Government agencies help our families, children, elderly and special needs populations through transportation, counseling, medical, educational, and other services. That requires lots of buildings and equipment and puts both the entities and their employees at risk for all sorts of liability claims. Public entity insurance is a flexible solution that protects taxpayer dollars from massive losses. Here are some of the most essential coverages public agencies, utilities, and services should carry.
Liability insurance for public entities
Although there are many kinds of liability insurance, each addressing a particular type of risk — personal injury, environmental damage, or wrongful employment practices, for example — they all have one thing in common: they help cover legal defense and the money you must pay out to compensate the injured party. Here are some of the most common liability policies public entities need to consider.
General liability insurance for public entities
General liability insurance is the foundational liability policy. It covers injuries sustained by visitors on your premises, such as slips and falls due to a slick entryway, and accidental damage done elsewhere by employees during the course of their work, such as dropping a branch on a vehicle while trimming public trees.
Employment practices liability insurance for public entities
Employees have the right to demand proper treatment at work. If they feel they’ve been harassed, discriminated against, cheated out of a promotion or job hire, or wrongfully fired, they can bring an employment practices complaint and ask for money to make up for their financial loss. They can also ask for punitive damages. These kinds of complaints often turn into expensive lawsuits or regulatory actions. Employment practices liability insurance will help with the standard legal and settlement costs as well as regulatory investigation expenses.
Abuse and molestation insurance for public entities
One of the most difficult risks to discuss is abuse and molestation, but it is a significant exposure for schools, public healthcare agencies, police and other organizations, especially those dealing with youth, the elderly, and other vulnerable populations. An abuse and molestation insurance policy covers a wide variety of claims, often including verbal abuse, physical aggression or sexual assault, that result in some kind of financial need, such as legal defense costs or reparation to the victim. In some cases, the policy can also cover the medical treatment of a victim. It may be possible to add abuse and molestation coverage to your general liability insurance as an endorsement, but it might be better to get the higher coverage offered under a stand-alone policy. Talk to your insurance agent or broker about the pros and cons of each option.
Law enforcement liability insurance for public entities
Police forces are not the only public agencies that have law enforcement liability concerns. Correctional officers, fish and game wardens, court bailiffs, park rangers, and others may have similar liability risks. Coverage varies across insurers but often includes claims an officer acted abusively, failed to provide necessary first aid, was negligent in securing the crime scene, or failed to preserve or forward evidence, among other actions. The coverage is meant to protect both the public entity and law enforcement personnel, but the record shows that individuals in law enforcement positions are frequently accused of or investigated for wrongdoing by their own agency. That is why individual law enforcement liability insurance may be a good idea for officers of applicable agencies. Individual policies may be available through unions or associations as well as on the private market. In some cases, agencies will reimburse a certain amount of the cost of the coverage. Both kinds of policies typically also provide coverage for approved off-duty activities, such as moonlighting.
As towns are getting more involved in sponsoring local events and concerts, there may be a need for liquor liability insurance. The exposures that cities can face relate to issuing liquor licenses and operating events where liquor is served.
Professional liability insurance for public entities
Public employees outside of law enforcement roles also need professional liability protection. This may include county or state medical staff, mental health service providers, child welfare departments, public benefits or housing placement administrators, state and municipal lawyers and legal staff, firefighters, emergency medical technicians (EMTs) and many others.
Failure to perform duties within the standards of their profession as well as negligence and errors can lead to claims of injury, property damage or financial loss. A professional liability policy will help the agency cover legal bills and compensation for the plaintiff if necessary, and it often will help pay for investigation expenses.
As with law enforcement liability insurance, professionals working for a public entity are encouraged to consider individual professional liability insurance in case their organization’s coverage doesn’t extend to certain allegations of errors and omissions or malpractice. These policies often are sold specific to the job description of the employee, for example, firefighter’s professional liability or social worker liability insurance.
