What to Look for in a Public Entity Insurance Program
Posted on: March 31, 2015 by Aegis General
Too often, public entities approach securing insurance as they would a common commodity, with a one-size-fits-all mentality. While public officials and entity decision makers mean well, by looking to obtain the necessary and appropriate coverage to protect themselves, their organizations and their constituents, they often lack the clarity, experience and information to make fully informed decisions to secure the right program for their unique needs. Municipality insurance is not a one-size-fits-all product. Instead, each organization needs customized coverage and varied deductibles that meet their exposures and budget.
From a coverage perspective, public entities face a unique situation. Not only are these entities responsible for their own internal workers, properties and assets, but for the public they serve as well. As with any specialty program, municipality insurance programs generally include special coverages specifically designed for the niche exposures these insureds regularly face. All public entities have some similar exposures to property and liability concerns, but the specifics will depend largely on the organization’s role in the community.
In some cases, standard policies are written to exclude specific acts or circumstances, which might be a normal part of a municipal entity’s duties or function. For example, a public entity may need to perform intentional acts in pursuit of their duties or public benefits, such as intentionally interrupting utility services to perform scheduled work or maintenance. However, intentional acts are seldom covered in liability policies. Should a liability claim arise during these situations, the claim might be questioned because the acts the entity was engaged in were “purposeful and intended” rather than “sudden and accidental.” Therein causing claims resolution and settlement complications.
Additionally, valuation of municipal properties, equipment and service vehicles (fire trucks, ambulances, rescue vehicles, etc.) is also a major concern. When it comes to valuing property, it is important to secure agreed upon value coverage or guaranteed replacement cost to ensure that high-value properties can be replaced.
It is also important to keep in mind the balance between deductibles and coverage amounts. Even low deductibles can quickly add up should a policy holder face multiple claims. Property, management liability and professional liability policies have the highest claim frequency for municipal entities, and it is not uncommon for an entity to face multiple claims in one or more coverage area. Often when a client chooses a lower priced, higher deductible program, the insured’s average number of claims multiplied by the deductible difference is greater than the cost of a more comprehensive program. This can put a strain on the public entity’s resources by exposing them to high out of pocket expenses.
When securing insurance for public entities, agents need a provider they can trust. Through one of our divisions, Allied Public Risk, Aegis General Insurance Agency provides insurance products and risk management services for the public sector. Our operation brings innovative, responsive and tailored protection to governmental organizations while offering competitive pricing, broad coverage, underwriting expertise and risk management resources. To learn more about Aegis General and our products, contact us today at (866) 662-5752.