HomeMy WebLinkAboutMMIA Memo Liability CoverageMontana Municipal Insurance Authority
MEMORANDUM
BOB WORTHINGT
DATE: January 10, 2004
RE: Coverage Endorsement - MMIA Memorandum of Liability Coversge
The Board of Directors of the Montana Municipal Insurance Authority (MMIA), at a meeting held
December 19, 2003, elected to amend, by way of an endorsement, the coverage afforded its
Members pursuant to the Memorandum of Liability Coverage (Memorandum).
The Memorandum, dated July 1, 2002, contains a number of exclusions which limit the MMIA's
duties to indemnify and defend with respect to matters which may generally be described as
relating to land use, zoning, condemnation, inverse condemnation, or similar activities by local
governments, zoning boards, boards of adjustment, or planning boards. See, in par[icular
Exclusion No. 14 to the Memorendnm. These exclusions, in various forms, have been in place
since the Prog?am was created in 1986.
Risk pools generally have excluded coverage for such land use exposures because (1) these
claims frequently do not involve sudden, accidental or unintended actions of a government, and
(2) the losses often represent significant financial exposure to the organization. As the MMIA
has gained experience in these matters, the magnitude of these land use exposures and actions
has become obvious.
The MMIA Board and staff have been working t0 address these matters. We are Pleased t0
provide the attached "Endorsement for Land Use Liability." This Endorsement is effective as of
January 1, 2004 and expands the coverage afforded under the Memorandum. The
Endorsement states: "The Authority agrees to provide defense cost only coverage for the Entity
... adsing out of Wrongful Land Use Practices, as defined..."
The MMIA will now provide defense cost only coverage for those land use claims which
other~Nise are excluded from coverage under the Memorandum. It is important to note that
under this Endorsement the MMIA will not provide indemnity coverage for settlements or
damages payable as a result of a claim that is determined to fall within the existing exclusions.
In addition, this Endorsement does not affect coverage with respect to existing claims or lawsuits
falling within an applicable exclusion or with respect to claims made on or after January 1,2004
for events which occurred prior to January 1, 2004. In order to obtain coverage under this
Endorsement, the claim must be for an Occurrence, as defined in the Memorandum, after
December 31, 2003.
Please attach this Endorsement to your copy of the current Memorandum of Liability Coverage
dated July 1, 2002. If you do not have a copy of the Memorandum, please let us know. We will
send one.
All claim matters should promptly be forwarded to our office for a determination of coverage.
Please include date of loss and as much information as you can. Again, the endorsement is
effective as of January 1,2004 and covers the remainder of the current policy year ending June
30, 2004. With the commencement of the new policy year, subsequent documentation will be
'issued addressing this matter.
If you have any questions regarding this matter, please call me at 800-635-3089.
O:\BWor~hington\Bob',Liablii[~Land Use Coverage memo.011004.d=c
P.O. Box 6669, Helena, Montana 59604-6669 (406) 443-0907 In MT: 1-800-635-3089 Fax (406) 449-7440
ENDORSEMENT FOR LAND USE LIABILITY
UNDER THE
MEMORANDUM OF LIABILITY COVERAGE
DATED JULY 1, 2002
The Montana Municipal Insurance Authority (Authority) agrees to provide defense cost
only coverage for the Entity named below arising out of Wrongful Land Use Practices, as
defined below, and to pay on behalf of the Entity as follows:
Subject to the LIMITS OF LIABILITY, COVERAGE, DEFINITIONS, EXCLUSIONS,
CONDITIONS and other terms of the Memorandum of Liability Coverage (Memorandum), the
Authority agrees to pay on behalf of the Entity all reasonable and necessary Defense Costs, as
defined in the Memorandum of Liability Coverage, on behalf of the Entity in the defense of a
Wrongful Land Use claim caused by an Occurrence, as defined in the Memorandum, during the
effective period of this endorsement as specified below. This Endorsement shall not be
construed to require the MMIA to pay any loss ow damages other than Defense COsts in
connection with any Wrongful Land Use claim.
Wrongful Land Use Practices means actual or alleged liability, including property damage or
diminution of property value, arising out of, or based upon, the principles of eminent domain,
condemnation, inverse condemnation, land use regulation, precondemnation activities, intedm
takings, takings, down-zoning, zoning, general planning regulations, easements, nuisance, or
annexation, including deprivation of constitutional or civil rights related thereto, regardless of
whether such claims are made directly against the Entity or pursuant to an agreement entered
into by, or on behalf of, the Entity.
EXCLUSIONS:
The following are not covered by this endorsement:
A. Any claim arising from an actual or alleged procedural defect in the decision
making process employed by the Covered Party.
B. Any claim resulting from acts which are covered under the Memorandum or any
other policy or endorsement issued by the MMIA.
The Entity designated below understands that this Endorsement for Land Use Liability Coverage
is for Defense Costs only, and any damages, settlement or judgment reached in a claim under
this endorsement is the. sole responsibility of the EntEy; ·
This endorsement for Land Use Liability Coverage as set forth above is effective as of
12:01 am MST on the 1st day of January 2004, and shall continue in full force and effect until
11:59 pm MDT on the 30m day of June 2004.
DATE: January 16, 2004
ENTITY: City of Laurel
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ONTANA MUNICIPAL INSURANOE AUT- C[,t~ TY
O:~BWorthington\SobU.labilit3ALiability
. ti JAN 20 2004
CITY OF LAUREL