Public official liability insurance for public entities
Elected and appointed public officials face an increasingly polarized and litigious society. Claims of oversight failures, improper records management, mishandled land acquisition agreements, public misstatements, and wrongful employment practices are only a smattering of the risks they face. Public officials liability insurance helps with not only defense costs and victim compensation but also crisis management. It can insure both the public entity and the official.
While your organization may carry public officials or public entity liability insurance, you may wish to ask your insurance agent about an individual policy that can step in if your agency’s policy doesn’t cover you adequately or provide you with personal legal counsel. Ask your insurance agent for help reviewing documents that detail your agency’s duty to defend you and its coverage dollar limits. If gaps are discovered, you may wish to enhance your protection with an individual policy.
Environmental or pollution liability for public entities
Several governmental and public agencies have environmental risks, among them water authorities, municipal landfills, housing agencies, and public health clinics. Public entity pollution insurance can insure these risks through public entity premises pollution liability or public entity contractors pollution liability. Incidents can include failed sewer maintenance or water treatment, wrongful use of pesticides or herbicides, poor maintenance or diligence at public disposal centers (dumps), and zoning or road approvals that cause environmental damage, among others. For protection against the costs of fuel or chemical tank leakage, public entity underground storage tank insurance may be a solution. Typical coverage options include legal defense, cleanup, restoration, public relations, and investigation costs.
Student accident insurance for public entities
Government-run schools often sponsor student activities, including sports, theater, music and science events, that carry hazards to student health. Even playground injuries are a risk.
A student accident insurance policy can help with medical payments and other costs associated with a student injury or even death during school events. These may also be written to cover students who travel off campus for school-associated activities such as science fairs, field trips, and sporting competitions. If your school is sponsoring foreign-exchange programs, talk to your insurance agent or broker about making sure your students overseas, as well as visiting students to your campus, are insured. After-school care programs and summer camps should also be discussed if you offer those.
In a similar vein, educators legal liability insurance was created to protect the school district and its employees arising from claims of educational malpractice, including special education, as well as acts related to student discipline and other related exposures.
Employee benefits liability insurance for public entities
Public entity employees rely on the competent administration of their employee benefits, but mistakes sometimes happen. When they do, employees may find they have lost out on significant retirement earnings or are on the hook for costly medical bills. At that point, they will likely file a complaint against your organization for the expenses or losses associated with whatever mistake was made — maybe a failure by your benefits staff to update a policy with a new spouse or child, an error in submitting a participant’s application, or negligence in including an employee in a retirement, life, disability, or health plan. An employee benefits liability insurance policy will help cover compensation for such an error. You may be able to add this protection as an endorsement to your general liability policy, though dollar limits of coverage may be lower than under a stand-alone policy.
Cyber insurance for public entities
Almost all public agencies house a lot of personally identifiable information on their computers. If those records are exfiltrated or otherwise illicitly accessed, the agency could face millions of dollars in costs, either ransom to stop the publication of data or to unencrypt your locked-down files or costs to notify victims and compensate them for any financial loss resulting from a cyber breach. Cyber insurance for public entities provides assistance in both these areas: the former falls under first-party cyber insurance; the latter under third-party cyber liability coverage. Both are important for government agencies. Cyber liability insurance may also include crisis response and public relations assistance as well as coverage for ongoing ID theft monitoring for victims.
Commercial auto insurance for public entities
Auto accidents are a leading cause of loss for public entities because of inflated verdicts and because there is the potential for mass casualty events. School bus crashes are extremely dangerous, but accidents involving any type of municipal or state vehicle open the possibility of high liability costs — both for injuries and property damage to others. Auto liability insurance is required in every state, though minimum coverage varies as does the way you insure against victim injury. Your insurance agent or broker can help you understand and comply with state law.
Beyond liability insurance, commercial auto policies also cover damage to your vehicles. Collision insurance steps in when your driver crashes into something and damages your vehicle. Comprehensive insurance offers broad protection for non-collision damage, such as theft, vandalism, or getting hit by debris while parked, such as wind-driven items or falling branches. You can insure fleets across locations if you need to.
