Afton lawsuits lead to higher premiums

Talk about it

The longer-term cost of Afton’s string of lawsuits is beginning to bite.

At a city council workshop held Monday, Aug. 4, a representative of the city’s insurance agent told the meeting the city’s premium would be going up from a total of $16,458 in 2007/08 to $23,276 in 2008/09.

Mark Lenz, who works for St. Paul-based T. C. Fields, explained that the majority of the increase ($5,158) was down to the number of lawsuits which had been filed against the city over the past year.

“The city has been involved in a number of lawsuits — I know some have been settled, but some are still in process,” he said. “That’s the main reason for your increase.”

He explained that the insurance company reviewed a city for risk based on its record for the past three years, on a rolling basis.

“So it will take several years of no lawsuits for that [cost] to go back down, is that what you are saying?” asked council member Joe Richter.

“If you continue to have a material number of lawsuits as you have in the past, I would agree,” responded Lenz. “But if you don’t, it will go down.”

He explained the city had the option to purchase excess liability if it wished — $2 million excess for the annual premium of $4,069 up to $5 million excess for the cost of $8,569.

Lenz added that once items such as workers’ compensation and volunteer accident plan were taken out of the equation, the direct comparison for the city’s insurance premiums for 2007 and 2008 worked out at $12,574 and $20,682.

Afton was filed with seven lawsuits last year, most centering around land use and ordinance litigation.

Two remain outstanding; the rest have been either dropped or settled.

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