retroactive date later than the reporting period (or during the supplemental date shown on the Declarations page; or extended reporting period, if it is in effect) will be deemed to have been made on the last . (b) Does not apply on a claims made day of the coverage period. basis. Once in effect, extended reporting periods may b. A basic extended reporting period of 60 not be cancelled. days from the end of the coverage period is automatically provided without additional e. Extended reporting periods do not reinstate 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 is applicable to, and no extended reporting 60 days after the end of the coverage period. period is provided for, the following: The "city" must give LMCIT a written request (1) Any limited pollution liability claim; for the endorsement within 60 days after the end of the coverage period. The supplemental (2) Any land use, development or franchise extended reporting period will not go into litigation; effect unless the "city" pays the additional premium promptly when due. (3) Any lead or asbestos claim; or The additional premium for the supplemental (4) Any year 2000 claim. extended reporting period will be a percentage of the annual expiring premium for Coverage • Part A. LMCIT CMC(11-86)(Rev.11-99) Page 19 of 21 5. ACTION AGAINST LMCIT 7. CONSENT TO SETTLE • No action shall lie against LMCIT unless, as a The "city" may prohibit LMCIT from settling • condition precedent thereto, there shall have any claim or suit against a "covered party" been full compliance with all of the terms of without the "city's" consent, as provided this covenant, nor until the amount of the below: "covered party's" obligation to pay shall have been fully determined either by judgment a. At any time before LMCIT has offered or against the "covered party" after actual trial or made a settlement of a claim or suit, the "city" by written agreement of the "covered party", may notify LMCIT that LMCIT may not settle the claimant and LMCIT. the claim or suit without the "city's" consent. The "city" must give a separate notice for each Any person or organization or the legal claim or suit which the "city" intends to representative thereof who has secured such prohibit LMCIT from settling without the judgment or written agreement shall thereafter "city's" consent. be entitled to recover under this covenant to the extent of the coverage afforded by this b. If the "city" notifies LMCIT that the claim covenant. No person or organization shall have or suit may not be settled without the "city's" any right under this covenant to join LMCIT as consent, the "city" must designate an a party to any action against the "covered individual authorized to give or refuse consent party" to determine the "covered party's" on the "city's" behalf. The "city's" notice must liability, nor shall LMCIT be impleaded by the include the name, address, and telephone "covered party" or his legal representative. number of the individual authorized to give or refuse consent on the "city's" behalf. Bankruptcy or insolvency of the "covered party" or of the "covered party's" estate shall c. If the "city" has notified LMCIT that the • not relieve LMCIT of any of its obligations claim or suit may not be settled without the hereunder. "city's" consent, LMCIT will notify the "city" of the terms and conditions of any proposed 6. WAIVER OF STATUTORY LIABILITY settlement. If the "city" does not consent to the LIMITATIONS proposed settlement, the "city" must notify LMCIT within 14 days of the date the "city" a. It is the express intent of the "city" and of receives notice of the proposed settlement, LMCIT that the procurement of this covenant unless the "city" and LMCIT have mutually shall not waive any monetary limits of liability agreed to a longer or shorter period. If within provided by Minnesota Statute 466.04 by any that time the "city" does not notify LMCIT comparable or successor statute,or by common that the "city" does not consent to the law, which may be applicable to any "covered settlement, the "city" will be deemed to have party"; and that any previous waiver of consented to the settlement. liability limits is revoked to the extent that it may apply to claims covered under this d. If the "city" refuses to consent to a covenant. settlement recommended by LMCIT, LMCIT will not be liable for any excess amount. b. It is the express intent of the "city" and of Excess amount means the sum of all damages LMCIT that the procurement of this covenant and legal defense costs for the claim or suit shall not waive any other immunities, minus the sum of: limitations, or defenses imposed by or available under any statute or common law which is applicable to any "covered party". • LMCIT CMC(11-86)(Rev.11-99) Page 20 of 21 (1) The amount of the settlement proposed 8. RETROACTIVE JOINT POWERS • by LMCIT; and COVERAGE (2) Any costs of defense incurred before LMCIT will, upon the "city's" request, issue the date of the "city's" refusal. Any excess retroactive comprehensive municipal coverage amount shall not be included in the to any joint powers entity in which the "city" calculation of damages for purposes of any is a member and which is not named as a applicable "Each Occurrence Deductible" "covered party" under any other LMCIT or "General Aggregate Deductible". coverage. e. If the "city" refuses to consent to a Pursuant to this section, LMCIT will issue its settlement recommended by LMCIT, LMCIT standard Comprehensive Municipal Coverage may, at its sole discretion, exercise either of document to the joint powers entity but the following options: coverage shall be subject to an annual aggregate limit of$200,000. This limit shall (1) LMCIT may pay to the "city" an apply to the sum of damages and loss amount equal to the amount of the adjustment expenses including defense costs recommended settlement, minus any for all claims to which the coverage applies. applicable deductible. If LMCIT makes such payment, LMCIT has no further duty Coverage issued pursuant to this section will to defend or to indemnify the "city" or any be issued with the same inception date and the other "covered party" for this claim or same retroactive date as this covenant. suit, and the "city" assumes any duty which LMCIT would otherwise have had to The premium must be paid to LMCIT before • defend and to indemnify any other the coverage goes into effect. The premium "covered party". for coverage issued pursuant to this section shall be equal to the greater of $5,000 or the (2) LMCIT may continue to defend the premium the joint powers entity would claim or suit. If LMCIT elects to continue otherwise pay for coverage at LMCIT's current to defend the claim or suit, the "city" must rates. reimburse LMCIT for any excess amount. 