City buys extra liquor liability insurance

When the Princeton City Council renewed its city insurance this year, it paid an extra premium so that it could have more liquor liability insurance coverage.

The extra premium was $900. Combining that with the $908 premium increase for the rest of the city’s liability coverage, the city’s total premium increase for this insurance year is $1,808.

The city insures through the League of Minnesota Cities insurance trust and Princeton Insurance Agency agent Rollie Natvig handled the transaction. Natvig made a presentation on the insurance contract to the council this past Aug. 2, at which time the council approved the renewal retroactive to July 1, 2012.

The total premium in the last contract year was $111,482. This year it will be $113,290, when including the $900 for excess liquor liability coverage. Without that extra premium, the total insurance coverage for a liquor liability claim would have been $1 million. With the extra $900 premium, the city will be covered for $2 million for a liquor liability claim.

Council members agreed that the extra $900 was worth the cost for the additional liquor liability coverage.

Natvig explained that the state doesn’t cap how much a person can sue a city in a liquor liability case, so if a court awarded a liquor liability claimant an amount more than the city’s insurance coverage, the city would have to come up with the extra money.

This is the first year that the League of Minnesota Cities offered the option of paying an extra premium just for extra liquor liability coverage, Natvig says.

The council did opt to not pay an extra $11,720 premium for raising the amount of coverage for general liability claims. State statute allows a person to sue a city for up to $500,000 for a general liability occurrence, and puts a cap of $1.5 million on what the city can be sued through multiple claims for one occurrence. The extra premium would have set the cap for multiple claims at $2.5 million for an occurrence.

The council also passed a motion not to waive the $500,000 cap on what one person can sue for each general liability occurrence.