“can i be sued for that?” liability and liability insurance trey allen nc emergency management...

“Can I Be Sued for That?”Liability and Liability Insurance

Trey AllenNC Emergency Management Association2014 Spring Conference March 24, 2014

Purchase Liability Insurance? Key Factors

• Risk of being held personally liable– Nature of work– Legal defenses– Coverage purchased by governmental unit

• Cost of purchasing sufficient liability insurance

Part I:

Risk of Being Held Personally Liable

• Official capacity claim

• Individual capacity claim

Official Capacity v. Individual Capacity

Potential for Claims Against Emergency Workers?

• Potential claims arising from emergency management functions?

• Likelihood of claims being made directly against emergency management workers?

• The Doctrine of Governmental Immunity bars tort claims against local governments arising from negligence or intentional misconduct of their personnel in performance of governmental functions.

• It does not bar tort claims for injuries arising from proprietary functions.

Governmental Immunity

Governmental Immunity (cont’d.)

• Governmental v. Proprietary Functions

• Governmental function = discretionary, political, or legislative in nature; performed for the public good on behalf of the State.

• Proprietary function = commercial or chiefly for the private advantage of the compact community.

Governmental Immunity (cont’d)

• G.S. 166A-19.60: “All functions hereunder and all activities relating to emergency management as provided for in [Chapter 166A] or elsewhere in the General Statutes are hereby declared to be governmental functions.”

Governmental Immunity (cont’d.)

• Estate of Williams v. Pasquotank County Parks & Recreation Dept., 366 N.C. 195 (2012).

Governmental Immunity (cont’d)

Local gov’t may waive governmental immunity by:

• Purchasing liability insurance or

• Participating in governmental risk pool.

Public Official Immunity

• General Rule: Gov’t personnel are personally liable for their intentional or negligent conduct.

• Doctrine of Public Official Immunity bars tort claims against “public officials” in their individual capacities for acts undertaken within the scope of their duties unless they act maliciously or corruptly.

• Doctrine does not protect public employees.

Public Official Immunity (cont’d)

• Public official– Office created by constitution

or statute– Takes oath of office– Exercises discretion in

performance of duties– Exercises sovereign power of

state

• Public employee – Duties are ministerial in nature

Public Official Immunity (cont’d)

• Public Official Immunity isn’t waived by purchase of liability insurance!

G.S. 166A-19.60

Immunity granted when:• Performing any EM functions under Chapter 166A,

other statutes, or local ordinance• Complying with order, rule, or regulation issued

under Chapter 166A, other statutes or local ordinance

Immunity granted from:• Death or injury to person• Damage to property

No immunity for harms resulting from willful misconduct, gross negligence, or bad faith.

Gov’t Liability Coverage

• Most counties participate in NCACC risk pool.

• Some counties have purchased liability insurance from insurance companies.

A Risk Pool is a special type of non-profit entity that enables its members to pre-fund the financial risk of accidental loss though the collective assumption of their individual risk.

Gov’t Liability Coverage (cont’d)

• Insurance Company

– Corporation with stockholders

– Managed by private board of directors

– Profit Motive

Gov’t Liability Coverage (cont’d)

• NCACC Risk Pools

• Coverage for 67 of 100 counties for liability/property or workers’ compensation

• Coverage for 51 counties for both

• Also coverage for 46 separate entities– Regional jails, libraries, transportation,

COGs, etc.

Gov’t Liability Coverage (cont’d)

General Questions

• Common nature of General Liability Policies

• Other coverages that apply?

• Conditions to be aware of?

• Exclusions which might apply

• Difficulties in past concerning coverage?

Gov’t Liability Coverage (cont’d)

NCACC Pools Coverage Design

• Property

• General Liability *

• Commercial Automobile

• Crime

• Law Enforcement Liability

• Public Official Liability *

• Employment Practice Liability

• Workers Compensation

Gov’t Liability Coverage (cont’d)

NCACC General Liability: “The Pool will pay on behalf of a Covered Person any Damages a Covered Person becomes legally obligated to pay because of an Occurrence that occurs during the Contract Period.”

Liability Coverage (cont’d)

Examples

• Bodily Injury to 3rd party

• Property damage of a 3rd party

• Personal Injury (libel, slander, etc.)

• Contractual coverage for “covered contracts”

• May include nominal level medical payments

• Defense costs in your behalf

Liability Coverage (cont’d)

Exclusions• Any claim or Suit to which a

Covered Person is entitled to sovereign immunity or governmental immunity under North Carolina Law

• Claim or suit alleging Public Officials, Law Enforcement or Employment Practice Wrongful Acts;

• Punitive damages, fines, penalties, etc.

Gov’t Liability Coverage (cont’d)

Gov’t Liability Coverage (cont’d)

NCACC Public Officials Liability: Agree to pay on behalf of because of

Public Officials Wrongful Act – defined as:

…any error, misstatement or misleading statement or act or omission or neglect or breach of duty including misfeasance, malfeasance, or nonfeasance by a Covered Person while acting within the scope of his/her professional duties or Pool approved activities.

Gov’t Liability Coverage (cont’d)

Exclusions

• Any claim or suit to which a Covered Person is entitled to sovereign immunity or governmental immunity under North Carolina Law

• Claim or suit brought about through fraudulent, dishonest or criminal behavior of Covered Person

Gov’t Liability Coverage (cont’d)

Common Conditions & Definitions

• Notice of Loss – as soon as practicable

• Assistance & Cooperation in process

• Pools right to adjudicate and settle claims

• Medical Reports, Proof of Claim

• Other Insurance - Excess Vs Escape

• Definitions seek to clarify/refine scope

Gov’t Liability Coverage (cont’d)

PART II: Cost of Purchasing Sufficient

Liability Insurance

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QUESTIONS?

Trey Allen

UNC School of Government

919-843-9019

tallen@sog.unc.edu

Grump v. Hazzard County

Plaintiff Donald Grump