9. NO DUPLICATION OF COVERAGE f. If the "city" refuses to consent to a settlement recommended by LMCIT, the "city" This covenant shall not apply to any claim or must defend and indemnify LMCIT for any claims arising out of an occurrence, if any claim or suit arising out of the failure to settle claim or claims arising out of that occurrence, the original claim or suit. were covered under any prior covenant issued by LMCIT to the "city". • LMCIT CMC(11-86)(Rev.11-99) Page 21 of 21 COMPREHENSIVE MUNICIPAL LIABILITY COVERAGE 40 X 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" X Coverage B Medical and Related Payments X Coverage C Automobile Liability - "Bodily Injury" and "Property Damage" X 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 7, 1998. for all coverage where ❑ is X'd above. All other terms and conditions remain unchanged. II LMCIT Page 1 of 1 ME066(11/96) (Rev. 11/99) 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. ME073 (11/97) II� LMC MUNICIPAL LIABILITY Longue of Mi onssofa Cities • Cities promoting romiewav CITY OAK PARK HEIGHTS COVENANT NUMBER CMC 20796 ATTN: THOMAS MELENA HAZARD : PREMIUM BASIS I ADVANCED PREMIUM: Premises Operations Code Basis OPERATING EXPENDITURES A 2, 345, 336 PREMIUM INCLUDED FOR ALL HAZARDS WATERWORKS D 63,222 WHERE A PREMIUM BASIS IS SHOWN STREETS B 15 • Independent Contractors G 3,282,867 ducts/Completed Operations TERWORKS 207,000,000 1 L 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. SLMCIT MGL-1(01-95) Page 2 of 2 Covenant Number: MUNICIPAL AUTOMOBILE DECLARATIONS CMC 20796 Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES LMC INSURANCE TRUST (Herein called LMCIT) League ofMinnesota Cis Cities promoting.mas iiwea¢ Item 1. CITY: OAK PARK HEIGHTS ATTN: THOMAS MELENA Item 2. COVERAGE PERIOD: ONE YEAR From: 07/07/00 To: 07/07/01 12:01 AM Standard Time at Mailing Address Indicated on Common Coverage Declarations Item 3. THE COVERED PARTY IS: CITY Item 4. SCHEDULE OF COVERAGES AND COVERED AUTOS: THIS COVENANT PROVIDES ONLY THOSE COVERAGES WHERE A SYMBOL IS SHOWN IN THE COVERED AUTO COLUMN BELOW. EACH OF THESE COVERAGES WILL APPLY ONLY TO THOSE AUTOS SHOWN AS COVERED AUTOS. AUTOS ARE SHOWN AS COVERED AUTOS FOR A PARTICULAR COVERAGE BY THE ENTRY OF ONE OR MORE OF THE SYMBOLS FROM ITEM SIX NEXT TO THE NAME OF THE COVERAGE. COVERAGES COVERED AUTOS'" LIMIT LIABILITY 1 ** $1,000,000 Per Occurrence PERSONAL INJURY PROTECTION i 2 ** Basic Minnesota Statutory Coverage Uninsured&Underinsured Motorists In . 2 ** $1,000,000 Per Occurrence COMPREHENSIVE COVERAGE 6 ** SPECIFIED PERILS COVERAGE I NOT COVERED ** COLLISION COVERAGE ' 6 ** *(Entry of one or more of the symbols from Item Six shows which autos are covered autos) IS. **DEDUCTIBLE (SUBJECT TO GENERAL ANNUAL AGGREGATE DEDUCTIBLE,IF ANY, SHOWN ON COMMON COVERAGE DECLARATIONS). $ 500 per occurrence (unless otherwise indicated on MEO21). Item 6. DESCRIPTION OF COVERED AUTO DESIGNATION SYMBOLS: SYMBOL DESCRIPTION 1 ANY AUTO 2 OWNED AUTOS ONLY. Only those autos you own(and for liability coverages any trailers you don't own while attached to power units you own). 3 SPECIFICALLY DESCRIBED AUTOS.Only those autos described in ITEM FOUR for which a premium charge is shown (and for liability coverages any trailers you don't own while attached to any power unit described in ITEM FOUR). 4 HIRED AUTOS ONLY.Only those autos you lease,hire,rent or borrow.This does not include any auto you lease,hire, rent or borrow from any of your employees or members of their households. 5 NON-OWNED AUTOS ONLY. Only those autos you do not own,lease,hire or borrow which are used in connection with your business.This includes autos owned by your employees or members of their households,but only while used in your business or your personal affairs. 6 OWNED AUTOS ONLY.Only those autos you own and are scheduled on ME021. This includes autos that you acquire ownership after the covenant begins. Item 7. SEE ATTACHED SCHEDULE OF COVERED AUTOS YOU OWN (ME021). Item 8. FORMS AND ENDORSEMENTS ATTACHED TO THIS COVERAGE PART: A0010(11-95) A2108(11-96) A2225(11-89) CMC(11-99) M E021(01-95) ME066(11-99) • LMCIT DEC-016(11/86)(Rev.11/99) Municipal Auto Physical Damage • Coverage Part In return for the payment of the premium and subject to a. To received and expend funds; all the terms of this Coverage Part, we agree with you as follows: b. To enter into contracts; PART I -- WORDS AND PHRASES WITH c. To hire employees; SPECIAL MEANING — READ THEM CAREFULLY d. To purchase or otherwise acquire and hold real or personal property; or The following words and phrases have special meaning throughout this Coverage Part and appear in quotes e. To sue or be sued. when used: PART H -- WHICH AUTOS ARE COVERED A. "You" and "your" mean the person or organization AUTOS shown as the "city" in ITEM ONE of the declarations. A. ITEM FOUR of the declarations shows the "autos" B. "We", "us", "our" mean League of Minnesota for each of "our" coverages. The numerical Cities Insurance Trust. symbols, explained in ITEM SIX of the declarations describe which "autos" are covered C. "Auto" means a land motor vehicle, trailer or "autos". The symbols entered next to a coverage semitrailer designed for travel on public roads. designate the only "autos" that are covered under • "autos". D. "Loss" means direct and accidental damage or loss. B. OWNED AUTOS YOU ACQUIRE AFTER THE POLICY BEGINS E. "City" means governmental body or entity first named in the Declarations. For purposes of this 1. If symbol "3" is entered next to a coverage in coverage "city" includes relief associations. ITEM FOUR, an "auto" "you" acquire will Unless specifically named in the Declarations, be a covered "auto" for that coverage only if: "city" shall not include a gas, electrical, or steam utilities commission; port authority, housing and a. "We" already cover all "autos" that "you" redevelopment authority, economic development own for that coverage if it replaces an authority, area or municipal redevelopment "auto" "you" previously owned that had authority, or similar agency; municipal power that coverage; and agency; municipal gas agency; hospital or nursing home board or commission; welfare or public b. "You" tell "us"within 30 days after "you" relief agency; school board; airport commission; acquire it that "you" want "us" to cover it or "joint powers entity". for that coverage. "Joint powers entity" means an operating entity 2. If symbol "6" is entered next to a coverage in created by two or more governmental units ITEM FOUR, an auto "you" acquire will be a entering into an agreement as provided by statute covered "auto" for that coverage until the for the joint exercise of governmental powers. An covenant period ends. intergovernmental agreement will be deemed to create a "joint powers entity" if the agreement establishes a board with the effective power to do PART III — WHERE AND WHEN THIS any of the following, regardless of whether the COVERAGE PART COVERS • specific consent of the constituent governmental units may also be required: "We" cover "losses" which occur during the coverage period: LMCIT A0010 (11/89) (Rev. 11-95) page 1 of 3 S. • Municipal Auto Physical Damage • Coverage Part In return for the payment of the premium and subject to a. To received and expend funds; all the terms of this Coverage Part, we agree with you as follows: b. To enter into contracts; PART I — WORDS AND PHRASES WITH c. To hire employees; SPECIAL MEANING — READ THEM CAREFULLY d. To purchase or otherwise acquire and hold real or personal property; or The following words and phrases have special meaning throughout this Coverage Part and appear in quotes e. To sue or be sued. when used: PART H -- WHICH AUTOS ARE COVERED A. "You" and "your" mean the person or organization AUTOS shown as the "city" in ITEM ONE of the declarations. A. ITEM FOUR of the declarations shows the "autos" B. "We", "us", "our" mean League of Minnesota for each of "our" coverages. The numerical Cities Insurance Trust. symbols, explained in ITEM SIX of the declarations describe which "autos" are covered C. "Auto" means a land motor vehicle, trailer or "autos". The symbols entered next to a coverage semitrailer designed for travel on public roads. designate the only "autos" that are covered under • "autos". D. "Loss" means direct and accidental damage or loss. B. OWNED AUTOS YOU ACQUIRE AFTER THE POLICY BEGINS E. "City" means governmental body or entity first named in the Declarations. For purposes of this I. If symbol "3" is entered next to a coverage in coverage "city" includes relief associations. ITEM FOUR, an "auto" "you" acquire will Unless specifically named in the Declarations, be a covered "auto" for that coverage only if: "city" shall not include a gas, electrical, or steam utilities commission; port authority, housing and a. "We" already cover all "autos" that "you" redevelopment authority, economic development own for that coverage if it replaces an authority, area or municipal redevelopment "auto" "you" previously owned that had authority, or similar agency; municipal power that coverage; and agency; municipal gas