If your employees attend business events using their own vehicles, you should consider hired and non-owned auto insurance, since personal auto insurance isn’t meant for business purposes.
You may also benefit greatly from uninsured motorist coverage on your commercial auto policy. That helps cover damage done by someone who doesn’t have auto insurance or has too little.
Medical payments coverage is another coverage that offers crucial protection. It covers passengers riding in your agency’s vehicles and will help with their medical care costs after an accident. Liability insurance typically covers those in other vehicles, not your passengers, so going without medical payments coverage leaves a big gap in your insurance.
Property insurance for public entities
Property insurance covers buildings, building contents and, with an inland marine endorsement, equipment or tools your employees transport off your premises. It may also include portable items your employees use when working from home or off-site. Policies typically cover fire, explosion, windstorm, theft, vandalism, and damage from burst pipes. Talk to your insurance agent or broker about coverage for damage from fire suppression sprinklers that malfunction and flood your building as well as chemical or biological damage emanating from your operations. Hazmat cleanup coverage may also be available.
To insure against mechanical and electrical breakdowns involving HVAC, generators and boilers, equipment breakdown insurance (also known as boiler and machinery insurance) can provide very specialized coverage for the various municipal buildings in the town. You may also wish to ask about debris removal costs and extra expenses associated with securing and occupying alternative premises while your damaged building is repaired. This might include use of trailers or the cost of transporting students to other schools.
Mobile equipment, such as cherry pickers and off-road service vehicles, will need special coverage since they are neither automobiles nor building equipment.
Flood and earthquake damage must be insured separately. There are many options, especially for flood insurance, so talk to your agent or broker about your risk and possible protections for your property.
Workers compensation insurance for public entities
We have talked a lot about coverage for harm to non-employees, but your organization also needs to insure against employee injuries. Workers compensation benefits and requirements vary by state, but in all cases the policy pays for medical care and helps with lost wages for employees injured or sickened on the job. The liability portion of a workers comp policy can also protect your agency from employee injury lawsuits. It may include rehabilitation benefits and a return-to-work program, so ask about perks that may be available. It’s important to correctly distinguish between employees and contract workers and to discuss coverage for part-time employees.
Surety bonds for public entities
Some officials working for public entities may need to secure a surety bond, especially those handling funds. A fidelity bond is one of the essentials. It acts as employee crime insurance, protecting against theft by a public official or employee. Some roles, like judges or clerks of the court, may require a statutory bond, which steps in if those individuals fail to comply with legal mandates. Many states require a faithful performance bond, which covers financial obligations associated with errors by a public official. Your insurance agent or broker may be able to secure your necessary bonds or can connect you to a surety bond agent who can.
Since volunteers are typically excluded from workers compensation insurance, public entities that use volunteer help should inquire about endorsing the workers comp policy or getting volunteer accident insurance. Volunteer firefighters and EMTs are in a different category. Even though they volunteer for service, many states have declared them eligible for workers comp. Where workers comp is not an option, fire companies may opt for volunteer firefighter or first responder insurance, which can cover medical treatment for injuries, wage loss if disabled by an injury, and death benefits. Some policies even offer cosmetic care for burns.
Get advice from a public entities insurance agent
Insuring public entities is complex since different agencies face their own specific risks. Additionally, there are many coverage options. You might prefer to cobble together various stand-alone policies to insure your risks, or you may wish to rely on the expertise of an insurer in your sector and purchase a program insurance policy, which is tailored to the common risks of your particular field, such as firefighting, public health or schools.
You may need help assessing the dollar limits of coverage best for you and if you need excess liability or umbrella insurance to extend your financial protection. An independent insurance agent or broker can walk you through your options, help you assess your needs, and assist you in complying with state and local insurance laws. Find a public entities insurance agent or broker near you.