Sewer backup claims comprise a significant portion of liability costs for cities and the League of Minnesota Cities Insurance Trust (LMCIT).
In order to better understand how to prevent sewer claims, LMCIT conducted an analysis of sewer backup claims.
The most common reason for sewer backups was an obstruction in the sewer line. City liability often stemmed from maintenance and inspection issues. In addition, claims related to costly lift station design and construction problems also are costly.
The Sanitary Sewer Incentive program for Property/Casualty members provides cities greater control in the mandatory, out-of-pocket deductibles they pay for claims and lawsuits related to sanitary sewer backups.
The program is meant to reduce the overall cost and frequency of sanitary sewer claims faced by members of the Trust, as well as to reduce the extent to which cities with good sanitary sewer operations and maintenance practices end up helping to pay for losses of cities with practices that aren’t so good.
Members of the Property/Casualty program must meet four criteria to qualify. Members that do not meet the criteria have a minimum mandatory deductible of $1,000 for each sanitary sewer backup claim. That amount will increase to $2,500 for each sanitary sewer backup claim.
Learn how to prevent paying a higher deductible by checking out these resources:
But even more surprising, perhaps, were the causes that did not rise to the top of the list: Weather related incidents like extraordinary rainfall or lift station failure due to weather events were not a major cause of sewer backups.
While aging infrastructure is an ongoing concern for cities throughout the state, physical condition of the sewer line was not quite as notable a cause of sewer backups as anticipated.