agency; hospital or nursing home board or commission; welfare or public b. "You" tell "us"within 30 days after "you" relief agency; school board; airport commission; acquire it that "you" want "us" to cover it or "joint powers entity". for that coverage. "Joint powers entity" means an operating entity 2. If symbol "6" is entered next to a coverage in created by two or more governmental units ITEM FOUR, an auto "you" acquire will be a entering into an agreement as provided by statute covered "auto" for that coverage until the for the joint exercise of governmental powers. An covenant period ends. intergovernmental agreement will be deemed to create a "joint powers entity" if the agreement establishes a board with the effective power to do PART III — WHERE AND WHEN THIS any of the following, regardless of whether the COVERAGE PART COVERS • specific consent of the constituent governmental units may also be required: "We" cover "losses" which occur during the coverage period: LMCIT A0010 (11/89) (Rev. 11-95) page 1 of 3 A. In the United States of America, its territories or 6. "Loss" to tape decks or other sound �r possessions, Puerto Rico or Canada; or reproducing equipment not permanently - installed in a covered "auto". B. While the covered "auto" is being transported between any of these places. 7. "Loss" to tapes, records, or other sound • reproducing devices designed for use with PART IV --PHYSICAL DAMAGE COVERAGE sound reproducing equipment. A. "WE" WILL PAY 8. "Loss" to any sound receiving equipment designed for use as a citizens' band radio, two- 1. "We" will pay for "loss" to a covered "auto" way mobile radio or telephone or scanning or its equipment under: monitor receiver, including its antennas and other accessories, unless permanently installed a. Comprehensive Coverage. From any in the dash or console opening normally used cause except the covered "auto's" by the "auto" manufacturer for the installation collision with another object or its of a radio. overturn. C. HOW WE WILL PAY FOR LOSSES -- THE b. Specified Perils Coverage. Caused by: MOST WE WILL PAY (1) Fire or explosion; 1. At "our" option "we" may" (2) Theft; a. Pay for, repair or replace damaged or stolen property; or (3) Windstorm, hail, or earthquake; b. Return the stolen property, at "our" (4) Flood; expense. "We" will pay for any damage that results to the "auto" from the theft. (5) Mischief or vandalism; 2. The most "we" will pay for "loss" is the (6) The sinking, burning, collision smaller of the following amounts: or derailment of any conveyance transporting the covered "auto". a. The actual cash value of the damaged or c. Collision Coverage. Caused by the stolen property at the time of"loss"; covered "auto's" collision with another object or its overturn. b. The cost of repairing or replacing the damaged or stolen property with other of B. WE WILL NOT COVER- EXCLUSIONS like kind or quality. This coverage does not apply to: 3. For each covered "auto" "our" obligation to pay for, repair, return or replace damaged or 1. Wear and tear, freezing, except freezing of the stolen property will be reduced by the pumping apparatus of a fire truck or similar applicable deductible shown in the declarations. emergency or other utility truck, mechanical or electrical breakdowns unless caused by other D. GLASS BREAKAGE -- HITTING A BIRD OR "loss" covered by this Coverage Part. ANIMAL, FALLING OBJECTS OR MISSILES 2. Blowouts, punctures, or other road damage to "We"will pay for glass breakage, "loss" caused by tires unless caused by other "loss" covered by hitting a bird or animal or by falling objects or this Coverage Part. missiles under Comprehensive Coverage if "you" carry Comprehensive Coverage for the damaged 3. "Loss" caused by declared or undeclared war covered "auto". However, "you" have the option or insurrection or any of their consequences. of having glass breakage caused by covered "auto's" collision or overturn considered a "loss" 4. "Loss" caused by the explosion of a nuclear under Collision Coverage. weapon or its consequences. • E. ERRORS AND OMISSIONS 5. "Loss" caused by radioactive contamination. We will pay for loss to any owned "auto" if the LMCIT A0010 (11/89) (Rev. 11-95) page 2 of 3 loss is not covered solely because of: amount of"loss", either may I. Any error or omission in the description of the demand an appraisal of the "loss". In such ' owned "auto" covered by the covenant, which event, "you" and "we" shall each select a • error omission existed at the inception date of competent appraiser. The two appraisers will the covenant, or select a competent and disinterested umpire. If they cannot agree, either may request that 2. Any errors or omissions in the description of selection be made by a judge of court having the owned "auto" in endorsements to the jurisdiction. The appraisers will state covenant, or separately the actual cash value and the amount of "loss". If the appraisers fail to agree, they 3. Failing through error to schedule an owned will submit their differences to the umpire. An "auto" at the inception of the covenant. award agreed to by any two will be binding. Each party will: such loss shall be covered hereunder, but in no case to exceed $500,000 Any One "Auto" a. Pay its chosen appraiser; and subject to a maximum of$500,000 Any One Loss. With respect to this loss, we will pay b. Bear the other expenses of the appraisal 90% of the loss and the "city" will pay 10% of and umpire equally. the loss. It is a condition of this coverage that such error or omission shall be reported and 2. "We" shall not be held to have waived any of corrected when discovered. "our" rights by any act relating to appraisal. PART V -- CONDITIONS C. RENTAL VEHICLES A. "YOUR" DUTIES AFTER LOSS If "you" rent an "auto" and it is used for "city" business, this coverage will be primary. 1. "You" must promptly notify "us" or "our" agent of any "loss". "You" must tell "us" how, when, and where the "loss" happened. "You" must assist in obtaining the names and addresses of any witnesses. 2. Additionally, "you" must: a. Cooperate with "us" in the investigation, settlement or the conduct of any suit. "You" shall not, except at "your" own cost, voluntarily make any payment, assume any obligation, or incur any expense. b. Permit "us" to inspect and appraise the damaged property before its repair or disposition. c. Do what is reasonably necessary after "loss" at "our" expense to protect the covered "auto" from further loss. d. Submit a proof of"loss" when required by "us". - e. Promptly notify the police if the covered "auto" or any of its equipment is stolen. al B. APPRAISAL 1. If "you" and "we" fail to agree as to the LMCIT A0010 (11/89) (Rev. 11-95) page 3 of 3 • Uninsured and Underinsured Motorists Coverage A. WORDS AND PHRASES WITH SPECIAL a. Owned or operated by a self-insurer under MEANING any applicable motor vehicle law. In addition to the WORDS AND PHRASES WITH b. Owned by a governmental unit or agency. SPECIAL MEANING in the COVENANT, the following words and phrases have special meaning for c. Designed for use mainly off public roads UNINSURED MOTORISTS COVERAGE, and while not on public roads. UNDERINSURED MOTORISTS COVERAGE. 