A person LMCIT members contract with for consultation on insurance and risk management matters and for assistance with purchasing or renewing coverage. The property/casualty and workers’ compensation programs are designed to operate through a licensed insurance agent. Agents are required for the property/casualty program and are optional for the workers’ compensation program. The selection of the agent is the responsibility of the member.


The maximum amount LMCIT will pay during a member’s annual coverage period. As it relates to the general annual aggregate deductible, this is the maximum amount the city is responsible for during a coverage period before the maintenance deductible applies to each loss.


  1. A purchased contract between LMCIT and a member that ensures coverage will be provided by LMCIT for a specified cost and period of time (also referred to as a “covenant” or “policy”).
  2. Also used as a general term when reaching a resolution or an understanding of what each party is responsible for or will agree to do.


A formal request made to LMCIT for coverage or compensation for a covered loss. Claims are usually filed by LMCIT members.

Claims adjuster

Person designated to investigate the validity of a claim and, if the claim is valid, assess a recommended amount to be paid for damages or losses. Claims adjusters may also be known as claims examiners, claims handlers, or claims representatives.


Can be used as shorthand for “coverage agreement” but can also mean the components of LMCIT’s agreements that provide benefits or payment by LMCIT to members or third parties.


Portion of the loss the member is responsible for paying. (Larger deductibles can be selected in exchange for up-front premium credits.)


Amount of money returned to members annually if it’s determined that LMCIT is holding more funds than it needs.


The potential risk experienced by members of LMCIT.


  1. When referring to workers’ compensation, indemnity is payment made to an injured employee whose injury occurred as a result of employment (sometimes referred to as lost-time or wage loss benefits).
  2. When referring to property/casualty, indemnity is payment made that compensates a party for damages or losses.


See “agreement.”

Insurance pool

A group of similar members that form a shared risk pool to reduce their overall risk and secure better premiums and coverage plans.


Responsibility for wrongful acts, damages, and losses that might prompt the filing of a claim or lawsuit. Liability coverage generally provides for monetary damage a member becomes legally obligated to pay to a third party as a result of a negligent act or omission.


Active use of the court system in an effort to collect damages for a loss.


The League of Minnesota Cities Insurance Trust, a self-insured membership cooperative created by Minnesota cities for Minnesota cities to cover city risks and mitigate hazards. (Also known as “the Trust.”)

Loss control

Training and services to prevent claims before they occur.


Minnesota cities and other public entities that obtain their coverage through LMCIT.


Deliberate or preventable action that could result in the filing of a claim or a lawsuit. (Typically, a breach of a duty of care.)


See “agreement.”


Amount paid by member to LMCIT for coverage.

Property/casualty coverage

Includes coverage for liability, loss of property, and automobile damages.


The price used to calculate member premiums. Generally, the rate is applied to an exposure measure to calculate the premium. For example, for employment practices liability, if the rate is $150 per employee and the member has 10 employees, the resulting premium would be $1,500.


Insurance purchased by LMCIT to help cover costs for large claims or a large aggregation of claims experienced by members.


The chance that losses or damages could occur in any given area. See also “loss control.”

Risk management

Mitigating losses through preventive measures, such as loss control programs.


Mutual agreement between two or more parties to resolve a claim. Can involve a financial payment, non-financial terms, or both.


The maximum amount LMCIT will pay for a specific type of loss. It will either be within or in addition to the aggregate limit.


Evaluate and accept or decline risk on behalf of the Trust; price the risk; and specify the terms for which the risk is transferred.

Workers’ compensation coverage

Coverage for employees injured while in the course and scope of employment.