Municipalities Insurance Policy Information
Municipalities Insurance. In the public sector, exposures to risks and losses aren't anything new. In fact, public officials face numerous liabilities on a daily basis. Given the fact that city officials are tasked with so many responsibilities, such as balancing budgets, managing debts, ensuring that the residents in their jurisdictions are safe and have access to proper protection and education, infrastructure is functioning properly, and more.
Given all of the responsibilities that municipalities are tasked with, it's no wonder why officials are exposed to so many risks.
Municipal buildings provide office and meeting facilities for township, city, county, or state legislative operations. They often have auditoriums designed for large public gatherings or for political assemblies. A council runs municipalities, either elected or appointed and may have a mayor who acts as the leader.
Wide varieties of services are provided to residents in exchange for tax dollars. These services may include planning and zoning, licenses and permits, assessors' and surveyors' offices, courts, disease control, sanitation, road construction and maintenance, snow removal, and public protection such as police or fire departments.
Some municipalities contract utility services, such as gas, water, or electricity, for residents within their geographical area.
In order for municipalities to protect themselves from the numerous risks that they face, investing in the right type of municipalities insurance is essential. What type of insurance should municipalities carry and why is insurance coverage so important? Read on to find out more.
Municipalities insurance protects your municipal buildings and operations from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked municipality insurance questions:
- What Is Municipality Insurance?
- How Much Does Municipality Insurance Cost?
- Why Do Municipalities Need Insurance?
- What Type Of Insurance Do Municipalities Need??
- What Does Municipalities Insurance Cover & Pay For?
What Is Municipality Insurance?
Municipality insurance is a type of insurance coverage specifically designed for government entities and local municipalities. It provides protection for the municipality and its employees against claims or lawsuits related to their official duties and responsibilities. This may include coverage for liability, property damage, cyber liability, and workers' compensation, among others. The purpose of municipality insurance is to protect the financial stability of the municipality and reduce the risk of financial losses from legal actions or claims against the municipality.
How Much Does Municipality Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small municipalities ranges from $67 to $99 per month based on location, size, services offered, claims history and more.
Why Do Municipalities Need Insurance?
In the event that a city official makes an error or a poor decision that ends up damaging the constituents that represent, officials, as well as the city, are responsible for any associated damages.
For example, if a budget is mismanaged and funds aren't allocated to the departments they are supposed to be allocated to and aren't used for what they are intended to be use for and constituents file a lawsuit against the city, serious financial repercussions could arise.
That's just one example of the issues that municipalities and city officials face and why municipalities insurance coverage is so important. In the event that an unforeseen circumstance, an error, or even an intended action that does not benefit the municipality occurs, insurance would help to cover the related costs that are associated with damages, repairs, medical bills, and legal defense fees.
Without the right municipalities insurance coverage, the municipality would have to pay for the related expenses themselves. With municipal insurance, however, if and when an issue does arise, the insurance carrier would cover the associated costs.
What Type Of Insurance Do Municipalities Need?
The type of municipalities insurance coverage that municipal operations require varies and depends on a variety of factors.
With that said, however, there are several types of coverage that all municipalities should carry. These municipal coverages include:
- General Liability: This type of coverage protects municipalities from third-party liability and property damage claims that may occur on properties that are controlled under a municipality. For example, if someone were to trip and fall on an improperly maintained sidewalk or if a vehicle were to be damaged on a pothole that has existed for a long time and the injured individual or the person who owns the damaged vehicle filed a lawsuit against the municipality, this part of an insurance policy would cover the expenses that are associated with legal defense fees, as well as any settlements that a court may be find the municipality responsible for.
- Crime Insurance: An important part of protecting the constituents of a municipality is crime prevention. Officials must take the necessary precautions to protect their cities from potential crime as much as possible. If a city fails to do so, however - for example, if there rioting and looting were to occur and business did nothing to prevent or quell the illegal, destructive, and harmful actions, business owners or anyone who else that was affected by the rioting and looting could file a lawsuit against the city. This part of a municipality insurance policy would help to cover any of the related costs in this type of situation.
- Employment Practices Liability (EPLI): Generally, this type of coverage offers municipalities with the protection they need against claims that may be made by employees for unfair employment practices; age, race, or gender discrimination, wrongful termination, unfair discipline, retaliation, or nepotism that leads for unfair hiring practices, for example. If someone were to file a lawsuit against the city for these negative employment practices, this part of an insurance policy would help to pay for the related expenses.
These policies are a few examples of the type of municipalities insurance coverage you should consider for your municipal operations. To find out more about the coverages that a properly designed municipality insurance policy should offer, speak with an insurance broker.
Municipalities' Risks & Exposures
Premises liability exposure is high due to services provided to residents and the public's access to the building. If tours are given, exposures increase significantly as guests may be led through areas generally "off limits" to more casual visitors.
Legislation and judicial decisions have eroded governmental immunity protection in most states. Public and life safety code compliance is very important. To prevent trips, slips, and falls, all premises must be well maintained with flooring in good condition. Adequate lighting, marked exits, and egress are mandatory. Steps must have handrails, be well lit, marked, and in good repair.
