4 Trends Impacting Public Entity Liability Programs

Public entity risk professionals face unique challenges that most recently include issues with law enforcement liability and civil unrest. Nuclear verdicts resulting from these issues also drive the need for larger policy limits, creating additional purchasing challenges where an entity may already be relying on public funding.

“It is important for employers to implement updated policies and procedures to address liability risks, including comprehensive risk control programs that require adherence to such policies,” said Kevin Pollock, Public Entity Underwriting Director at Safety National. “If involved in litigation, the engagement of specialized legal consultation and expertise is essential, particularly in the early stages of a claim or incident, which can aid in preventing sizeable defense costs and unfavorable jury verdicts.”

Here are some current trends that can heavily impact a public entity liability program and the ability to obtain proper insurance coverage.

Social Inflation

Juries around the nation have become increasingly hostile toward public entities with the rise in social pessimism, leading to larger compensatory plaintiff awards. While further legislative reform is necessary to control the overall issue, there are steps that municipalities can take to combat this trend. Mock juries can be a valuable tool in predicting how a trial may play out. If it is practical to consider, settling may be advisable when risking an unpredictable jury trial.

Cyberattacks

With a challenging cyber liability market, public entities face increased premiums and reduced limits. In recent years, a massive influx of cyberattacks has created an abundance of difficulties in developing the terms of these policies. As a result, many public entities are forgoing cyber coverage altogether. Large corporations may hire security teams to take preventative measures, build firewalls and buy all the necessary security applications. Still, local governments may not have the budget to afford this. Without a layer of prevention, a cyber carrier may be less apt to write a policy, which leaves an entity more vulnerable to an attack.

Sexual Abuse and Molestation

Increased and, in certain states, an indefinite statute of limitations has changed the filing requirements for a sexual abuse or molestation (SAM) event, with many cases dating back decades. Due to extensions and the uptick in these cases, many carriers will only write SAM coverage based on a per-occurrence basis since a per-claim basis may involve multiple parties. It is critical for districts to have a policy that explicitly outlines what behaviors are allowed and prohibited. For example, probation for employees that transport students in a personal vehicle. Social media policies, incident reporting and software monitoring can assist in a school’s ability to mitigate these risks.

Sports-Related Injuries

The results of sports-related injuries can range from broken bones to traumatic brain injuries (TBIs) and, in some cases, death. With up to 3 million concussions occurring each year, and 5 in 10 going unreported, it may take years for a player to recognize any potential damage. Immediate treatment, on-staff nurses and symptom-recognition training in coaches can mitigate risks. Enhanced monitoring and prevention standards in response to this risk can ultimately reduce claims and litigation exposures. While much of this responsibility may fall on schools or coaches to prevent, municipalities with parks or recreational areas may also be liable for any injuries.