The following coverage changes apply for coverages renewing on or after Jan. 1, 2025, and are provided at a summary level. Coverage and limitations are ultimately determined by the terms of the coverage agreements.

Material coverage changes

Law enforcement liability assumed in a contract — municipal liability limits (municipal liability coverage)

There will be coverage and pricing changes where:

  1. An LMCIT member contracts with a non-LMCIT member law enforcement agency for law enforcement services.
  2. The contract obligates the LMCIT member to defend and indemnify the providing agency for claims arising out of the providing agency’s acts.

For the coverage change, there will be a new $200,000 aggregate sub-limit for claims for which the member is obligated to defend or indemnify a non-LMCIT member law enforcement service provider for claims arising out of the service provider’s acts under the terms of a law enforcement service contract. This only applies for a service agreement, not mutual aid agreements or agreements that create a joint powers entity.

If LMCIT evaluates the contract and feels comfortable with the risk, LMCIT may remove the aggregate sublimit by endorsement and make an appropriate premium charge (1.5 times the normal charge for law enforcement liability exposures). For members that purchase excess liability coverage, LMCIT will only offer up to $3 million in excess liability limits for members that assume the liability of a non-LMCIT law enforcement agency.

These changes are intended to allow LMCIT to appropriately review, discuss, mitigate, and price risks in these situations.

Other municipal liability assumed in contracts (municipal liability coverage)

There will be a slight narrowing of coverage for liability of another party that a member assumes in a contract. Coverage will explicitly exclude:

  1. The part of any contract that indemnifies another party for anticipated or expected damages.
  2. The part of any contract that is contrary to state law.

The first is intended to prevent coverage in a situation, for example, in which a member enters into a construction project contract and the member and contractor have knowledge the construction, demolition, or excavation will cause damage to a third party’s property, like a building that’s adjacent to the construction project. The second is intended to allow the member and LMCIT to assert protection under state law if, for example, there’s a statute that prohibits the transfer of risk onto a city.

Vacant buildings (property coverage) 

Property damage caused by continuous or repeated leakage or seepage of water in a vacant building over a period of 14 days or more will be excluded from coverage. LMCIT’s underwriting and loss control guidelines for vacant buildings specify members should physically visit and inspect the inside of vacant buildings at least every 14 days to check on heating systems, rodent or pest infestation, squatters, roof and water leaks, etc. If guidelines are being followed the exclusion would not be triggered. There will also be a maximum limit of $500,000 for damage to vacant buildings, but that can be increased if proper risk mitigation factors have been implemented in consultation with LMCIT.

Police dog limits and valuations (property coverage) 

If a police dog is injured and unable to perform normal duties, the property coverage has been clarified that it will cover the cost to replace the dog, the cost for necessary training, and handler expenses. Handler expenses will be defined as salary and benefits that exceed normal work schedule, food, fuel, and lodging during training. The limit of coverage will depreciate based on the age of the injured dog.

Metal roofing copay (property coverage) 

The property coverage currently includes a 30% copay for aesthetic impairment to metal roofing. The definition of “metal roofing” for the purposes of the copay will include any roofing system or components of a roofing system, such as metal panels, metal flashing, or any other undamaged roofing material that needs to be replaced in order to repair the damaged metal components.

Clarifying coverage changes

Auto towing, storage, and teardown costs (auto physical damage coverage)

Language will be clarified to specify that LMCIT will pay costs for towing, storing, and teardown in addition to the coverage limit.

Auto liability assumed in a contract (auto liability coverage)

Language will be clarified that LMCIT’s intent is not to provide coverage automatically for claims arising out of an auto that is neither owned nor operated by an LMCIT member. LMCIT can, however, review these scenarios on a case-by-case basis to determine whether LMCIT can provide coverage. (This same clarification will be made to LMCIT’s municipal liability coverage.)

Cannabis dispensaries (crime coverage)

An exclusion will be added for loss or damage at or from a cannabis dispensary. This exclusion mirrors an exclusion that was added to the property coverage last year.

First-party cyber claim trigger (first-party cyber coverage)

The claim trigger wording will be modified to reflect a more traditional “claims made” basis. The coverage change will not result in a material change for members. (Claims-made basis means that the policy in force when the claim is made is the policy that responds. This differs from an “occurrence” basis, in which the policy in force when the occurrence that gave rise to the claim is the policy that responds.)

Professional engineering services assumed in contract (liability coverage)

Coverage structure will be simplified by relocating an exclusion for damages arising out of professional services provided by contracted engineers and surveyors from the “covered contract” definition and moving it to the standard professional services exclusion.

Pollutant exposure wording (liability coverage)

A clarification will be made to the pollution exposure wording in the “products hazard” and “limited contamination liability claim” definitions so it matches the standard pollution exclusion. There is also a redundant pollution claim exclusion in the definition of “damages” that will be removed.

Sexual abuse and molestation claims (liability coverage) 

Wording will be strengthened to prevent the stacking of limits for claims arising out of the same related cause or common perpetrator, or over multiple coverage terms.

Reverse incarceration claims (liability coverage)

Wording will be strengthened to reflect the existing intent that the $2 million municipal liability limit applies to claims for any wrongful acts or series of related wrongful acts contributing to wrongful arrest, detention, imprisonment, prosecution, or conviction.

Cannabis sales (liability coverage)

Language will clarify that the exception to the cannabis sales exclusion applies for low potency edible cannabinoid products sold at both on and off sale liquor stores.

Insect damage to plants exclusion (property coverage)

The existing exclusion for damage caused by decay, deterioration, disease, or pathogen to plants or trees will be clarified to confirm that damage to plants caused by insects such as emerald ash borer are not covered.

Mobile property endorsement (property coverage)

There is an endorsement used to specify which mobile property a member intends to cover and which limits apply. The definition of “mobile property” will be posted at the top of the endorsement so it’s easier to interpret at a quick glance.

Cyber/war exclusions (property coverage)

There is a broad cyber exclusion in the property coverage, but there is a narrow exception to the exclusion for resulting fire, explosion, or water damage. Wording is added to clarify the exception to the exclusion does not apply if the damage is caused by any action undertaken by or on behalf of a foreign sovereign state.

Underground wiring (property coverage)

The existing exclusion for electric power transmission and distribution lines will add a definition of transmission and distribution lines and clarify the exclusion applies regardless of whether the lines are above or below ground.

Underground piping at swimming pools (property coverage)

The property coverage contains a general exclusion for underground and buried pipes, but there is an exception to the exclusion for pipes that are part of a water or wastewater treatment plant, lift station, or part of a geothermal heating and cooling system. An additional exception will be added for underground pipes that are part of a swimming pool or splash pad.

Electric generation and substation locations (property coverage)

There are two clean-up changes for special endorsements used to modify property coverage for electric generation and distribution facilities. For the endorsement LMCIT uses for substation locations, an irrelevant clause will be removed that applies to internal combustion engines, which don’t exist at substations. For endorsements used for generation facilities and substation locations, wording related to arcing and mechanical breakdown perils and damage to computer equipment and electronic data will be clarified.

Cannabis sales (optional liquor liability coverage)

Coverage will be clarified to state that LMCIT’s optional liquor liability coverage only applies to the sale of low potency cannabinoid products sold from liquor on and off sale stores, not the sale of high-potency products or the marijuana flower.