An outside service contractor should inspect elevators and escalators annually. Parking lots should be free of ice and snow. Municipal facilities may be a target for vandals, disgruntled citizens, criminals, or terrorists. Security inside the facility, as well as outside areas including owned parking area, needs to be carefully implemented and monitored.
An evacuation plan must be in place. Personal injury losses may occur due to alleged assault, discrimination, invasion of privacy, or unlawful detention.
Public officials' liability exposure can be severe. Today's political climate has seen an increase in lawsuits against public officials for failure to perform the functions of their office, failure to account for tax funds, failure to enforce regulations, failure to follow mandated procedures, such as open bidding on contracts, bad faith, and other errors or omissions. Defense costs can be prohibitively expensive.
Workers compensation exposures are varied, from office workers to volunteers, janitorial staff, building or yard maintenance workers, repair personnel, and drivers. Workers may incur back injuries, hernias, slips, falls, strains, or sprains. Skin and lung irritation can result from working with cleaning chemicals and paint.
Office workers may develop repetitive motion injuries. Workstations should be ergonomically designed. There may be interactions with angry constituents or protestors. Employees should be trained to deal with difficult situations.
Property exposure is generally low. Ignition sources include electrical wiring, heating, and air conditioning systems. There may be a restaurant or cafeteria on premises. Most offices and auditoriums have extensive wiring for lighting, computers, and other electronic equipment. It must be in good repair and adequate for its use.
Valuation may be a concern in older buildings with unique architectural features that may be difficult to rebuild with like construction and quality after a loss. Smoke detectors are critical for early detection of a fire. Smoking should be prohibited.
If there is a restaurant or cafeteria on premises, all cooking equipment should be properly protected. Garages for storing, fueling, and maintaining vehicles must be separated from office facilities. Municipal facilities may be a target for political activists or for terrorists.
Adequate security is required. There should be disaster recovery plans in place to continue operations in the event of a large loss.
Crime exposure is from public officials' dishonesty, employee dishonesty, and money and securities. Background checks, including criminal history, must be completed on all employees. Receipts must be provided for all payments of taxes, fees, fines, and penalties, with daily reconciliation between receipts and money received.
Deposits should be made promptly with appropriate security provided. Money should not be left on premises overnight. There must be regular audits, preferably by an outside firm. All employees must take at least one complete week vacation every year.
If the facilities have offices to collect fees, penalties, or obtain permits and licenses, there may be an exposure to hold up.
Inland marine exposures are from accounts receivable for billings, audio/visual equipment, computers, contractors' equipment, fine arts, and valuable papers and records. Contractors' equipment may be used off-premises to build, maintain, or service municipal streets and roads.
If any owned equipment is used or taken off-premises, the exposure increases. Fine arts such as statuary and paintings, artifacts, historical documents, rare or historical books, or manuscripts may be one-of-a-kind and irreplaceable.
If insured, valuation should be done by a qualified appraiser. Valuable papers and records are often delicate and must be protected from fire, water damage, vandalism, theft, or other losses. Duplicates of all files should be stored at an off-site facility for easy retrieval in the event of a loss.
Business auto exposure can be high if vehicles are used to transport public officials, guests, and visitors. All drivers must have appropriate licenses and acceptable MVRs. All vehicles must be maintained on a regular basis with records kept in a central location.
During inclement weather, drivers may be on the road for extended hours in adverse conditions. Supervision is necessary so drivers can be rotated and not become overly fatigued.
There may be a high non-owned auto exposure if employees use their own vehicles to run errands or attend meetings on municipal business. Employees should carry personal automobile insurance with adequate liability limits.
What Does Municipalities Insurance Cover & Pay For?
Municipalities can be sued for various reasons, and having the right insurance coverage is crucial in protecting them from financial losses. Some common reasons for lawsuits against municipalities and how insurance helps include:
Personal injury or property damage: If someone is injured on municipal property or if the municipality's actions damage private property, they may be sued for compensation. Insurance, such as general liability coverage, can help pay for medical expenses, legal defense fees, and any settlement or judgment amounts resulting from such lawsuits.
Employment practices: Municipalities can face lawsuits related to discrimination, harassment, wrongful termination, or other employment-related issues. Employment Practices Liability Insurance (EPLI) can cover legal defense costs, settlements, and judgments associated with these types of claims.
Law enforcement liability: Police officers and other law enforcement personnel can be sued for misconduct, excessive force, or civil rights violations. Law Enforcement Liability Insurance provides coverage for legal defense costs, settlements, and judgments in these cases.
Public officials' liability: Elected or appointed officials can be sued for errors or omissions in the performance of their duties. Public Officials Liability Insurance can help pay for legal defense costs, settlements, and judgments arising from such claims.
Automobile liability: Municipalities may be sued for accidents involving their vehicles, such as police cars, fire trucks, or public works vehicles. Automobile Liability Insurance can help cover the costs of legal defense, settlements, and judgments in these cases.
Cyber liability: Municipalities can face lawsuits for data breaches or cyber attacks that compromise citizens' personal information. Cyber Liability Insurance can help cover the costs of legal defense, settlements, judgments, and any required notifications or remediation efforts.
