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City boosts liability insurance with $7M policy

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Concerned about potential legal exposure for a range of reasons across its services, Carroll City Council members have upped the city’s liability coverage from $5 million to $7 million.

The boost in coverage will cost the city $2,803 per year more under an arrangement with Mid-Iowa Insurance & Real Estate and the Iowa Communities Assurance Pool.

“I’d rather play it safe,” Councilwoman Carolyn Siemann said.

The city’s total property and liability insurance costs will stand at $258,956 per year as of July 1. The city’s property, building equipment and vehicles are valued at $94 million, according to city officials.

Council members Monday night voted 5-1 to increase the liability coverage, with Councilman Clay Haley dissenting. He thought a figure of $6 million made more sense, as he noted the city has not had a history of large claims.

Councilman Mike Kots proposed the $7 million plan after city officials reviewed an insurance report.

In some larger cities around the nation, families of victims of police shootings or violence have filed large claims, said Terry Axman, an owner and insurance agent with Mid-Iowa.

While Axman and Haley pointed out that Carroll has had no such issues, the high-profile multi-million-dollar settlements in Minneapolis and Louisville following police shootings, for example, spotlight the financial risks cities carry in functions for public safety, transportation infrastructure and other services.

“The potential does exist,” Axman said.

Siemann said the additional coverage makes sense for broader reasons, and she noted that the city has not talked about liability insurance in the last decade.

“$1,400 (a year for a million dollars more in coverage) is cheap compared to what we’d have to get out of our pockets,” Siemann said.

If the city lost a liability case or settled for more than $7 million, it would have to make up the difference with higher taxes or decreases in services, city officials said.

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