4. "Underinsured motor vehicle" means a land 1. "Family Member" means a person related to you motor vehicle or trailer for which the sum of all by blood, marriage or adoption who is a resident liability bonds or policies at the time of an of your household, including a ward or foster accident provides at least the amounts required child. by the applicable law where a covered auto is principally garaged but their limits are less than 2. "Occupying" means in,upon, getting in, on, out the limit of this insurance. However, or off. "underinsured motor vehicle" does not include any vehicle: 3. "Uninsured motor vehicle" means a land motor vehicle or trailer: a. Owned or operated by a self-insurer under • any applicable motor vehicle law. a. For which no liability bond or policy at the time of an accident provides at least the b. Owned by a governmental unit or agency. amounts required by the applicable law where a covered auto is principally garaged, c. Designed for use mainly off public roads or while not on public roads. b. For which the sum of all liability bonds or d. Which is an uninsured motor vehicle. policies at the time of an accident provides at least the amounts required by the applicable B. WE WILL PAY law where a covered auto is principally garaged but their limits are less than the limit 1. We will pay all sums the beneficiary is legally of this insurance, or entitled to recover as "damages" from the owner or driver of an uninsured motor vehicle or c. For which an insuring or bonding company underinsured motor vehicle. The "damages" denies coverage or is or becomes insolvent, must result from bodily injury sustained by a or "covered party" caused by an accident. The owner's or driver's liability for these "damages" d. Which is a hit-and-run vehicle and neither the must result from the ownership, maintenance or driver nor owner can be identified. The use of the uninsured motor vehicle or vehicle must hit a beneficiary,a covered auto underinsured motor vehicle. or a vehicle a beneficiary is occupying. 2. If this coverage provides a limit in excess of the However, "uninsured motor vehicle" does not amounts required by the applicable law where a include any vehicle: covered auto is principally garaged, we will pay • A2108(11/96) Page 1 of 2 only after all liability bonds or policies have been 2. Any amount payable under this COVERAGE exhausted by judgments or payments. shall be reduced by: • 3. Any judgment for"damages"arising out of a suit a. All sums paid by or for anyone who is legally brought without written notice to us is not responsible,including all sums paid under the binding on us. COVENANT'S LIABILITY coverage. C. WE WILL NOT COVER- EXCLUSIONS F. CHANGES IN CONDITIONS This does not apply to: The CONDITIONS of the COVENANT are changed for UNINSURED MOTORISTS COVERAGE as 1. Any claim settled without our consent, follows: 2. The direct or indirect benefit of any insurer or 1. YOUR DUTIES AFTER ACCIDENT OR LOSS self-insurer under any workers' compensation, is changed by adding the following: disability benefits or similar law. a. Promptly notify the police if a hit-and-run 3. Bodily injury sustained by you or any family driver is involved, and member while occupying or struck by any vehicle owned by you or any family member b. Promptly send us copies of the legal papers if which is not a covered auto. a suit is brought. 4. Anyone using a vehicle without a reasonable 2. OUR RIGHT TO RECOVER FROM OTHERS belief that the person is entitled to do so. is changed by adding the following: D. WHO IS COVERED If we make any payment and the"covered party" • recovers from another party,the beneficiary shall 1. You or any family member. hold the proceeds in trust for us and pay us back the amount we have paid. 2. Anyone else occupying a covered auto or a temporary substitute for a covered auto. The covered auto must be out of service because of its breakdown, repair, servicing, loss or destruction. 3. Anyone for "damages" he or she is entitled to recover because of bodily injury sustained by another beneficiary. E. OUR LIMIT OF LIABILITY 1. Regardless of the number of "covered parties", claims made or vehicles involved in the accident, the most we will pay for all "damages"resulting from any one accident is the limit of UNINSURED AND UNDERINSURED MOTORISTS COVERAGE shown in the declarations. A2108(11/96) Page 2 of 2 • Personal Injury Protection Endorsement • (Minnesota) LMCIT agrees to provide Statutory Minnesota No-Fault Coverage for all autos described on the Municipal Automobile Declarations. The Comprehensive Municipal Coverage Common Conditions also apply unless they are in conflict with the Minnesota No-Fault law. In that event, Minnesota No-Fault law shall govern. • • • LMCIT A-2225(11/89) SCHEDULE OF VEHICLES - OAK PARK HEIGHTS ATTN: THOMAS MELENA COVENANT NUMBER - CMC 20796 LMC iVENANT PERIOD: 07/07/00 - 07/07/01 I.0091,01 o/M:1.,0p0rore». Ober promoting accanowsoa 1 [l COMP. I I I I I I [] SP. PERILS! I I VEH VEH ACV I COMP.I STATED 1 COLL I NO. DESCRIPTION ID ! COMP.! DED, I AMOUNT I COLL. I DED. 1. { I 1 I I 1 Autos owned at inception of this covenant and shown 1 i I I I I I I I I 1 I I ion this schedule have coverage as indicated by "X". I I 1 ! I L I I I I I I I Coverage is subiect to the deductible indicated. I I L ! I 1, 1 I I I I I ' 1001) 1987 CHEV 1TON TRUCK 69601 X I 500L X I 5001 • 1002) 1995 FORD CROWN VICT 18171 X I 5001 J X L 5001 1 1 1 1003) 1997 FORD 'leWN VICT 7069 ! X 1 500 ! I X ! 500L 1• 004) 1997 CHEV PICKUP 65711 X 5001_ I X 1 5001 ; ' 1005) 1990 CHEV PICKUP 59361 X L 500 ! I X I 500L B ' 1006) 1998 FORD CROWN VICT 50181 X ! 5001 I X ! 5001 { I i 1 { I { AV) 1995 CHEV CAPRICE 4521 ! X i 5001 i X ! 5001 • 1008) 1996 CHEV BLAZER 12361 X ! 5001 1 X I 500L { { i i { I I ' 1009) 1999 FORD F350 4X4 W/PLOW 35071 X ! 500! 1 X ! 500L 1 { I { { { 1 ' 1010) 1999 FORD F550 DUMP W/PLO 3333! X 1 5001 1 X 1 500,E ' 1011) 1999 GMC YUKON 17041 X i 5001 I X I 5001 I 1 1 { • 1012) 2000 FORD EXPEDITION 6653! X I 5001 I X ! 500L I I I I I I { 1 1 I I I ! 1 1 ! I I I I 1 1 ! ! I 1 1 I I 1 I I 1 I 1 I 1 I 1 i I I I I I 1 1 I I I I ! 1 I 1 I i I 1 11 I I I I I 1 { 1 { I I 1 { 1 I I 1 I I L I I I I I I I 1 I 1 1 ► I L 10 1 1 I I I I 1 1 I I 1 I i I ! 1 ! ! L ME021 (01-95) COMPREHENSIVE MUNICIPAL LIABILITY COVERAGE Anis X 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" X Coverage B Medical and Related Payments X Coverage C Automobile Liability - "Bodily Injury" and "Property Damage" • X 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 7, 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. 11/99) • LMC League of Minnesota Cities Cities promoting excellence League of Minnesota Cities 145 University Avenue West St.Paul,MN 55103-2044 (651)281-1200 Municipal • Excess Liability Coverage Administered By: Berkley Risk Services,Inc. 145 University Avenue West St.Paul,MN 55103-2044 (651)281-1200 • **IMPORTANT** PLEASE READ YOUR AGREEMENT • Covenant Number: MUNICIPAL EXCESS MEL- 3733 LIABILITY DECLARATIONS LMC Coverage is Provided by: THE LEAGUE OF MINNESOTA CITIES Leaguer of Minnesota Cifas il 0ious Covenant Number: INSURANCE TRUST Out,p,o*,nJgam:411nm MEL- 3468 (Herein called LMCIT) Item 1. CITY and MAILING ADDRESS: OAK PARK HEIGHTS, CITY OF "CLAiNfS-MADE" P.O. BOX 2007 STILLWATER, MN 55082-2007 Item 2. COVERAGE PERIOD: ONE Year(s) From: 07/07/00 To: 07/07/01 12:01 AM Standard Time at Mailing Address Indicated on ITEM ONE. Item 3. RETROACTIVE DATE: 07/07/87 Item 4. THE COVERED PARTY IS: X City Joint Powers Entity Other(Describe) Item 5. LIMITS OF COVERAGE: Each Occurrence $ 1,000,000. Aggregate Limit $ 1,000,000. Minimum Retention $ 10,000. (If Applicable) .6. PREMIUM: $7,046. Item 7. AUDIT PERIOD: Annual X None Other(Describe) Item s. SCHEDULE OF UNDERLYING COVERAGE: Primary Coverage Provided by: LMCIT Covenant Number: CMC 20796 Coverage Period: From:07/07/00 To: 07/07/01 Including those coverages X'd below: LIMITS: X Automobile X Municipal Land Use or Municipal Liability Liability Development Liquor Litigation Liability Liability $1,000,000 CSL $1,000,000 CSL* $1,000,000 CSL* $ $ *See underlying coverage document for other specific limits that may apply. Employers Liability: Carrier: LMCIT Coverage B Limits: $1,000,000./$1,000,000. Policy Number: Policy Term: From:07/07/00 To: 07/07/01 Other: Carrier: Policy Number: Policy Term: From: To: Item 9. FORM NUMBERS AND/OR ENDORSEMENTS FOR I G A PART OF THE AGREEMENT AT ISSUE: MELC(1 1-98), UME-43 (01/95), UME-46 (01/95), UME-4( 01/9: ME- 1/97) • Executiv Director, LMCIT. LMCIT DEC-017(11/96)(Rev. 11/99) Administered by: Berkley Risk Administrators Compan • MUNICIPAL EXCESS LIABILITY COVERAGE Various provisions in this covenant restrict