“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-19.60Immunity 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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Grump v. Hazzard County
Plaintiff Donald Grump