Environmental liability: Municipalities can be held responsible for environmental damage caused by their operations, such as wastewater treatment plants or waste disposal facilities. Environmental Liability Insurance can help cover the costs of legal defense, settlements, judgments, and cleanup efforts.
For each of these examples, insurance can provide a financial safety net for the municipality by covering legal fees, settlements, and judgments, allowing them to continue providing essential services to their community without facing significant financial strain.
Commercial Insurance And Business Industry Classification
- SIC CODE: 9111 Executive Offices, 9121 Legislative Bodies, 9131 Executive And Legislative Offices Combined, 9199: General Government, Not Elsewhere Classified
- NAICS CODE: 921110 Executive Offices, 921120 Legislative Bodies, 921130 Public Finance Activities, 921140 Executive and Legislature, Combined, 921190 Other General Governmental Support
- Suggested Workers Compensation Code(s): 9015 Building or Property Management - All Other Employees, 8810 Clerical Office Employees NOC
Description for 9111: Executive Offices
Division J: Public Administration | Major Group 91: Executive, Legislative, And General Government, Except Finance | Industry Group 911: Executive Offices
9111 Executive Offices: Offices of chief executives and their advisory and interdepartmental committees and commissions.
- Advisory commissions, executive
- City and town managers'offices
- County supervisors'and executives'offices
- President's office
Description for 9121: Legislative Bodies
Division J: Public Administration | Major Group 91: Executive, Legislative, And General Government, Except Finance | Industry Group 912: Legislative Bodies
9121 Legislative Bodies: Legislative bodies and their advisory and interdepartmental committees and commissions.
- Advisory commissions, legislative
- Boards of supervisors
- City and town councils
- County commissioners
- Legislative assemblies
- Study commissions, legislative
Description for 9131: Executive And Legislative Offices Combined
Division J: Public Administration | Major Group 91: Executive, Legislative, And General Government, Except Finance | Industry Group 913: Executive And Legislative Offices Combined
9131 Executive And Legislative Offices Combined: Councils and boards of commissioners or supervisors and such bodies where the chief executive is a member of the legislative body itself.
- Legislative and executive office combinations
Description for 9199: General Government, Not Elsewhere Classified
Division J: Public Administration | Major Group 91: Executive, Legislative, And General Government, Except Finance | Industry Group 919: General Government, Not Elsewhere Classified
9199 General Government, Not Elsewhere Classified: Establishments primarily engaged in providing tax return preparation services without also providing accounting, auditing, or bookkeeping services. Government establishments primarily engaged in providing general support for government, which include personnel, auditing, procurement services, and building management services, and other general government establishments which cannot be classified in other industries. Public finance is classified in Industry 9311.
- Civil rights commissions-government
- Civil service commissions-government
- General accounting offices-government
- General services departments-government
- Personnel agencies-government
- Purchasing and supply agencies-government
- Supply agencies-government
Municipalities Insurance - The Bottom Line
To learn more about the specific types of municipalities insurance policies you'll need and how much coverage your municipal buildings and operations need - speak with an experienced insurance broker who understands the unique risks that municipalities face.
Additional Resources For Local, State And Federal Government Insurance
Learn about commercial insurance for local, state and federal government agencies, services, operations and buildings.
- County Administration Offices
- Fire Departments
- Government Buildings
- Law Enforcement Entities
- Public Buildings
- Specialty Government
The local, state and federal government agencies, services, operations and buildings industry needs business insurance for a variety of reasons.
First and foremost, business insurance helps protect against financial loss. Governments and their agencies often handle large amounts of money, assets and sensitive information, making them a target for theft, fraud and other criminal activities. Insurance can help cover the costs associated with recovering from these types of losses.
In addition, government agencies and buildings are at risk for natural disasters, such as floods, earthquakes and hurricanes. Commercial insurance can help cover the costs of repairing damage caused by these types of events.
Furthermore, government agencies and services often deal with the public on a daily basis, making them vulnerable to liability claims. For example, if a government building is not properly maintained and a visitor slips and falls, the agency could be held liable for the injuries sustained. Insurance can help cover the costs of legal proceedings and any damages awarded.
Lastly, commercial insurance can help protect against unexpected disruptions in operations. For example, if a government agency's computer systems were to crash, it could disrupt the agency's ability to function effectively. Business insurance can help cover the costs of getting the agency back up and running as quickly as possible.
Overall, the local, state and federal government agencies, services, operations and buildings industry needs insurance to protect against financial loss, natural disasters, liability claims and disruptions in operations. Without it, these agencies could face significant financial and operational challenges.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Employee Dishonesty, Money and Securities, Accounts Receivable, Audio/Visual Equipment, Computers, Contractors' Equipment, Fine Arts, Valuable Papers and Records, General Liability, Cyberliability, Employee Benefits, Public Officials' Liability, Umbrella, Hired and Non-Oowned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Extra Expense, Flood, Computer Fraud, Forgery, Employment-related Practices, Business Auto Liability and Physical Damage and; Stop Gap Liability.