coverage. League of Minnesota Cities Insurance Trust, Read the entire coverage agreement and any hereinafter referred to as LMCIT. underlying coverage carefully to determine rights, duties and what is covered and not covered. The words "this coverage" mean the liability coverage provided under this covenant. Throughout this covenant the words "you" and "your" refer to the "city" shown in the Declarations. Other words and phrases that appear in italics have The words "we", "us" and "our" refer to the special meaning. Refer to SECTION III - DEFINITIONS. SECTION I - LIABILITY COVERAGE 1. COVERAGE AGREEMENT c. The amount "we" will pay for damages and defense expense is limited as described in a. "We" will pay those sums, in excess of the SECTION II - LIMITS OF COVERAGE. amount payable under the terms of any under- Damages include prejudgment interest awarded lying coverage, that the covered party becomes against the insured. • legally obligated to pay as damages because of injury or damage to which this covenant d. With respect to any coverage provided by applies, provided that the underlying coverage underlying coverage on a claims made basis, also applies, or would apply but for the "this coverage" does not apply to any injury or exhaustion of its applicable limits of coverage, damage,or personal injury offense,or negligent If, however, a Minimum Retention applies, as act, error, omission, or violation(or the first in set forth in paragraph 4 below, "we" will pay a series of related acts, errors, omissions, or only those sums in excess of the Minimum violations) which occurred or were committed Retention. before the retroactive date, if any, shown in the Declarations of this covenant or which occurs or b. "We" will have the right to participate in the is committed after the coverage period. defense of claims or suits against the covered party seeking damages because of injury or e. This covenant is subject to the same terms, damage to which "this coverage" may apply. conditions, agreements, exclusions and defini- "We" will have a duty to defend such claims or tions as the underlying coverage, except: suits when the applicable limit of coverage of the underlying coverage has been used up by (1) "We" will have no obligation under this payment of judgments, settlements and any cost covenant with respect to any claim or suit or expense subject to such limit. that is settled without "our" consent; and (2) With respect to any provisions to the This right or duty to defend is limited as set O P Y P forth in paragraph 3, below. contrary contained in this covenant. • LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 1 of 8 2. EXCLUSIONS The exclusions applicable to the underlying litigation" suit which may not be settled without coverage also apply to this covenant. Additionally, the approval of both LMCIT and the "city". this covenant does not apply to: b. "Our" right or duty to defend ends when "we" a. Any obligation to pay expenses under any have used up the amount of coverage available medical payments coverage. in the payment of any combination of judgments, settlements or defense expense, as b. Any obligation imposed by law under any provided under SECTION II - LIMITS OF automobile no-fault, uninsured motorist, under COVERAGE. This applies both to claims and insured motorist, Workers' Compensation, suits pending at that time and those filed disability benefits or unemployment thereafter. compensation law or any similar law. c. When "we" control the defense of a claim or c. Any loss or claim for damage that is caused in suit, "we" will pay for the defense expense. If part or in total by nuclear reaction or radiation, by mutual agreement or court order the covered or radioactive contamination, however caused. party assumes control before the applicable amount of coverage available is used up, "we" d. Any "lead or asbestos claim" as defined in the will reimburse the covered party for reasonable underlying coverage. defense expense. In either case, the amounts "we" pay will reduce the amount of coverage • e. Any "failure to supply claim" as defined in the available as provided under SECTION II - underlying coverage. LIMITS OF COVERAGE. f. Any "year 2000 claim" as defined in the d. As soon as practicable after"we"become aware underlying coverage. that an amount of coverage available is used up: 3. DEFENSE OF CLAIMS OR SUITS (1) "We" will notify "you" of any outstanding claims and suits subject to that amount; and a. When "we"have the duty to defend, and except as provided under Section II - Limits of (2) "You" will then arrange to assume control Coverage, paragraph 4, with respect to "land of the defense of all such claims and suits use or development litigation", "we" will pay against "you" or any other covered party for all defense expense once "our" duty to when "our" right or duty to defend them defend begins. "We"may make investigation of ends. any claim or suit as "we" think appropriate. If "we" exercise "our" right to defend when there is no duty, "we"will pay only that defense expense "we" incur. If"we"provide a defense, "we"may investigate any claim or suit at "our" discretion. "We"may settle such claim or suit within the amount of • coverage available at the time of the settlement, except for any "land use or development LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 2 of 8 e. "We" will assist the covered party in the (2) "You" will reimburse "us" for any defense transfer of control of the defense of claims and expense that arises out of such steps if the suits under (c.) or (d.) above. Until such applicable amount of coverage available has arrangements are completed, "we" will take on been used up. behalf of any covered party those steps that "we" think appropriate: 4. MINIMUM RETENTION (1) To avoid a default in any claim or suit; or The Minimum Retention, if any, shown in the Declarations applies to all injury and damage (2) To the continued defense of a claim or suit. arising out of any one occurrence, if at the time of the first claim or suit for any such injury or "You" agree that if "we" take such steps: damage the applicable aggregate limit of the underlying coverage has been used up by payment (1) "We" do not waive or give up any of"our" of judgments, settlements, and any costs or rights under this covenant; and expenses subject to such limit. SECTION II - LIMITS OF COVERAGE 1. The limits of coverage shown in the Declarations 3. Subject to (2) above, the each occurrence limit is and the rules below fix the most "we" will pay the most "we" will pay for the sum of damages under the terms of this covenant regardless of the under SECTION I - LIABILITY COVERAGE number of: because of all injury and damage arising out of any one occurrence. a. Covered parties; 4. For any "land use or development litigation" as b. Claims made or suits brought; defined in the underlying coverage to which "this coverage" applies, "we" will pay the same c. Persons or organizations making claims or suits. percentages of defense costs and/or damages as would otherwise be paid by the underlying 2. The amount of coverage stated as the aggregate coverage subject to the limits shown in the limit is the most "we" will pay for the sum of: Declarations for this covenant. a. Damages under SECTION I - LIABILITY 5. The limits of "this coverage" apply separately to COVERAGE; and each consecutive annual period and to any remaining period of less than 12 months, starting b. Defense expense for claims and suits seeking with the beginning of the coverage period shown in damages payable under a. above, except as the Declarations, unless the coverage period is provided in the Appeals Condition. extended after issuance for an additional period of less than 12 months. In that case, the additional Each payment "we" make for such damages or period will be deemed part of the last preceding defense expense reduces by the amount of the period for purposes of determining the