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

1. “Can I Be Sued for That?”Liability and Liability Insurance Trey Allen NC Emergency Management Association 2014 Spring Conference March 24, 2014

3. 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

4. Part I: Risk of Being Held Personally Liable

5. Official Capacity v. Individual Capacity • Official capacity claim • Individual capacity claim

6. Potential for Claims Against Emergency Workers? • Potential claims arising from emergency management functions? • Likelihood of claims being made directly against emergency management workers?

7. Governmental Immunity • 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.

8. 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.

9. 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.”

10. Governmental Immunity (cont’d.) • Estate of Williams v. Pasquotank County Parks & Recreation Dept., 366 N.C. 195(2012).

11. Governmental Immunity (cont’d) Local gov’t may waive governmental immunity by: • Purchasing liability insurance or • Participating in governmental risk pool.

12. 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.

13. 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

14. Public Official Immunity (cont’d) • Public Official Immunity isn’t waived by purchase of liability insurance!

15. 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.

16. Gov’t Liability Coverage • Most counties participate in NCACC risk pool. • Some counties have purchased liability insurance from insurance companies.

17. Gov’t Liability Coverage (cont’d) 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.

18. Gov’t Liability Coverage (cont’d) • Insurance Company • Corporation with stockholders • Managed by private board of directors • Profit Motive

19. 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.

20. 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?

21. 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

22. 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.”

23. 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

24. 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 alleging Public Officials, Law Enforcement or Employment Practice Wrongful Acts; • Punitive damages, fines, penalties, etc.

25. Gov’t Liability Coverage (cont’d) NCACC Public Officials Liability: Agree to pay on behalf of because of Public Officials Wrongful Act – defined as:

26. Gov’t Liability Coverage (cont’d) …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.

27. 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

28. 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

29. PART II: Cost of Purchasing Sufficient Liability Insurance

30. ?????????

31. QUESTIONS? Trey Allen UNC School of Government 919-843-9019 tallen@sog.unc.edu

32. Grump v. Hazzard County Plaintiff Donald Grump