limit of payment the aggregate limit. This reduced limit coverage. • will then be the amount of coverage available for further expenses and damages of these kinds. LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 3 of 8 SECTION III - DEFINITIONS • 1. Aggregate limit means the maximum amount stated (b) That portion of "our" employed attorney's in the covenant for which LMCIT will be liable, fees, salaries and expenses allocated to a regardless of the number of covered claims. specific claim or suit; and 2. Defense expense means payments allocated to a (c) The expenses described in(e) above. specific claim or suit for its investigation, settlement, or defense, including: (d) Fees and expenses of independent adjusters "we" hire. (a) Attorney fees and all other litigation expenses; 4. Occurrence means: (b) The cost of bonds to appeal a judgment or award in any suit "we" defend; a. With respect to bodily injury to persons other than "your" employees and property damage, (c) Up to $250 for the cost of bail bonds required an accident, including continuous or repeated because of accidents or traffic law violations exposure to substantially the same general arising out of the use of any vehicle to which harmful conditions; and bodily injury liability coverage provided by underlying coverage applies; b. With respect to bodily injury to "your" employees arising out of and in the course of (d) The cost of bonds to release attachments, but their employment by "you", the accident or only for bond amounts within the amount of disease which causes the bodily injury; and coverage available; c. With respect to personal injury liability, all (e) Reasonable expenses incurred by the covered personal injury arising out of a single offense party at "our" request to assist "us" in the or a series of related offenses of which the investigation or defense of the claim or suit, series of related offenses shall be deemed to including actual loss of earning up to $100 a have occurred when the first offense in such day because of time off from work; series occurred; or (f) Cost taxed against the covered party in the suit; d. With respect to errors or omissions injury, a negligent act, error, omission, or violation of (g) Interest on the full amount of any judgment that any rights, privileges, or immunities secured accrues after entry of the judgment and before by the Constitution and the laws of the United "we" have paid, offered to pay, or deposited in States of America or a series of related acts, court the amount available for the judgment errors, omissions, or violations of which the under the provisions of SECTION II-LIMITS series of related acts, errors, omissions, or OF COVERAGE. violations shall be deemed to have occurred when the first act,error, omission, or violation 3. Defense expense does not include: occurred. (a) Salaries and expenses of "our" employees or the covered party's employees, other than: • LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 4 of 8 5. Occurrence limit means any specific limit, other b. The same hazards covered, except as modified than an aggregate limit, applicable to any by general program revisions or as agreed to underlying coverage, regardless of whether such by "us" in writing; and limit is subject to an aggregate limit in the underlying coverage. c. The same retroactive date,if issued on a claims made basis. 6. Underlying coverage means the liability coverage provided under coverage agreements shown in the Underlying coverage also includes any extended Declarations, for the limits and period indicated. reporting periods on the policies shown in the It includes any coverage agreements issued to Declarations. It includes only coverage replace those coverage agreements during the term agreements shown in the Declarations or endorsed of this covenant that provide: onto this covenant. a. At least the same coverage limits; 7. Underlying carrier means any carrier who issues underlying coverage. SECTION IV - CONDITIONS If any of the following conditions are contrary to (1) How, when and where the occurrence conditions contained in the underlying coverage the took place; provisions contained in "this coverage" apply. (2) The names and addresses of any injured • 1. APPEALS person and witnesses; and In the event the underlying carrier elects not to (3) The nature and location of any injury or appeal a judgment in excess of the limits of the damage arising out of the occurrence. underlying coverage, "we" may elect to make Notice of an occurrence is not notice of a claim. such appeal. If"we"so elect, "we"shall be liable, in addition to the applicable amount of coverage, b. If a claim is received by any covered party for all defense expenses "we" incur. "you" must: 2. BANKRUPTCY OF UNDERLYING CARRIER (1) Immediately record the specifics of the claim and the date received; and In the event of bankruptcy or insolvency of any underlying carrier, the coverage afforded by this (2) Notify "us" as soon as practicable. covenant shall not replace such underlying coverage, but shall apply as if the underlying "You" must see to it that "we" receive written coverage was valid and collectible. notice of the claim as soon as practicable. 3. DUTIES IN THE EVENT OF OCCURRENCE, c. "You" and any other involved covered party CLAIM OR SUIT must: a. "You" must see to it that "we" are notified as (1) Immediately send "us" copies of any soon as practicable of an occurrence which demands, notices, summonses or legal may result in a claim to which "this coverage" papers received in connection with the • applies. To the extent possible, notice should claim or suit; include: (2) Authorize "us" to obtain records and other information; LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 5 of 8 and the underlying coverage is on a claims • (3) Cooperate with "us" in the investigation, made basis, "we" will: settlement or defense of the claim or suit; (a) Provide a basic extended reporting (4) Assist "us", upon "our" request, in the period; and enforcement of any right against any person or organization which may be (b) Offer a supplemental extended liable to the covered party because of reporting period endorsement,but only injury or damage to which"this coverage" if "you" obtain a similar endorsement may also apply; and for the underlying coverage, as provided in CONDITION 7 - (5) Notify "us" immediately of any judgment EXTENDED REPORTING PERIOD. or settlement of any claim or suit brought against any covered party. (3) If the retroactive date of any underlying coverage is changed, "we" may: d. No covered party will, except at its own cost, voluntarily make a payment, assume any (a) Cancel this covenant as of the effective obligation,or incur any expense,other than for date of the change in the retroactive first aid, without "our" consent. date; and (b) Offer to renew or rewrite this covenant 4. MAINTENANCE OF UNDERLYING with the same retroactive date as the COVERAGE underlying coverage. a. "You" agree to maintain the underlying c. Reduction or exhaustion of the aggregate limits . coverage in full force and effect during the of any underlying coverage by payments or term of this covenant and with respect to any judgments,settlements or defense expense will claims made underlying coverage, during any not be a failure to maintain underlying extended reporting period of this covenant,and coverage in full force and effect. to inform "us" within 30 days of any replacement of that underlying coverage by the d. No statement contained in this condition limits same or another company. "our" right to cancel or not renew this covenant. b. "You" must notify "us" immediately: 5. OTHER COVERAGE (1) Of any changes to the underlying coverage. "We" may adjust "our" premium "This coverage"is excess over any other valid and accordingly from the effective date of the collectible coverage whether primary, excess, change to the underlying coverage; contingent or any other basis, except other coverage written specifically to be excess over (2) If any underlying coverage is canceled or "this coverage". not renewed and not replaced, "we" will not be liable under this covenant for more 6. COVERAGE PERIOD than "we" would have been liable if that underlying coverage had not terminated. a. If the underlying coverage applies on a claims Except as provided in paragraph(3)below, made basis, "this coverage" will respond to "we" may cancel the portion of this injury or damage only if a claim for damages is covenant that applies to that underlying first received and recorded, in the manner coverage as of the date of termination of prescribed by the underlying coverage, during the underlying coverage. If "we" cancel, the coverage period of this covenant shown in LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 6 of 8 the Declarations, including any extended "You" must give "us" a written request for the reporting period applicable to this covenant, endorsement within 60 days after the end of the regardless of any extended reporting period coverage period. The supplemental extended applicable to underlying coverage. reporting period will not go into effect unless "you"pay the additional premium promptly when b. If the underlying coverage does not apply on a due. claims made basis, "this coverage" will respond to injury or damage that occurs or The additional premium for the supplemental arises from an offense committed, during the extended reporting period will be a percentage of coverage period of this covenant shown in the the annual expiring premium. Declarations. Number of Years Since Retroactive Date Shown on the Declarations Page Additional Cost 7. EXTENDED REPORTING PERIOD 1 50% With respect to coverage under this covenant that 2 70% is excess over underlying coverage which applies 3 80% on a claims made basis: 4 90% 5 100% a. LMCIT will provide one or more extended 5+ 100% reporting periods, as described below if: • d. Extended reporting periods do not extend the (1) SECTION I-LIABILITY COVERAGE is coverage period or change the scope of canceled or not renewed; or coverage provided. (2) LMCIT renews or replaces SECTION I - They apply only to claims: LIABILITY COVERAGE with coverage that: (1) For bodily injury or property damage which occurs before the end of the (a) Has a retroactive date later than the coverage period; date shown on the Declarations page; (2) For personal injury caused by an offense (b) Does not apply to bodily injury, which occurs before the end of the property damage, personal injury, or coverage period; or errors or omissions injury on a claims made basis. b. A basic extended reporting period of 60 days P gP Y from the end of the coverage period is automatically provided without additional charge. c. A supplemental extended reporting period of unlimited duration is available, but only by an • endorsement and for an extra charge. The supplemental extended reporting period starts 60 days after the end of the coverage period. LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 7 of 8 • (3) For errors or omissions injury caused by a negligent act, error, omission, or violation that occurs before the end of the coverage period; but not before the retroactive date shown in the Declarations. Claims for injury or damage which are first received and recorded during the basic extended reporting period (or during the supplemental extended reporting period, if it is in effect)will be deemed to have been made on the last day of the coverage period. Once in effect, extended reporting periods may not be canceled, unless underlying coverage is not maintained. e. Extended reporting periods do not reinstate or increase the limits of coverage applicable to any claim to which "this coverage" applies. • 8. NO WAIVER OF STATUTORY LIABILITY LIMITATIONS OR IMMUNITIES a. It is the express intent of the city and of LMCIT that the procurement of this covenant shall not waive any monetary limits of liability provided by Minnesota Statute 466.04, by any comparable or successor statute, or by common law, which may be applicable to any "covered party"; and that any previous waiver of liability limits is revoked to the extent that it may apply to claims covered under this covenant. 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". • LMCIT MELC(11/86)(Rev.12/95; 11/96; 11/97:11/98) Page 8 of 8 EXTENDED REPORTING PERIOD - LIMITED POLLUTION EXCEPTION With respect to Limited Pollution Coverage under this Covenant, which is excess over underlying coverage, the basic extended reporting period and the supplemental extended reporting periods under Section IV - Conditions are not available. • All other terms and conditions remain unchanged. • LMCIT UME-43 (01-95) Page 1 of 1 • EXTENDED REPORTING PERIOD - LAND USE LIABILITY EXCEPTION With respect to Land Use Liability Coverage under this Covenant, which is excess over underlying coverage, the basic extended reporting period and the supplemental extended reporting periods under Section IV - Conditions are not available. • All other terms and conditions remain unchanged. • LMCIT UME-46 (01-95) Page 1 of 1 • UNINSURED/UNDERINSURED MOTORISTS - FOLLOW FORM It is agreed 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. 11-99) Page 1 of 1 • MUNICIPAL EXCESS LIABILITY COVERAGE WAIVER OF STATUTORY LIABILITY LIMITATIONS ENDORSEMENT in consideration of the additional premium paid by the city, Section IV- Conditions, para. 8, is deleted and is replaced by the following: 8. 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. • UME-47 111/97) Agreement Number: AGREEMENT DECLARATIONS OML- 1744 Open Meeting Law Defense Cost Reimbursement Agreement Previous Agreement Is Provided By: Number: THE LEAGUE OF MINNESOTA CITIES INSURANCE TRUST •OML- 1437 (Herein called LMCIT) League of Minnesota Cities Cities promoting excellence Item 1. COVERED PARTY and MAILING ADDRESS: "CLAIMS-MADE" OAK PARK HEIGHTS, CITY OF P.O. BOX 2007 STILLWATER, MN 55082-2007 Item 2. AGREEMENT TERM: 12:01 AM Standard Time at Mailing Address Indicated Above. From: 07/07/00 To: 07/07/01 Item 3. RETROACTIVE DATE: 1 1/9/94 Item 4. 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. Item 6. CHARGE: $600. Item 7. FORMS AND ENDORSEMENTS APPLICABLE TO AGREEMENT: OMLRA-1 (1 1-99), OML-001 (11-97), ME063(1 1-95) Afi\ • Executive Director, LMCIT LMCIT DEC-019(11-93)(Rev.11/99) Administered by:Berkley Risk Administrators Company,LLC II/ OPEN MEETING LAW DEFENSE COST REIMBURSEMENT AGREEMENT I. OPEN MEETING LAW DEFENSE seeking penalties based upon an alleged violation COST COVERAGE of the Minnesota Open Meeting Law; however, LMCIT shall have the right to intervene at its LMCIT will reimburse a city official for 80 percent expense in the investigation or defense of such of the defense costs incurred by the city official in legal action. defending an Open Meeting Law lawsuit, if the following conditions are met: 3. The city or the city official shall give prompt notice to LMCIT of any actual or 1. The date on which the Open Meeting Law threatened legal action against the city lawsuit is commenced must be within the official seeking penalties against the city term of this agreement; and official for an alleged violation of the Minnesota Open Meeting Law. 2. The date on which the violation took place or is alleged to have taken place must be 4. The city and the city official shall at all on or after the retroactive date, if any, times cooperate with and promptly shown in the Declarations. respond to LMCIT's requests for information,investigative data,records,or An Open Meeting Law lawsuit is deemed to be any other material documentation. commenced on the date the city official is served notice of the lawsuit. 5. The city official will be reimbursed only • for defense costs incurred with respect to legal services actually rendered and II. LIMITS expenses actually incurred. The Open Meeting Law Defense Cost 6. The city official shall have complete Reimbursement Agreement Limit is$50,000. This freedom to choose an attorney licensed in is the most LMCIT will reimburse any one city the State of Minnesota to provide the city official for defense costs for Open Meeting Law official with legal services with respect to lawsuits commenced during the term of this which defense costs are reimbursable agreement, regardless of the number of lawsuits, under this Agreement. the number of actual or alleged violations, or the date the defense costs are actually incurred. 7. It is the express intent of the parties to this Agreement that neither the city nor the city official waive any immunities, defenses, III. CONDITIONS AND EXCLUSIONS or limitations on liability available under Minnesota statutes or common law. 1. The term of this Agreement shall be one year beginning with the effective date 8. In the event that a city official makes a stated in the Declarations. Subsequent recovery of defense costs from any third renewals of this Agreement shall be party,LMCIT shall be reimbursedf for any treated as separate terms. payment it has made under this Agreement after the city official has been fully 2. LMCIT shall have no duty to provide a reimbursed for his/her 20% share of the defense to a city official with respect to a defense costs. • legal action against that city official LMCIT OMLRA-1 (11-93)(Rev. 11-99) 1 of 2 OPEN MEETING LAW DEFENSE COST • REIMBURSEMENT AGREEMENT REIMBURSEMENT PARTICIPATION ENDORSEMENT It is understood and agreed that Section 1. Open Meeting Law Defense Cost Coverage is amended to modify the percentage of reimbursement of "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. 0 • LMCIT ME063(11/95) million for UM/UIM, the savings from reducing the limit is about$10 per vehicle. If the city also has excess coverage and has chosen to have the excess also apply to UM/UIM, the savings from dropping that coverage from the excess would be about 5% of the underlying primary liability premium. 2. Drop the medical payments coverage. The"medical payments"coverage(Coverage B of the LMCIT liability coverage)provides a limited amount($1000) of no-fault coverage for medical treatment for those injured on city property because of a condition in the property. The medical payments coverage really only comes into play in situations where the city is not legally liable for the injury. (If the city is legally liable for the injury, it will be covered as a liability claim.)In many cases, the medical payments coverage is really just paying costs that would otherwise be covered by the individual's own health insurance or by Medicare. Deleting the medical payments coverage will reduce premiums 1%. 3. Retain more risk A surprising number of cities still have property/casualty deductibles as low as $250 or$500. For most cities, a deductible of at least$1000, $2500, or$5000 will make more sense economically. Cities should consider the medical deductible options on work comp as well. While there are obviously no guarantees,the premium savings over time should normally be more than enough to cover the additiona 1 risk the city is retaining. Of course, the city needs to make sure that reserve funds are available to cover a reasonable number of deductibles during the year. For mid-sized and larger cities, an aggregate deductible approach often makes a lot of sense for the property/casualty coverage. Under this approach,the city retains a substantial deductible,but the city's maximum cost per year is capped at a specific dollar amount. (E.g., the city is responsible for the first$10,000 of each loss, but for no more than a maximum of$20,000 for the year. A much smaller"maintenance" deductible then applies to subsequent claims.) This gives the city a way to reduce premiums significantly by retaining a substantial amount of risk,but the maximum amount of risk the city retains is a known amount that can be planned for and budgeted. The "retro-rating"option offers a similar alternative on work comp, for cities with standard premiums of$25,000 or more. 4. Don't waive the statutory liability limits. LMCIT gives the city the option of whether or not to waive the statutory liability limits. Liability coverage is more expensive if the city waives the limits; the cost difference is 3.5%. Waiving the limits does not give the city any better protection; the benefit is to the party who is making a liability claim against the city. The LMCIT memo"LMCIT liability coverage options: liability limits, coverage limits, and waivers" discusses this in more detail. 5. Make sure you're not purchasing unnecessary "specialty"liability policies. We don't see this very often any more,but there could still be instances where cities are purchasing specialty insurance policies from private insurance companies for risks that the city's LMCIT liability coverage already covers. If your city is buying any of 4 the following as a separate policy, you should carefully review why you're doing so: police liability,employment practices liability, employee benefit liability, firefighters professional liability,public officials liability(sometimes called"errors and omissions"), fiduciary liability for relief associations, or ambulance professional liability. 6. Make sure you're not buying duplicate bond coverage. The LMCIT bond coverage is designed to meet all of the city's needs for bond coverage on public officials. If your city has the LMCIT faithful performance bond coverage, you don't need also to purchase separate bonds to meet the statutory requirements for the city clerk and treasurer, the relief association treasurer, etc. If g an or port re covering EDA ort Y authority, the LMCIT bond can be used to meet the requirements for the EDA or port authority treasurer's bond as well. It also covers the gambling manager for relief associations that are operating charitable gambling. 7. Drop physical damage coverage on older low-value vehicles. LMCIT automatically provides physical damage coverage on all city vehicles unless the city specifically opts not to cover specific vehicles. If you have some older, relatively low-value vehicles that are not critical to the city's operations,you could consider deleting them from the physical damage coverage. 8. Drop the optional no-fault sewer back-up coverage. The optional no-fault sewer back-up coverage reimburses homeowners for damages caused by sewer back-up irrespective of whether the city was negligent and legally liable. While many cities feel this is a valuable added benefit for citizens, it could be an option to consider eliminating during tight budget times. The cost is 8.5%of the liability premium. 9. Rented buildin g s. When the city ty leases a city-owned b ildin to a private party, lease agreement may require the renter to insure the building. We occasionally see situations where the city nevertheless also schedules the building under the city's property coverage as well, in order to protect the city in case of any problem with the tenant's insurance. If you have a building leased out and the tenant is insuring it,if you have assurance that the tenant has the needed insurance and that that insurance protects the city's interest, you could drop that building from the city's coverage. (Of course, you'd have to make sure to remember to add it back if the lease were terminated, or the tenant lost his coverage, etc.) One obvious idea for reducing premiums is to reduce coverage limits; e.g., dropping the optional excess liability coverage; reducing the bond limit; reducing the liquor liability coverage limit for cities involved in beer or liquor sales; etc. However, we'd urge cities to consider very carefully before taking any of these steps, and to look first at some of the other suggestions outlined above. Reducing coverage limits means that the city is retaining the risk of the large loss that the higher limits would have covered. Financially it makes more sense to retain the risk of 5