[Infographic] Do You Need Terrorism Insurance?

In the aftermath of the 9/11 terrorist attacks, insured losses amounted to approximately $47 billion prompting the federal government to enact the Terrorism Risk Insurance Act (TRIA). This act allows the federal government and insurance industry to share losses arising from acts of terrorism.

How is terrorism defined under TRIA?

  • Must first be certified by the Secretary of the Treasury in consultation with the Secretary of Homeland Security
  • Must be an act that is dangerous to human life, property, or infrastructure and to have resulted in damage within the United States
  • Must be committed as part of an effort to coerce U.S. civilians or to influence either policy or conduct of the U.S. Government through coercion

TRIA set to expire December 31, 2020

Thankfully there have been no certified terrorism losses in the country since TRIA was originally passed in November 2002; however, the Act remains crucial to the stability and health of the property terrorism insurance market. TRIA has been renewed three times since its inception: 2005, 2007 and most recently in 2015. Although the expiration date remains more than a year out, commercial insurers are preparing for a market without TRIA and working to warn officials about the consequences of a non-renewal.

Considerations for purchasing terrorism coverage

According to Marsh Placemap, 66% of public entities and nonprofit organizations bought terrorism insurance in 2018 with a premium allocation of 3%. In considering a purchase of this coverage, think about the location of your entity. Rural and residential areas are less likely to be targeted by a terrorist attack. Have you budgeted for the coverage? Policies can range from 3 to 5 percent of an organization’s property insurance costs.

Non-Owned Automobile Exposure for Public Entities

Know Your Auto Exposures

Do you know that you could be liable for accidents caused by your employees while driving their own vehicles for business?

Examples:

  • Your street and roads department supervisor drives his own vehicle to a repair project to check on progress before heading home for the day.
  • A group of law enforcement officers are asked to stop by the gun range on the way home from their shift.
  • An administration employee for the county commissioners is going to lunch and is asked, as is frequently the case, to stop by the store to get supplies.
  • A social services worker drives her own vehicle every day for client home visits.

If an accident occurs in any of these scenarios, your automobile policy can be brought in to pay the remainder of the damages after the employee’s personal automobile insurance limits have been exhausted. The exposure is called Non-Owned Auto Liability and it can contribute to significant expenses for your entity.

The occasional use of an employee’s vehicle is not unexpected but it should be minimized to reduce the overall likelihood of claim participation. The more challenging issue is displayed above in the fourth example where an employee uses their own vehicle daily to conduct business for you. The remainder of this document is focused on this regular use of the employee’s vehicle for business.

What do we mean by the term Non-Owned Auto?

It is as it sounds – liability for autos that are not owned by your entity. The term “non-owned auto” in an automobile policy refers to autos that you do not own, lease, rent or borrow and that are used in connection with your business. It is the use of an employee’s personal vehicle by the employee to conduct business activities for their employer under the approval and/or knowledge of the employer.

What about the employee’s own policy?

Any employee driving their own vehicle should have his/her own auto insurance; it will respond first as the primary coverage. The employer’s auto liability insurance will only kick in to cover damages above the policy limits of the employee’s personal insurance, but only up to the employer’s policy limit.

In some states, the minimum limits required for insurance coverage on a personal automobile insurance policy can be as low as $10,000/$20,000. The employee may not wish to purchase higher limits than what is required by the state. Should the damages from an at-fault crash result in losses greater than that amount, the employer could be held liable for those damages. Therefore, it is important to have the employee who drives their own vehicle for company business supply limits of coverage as suggested by the entity’s insurance agent/broker.

You should know, many personal auto liability policies will exclude coverage if business operations are involved. In these cases, your organization will still be excess, but there might be no underlying coverage.

What can you do to eliminate or reduce non-owned auto losses?

First and foremost, if you are not comfortable allowing an employee to drive your entity’s vehicle, you should not let that employee drive his/her own vehicles for business. Just as you review the driving records of drivers assigned a company vehicle, you should review the motor vehicle records of employees who use their own vehicles for business purposes. Driver behavior behind the wheel does not vary between work and personal life. If the driver does not meet your driving standards, do not let them drive any vehicle for business.

Second, recognize that an employee’s personal vehicle may not be as well maintained as a company-owned vehicle and may not be road ready when needed. The employee could also be uninsured, underinsured, not have a valid driver’s license or have a poor driving record.

If you knowingly allow a poor driver to drive and a serious crash occurs, charges of “Negligent Entrustment” may be filed against you. Negligent Entrustment means to assign someone a trust or duty in an inattentive or careless fashion or without completing required due process steps. If proven, you can be held liable for damages including punitive damages, which may be non-insurable based on state public policy.

When use of a personal auto is required for business purposes, use sound risk management practices to minimize the liability exposure:

  • Treat the operation of an employee-owned vehicle the same as that of a company-owned vehicle.
  • Require the driver to frequently inspect the vehicle to assure road readiness and verify proper maintenance has been conducted. This would include having the employee keep all maintenance records.
  • Maintain a copy of the employee’s valid driver’s license.
  • Screen the employee’s motor vehicle record for acceptable driving performance.
  • Require employees to carry acceptable automobile liability limits, as prescribed by your agent/broker.
  • Obtain a copy of the declaration page of the employee’s personal automobile insurance policy for the driver’s file.
  • Perform a “road test” with the employee to assure proper driving ability and basic defensive driving skills.
  • Include non-owned drivers/employees in driver training sessions and fleet safety meetings.
  • Implement a written cell phone and electronics distracted driving policy.
  • Require the employee follow the entity’s driver rules/standards.
  • Require the driver to sign an acknowledgment for responsibility of primary automobile insurance.

MVR checks should be done at the time of hire for all employees who will routinely drive on company business, including all non-owned drivers. In addition, they should be re-evaluated every 12 to 16 months to ensure their driving record remains acceptable. You should never rely on someone else (insurance broker or carrier) to determine driver acceptability. Adopt your own criteria for acceptable Motor Vehicle Records (MVRs) and determine if an employee should be allowed to drive on company business. You – as the employer – will be held accountable if legal action is taken against you due to an accident caused by an unacceptable driver.

If you need assistance developing these programs, or would like additional information on the topics discussed in this article, please contact OBGRRiskControl@onebeacongov.com and a Risk Management Consultant will be in touch.

School Resource Officers: Yours, Mine or Ours?

As a risk manager for a municipal public entity, you likely are not responsible for the schools in your locale; however, if your law enforcement agency assigns one of their officers to serve as a school resource officer, you now have a stake in the game of liability.

Despite highly publicized school attacks and media reports of school violence, schools remain one of the safest places for children thanks in large part to efforts by school administration and their partnership with local law enforcement.

The first School Resource Officer (SRO) program began in the late 1950s in Flint, Michigan as a way to improve the relationship between local law enforcement and the youth. Since then, the SRO role has become a widely accepted practice across the country and has been proven to help keep our schools safe.

The Duties of a School Resource Officer

An SRO is a law enforcement officer who is employed by a police or sheriff agency that is assigned to one or more schools. The SRO provides a safe learning environment and provides valuable resources to both school staff members and students. The SRO fosters a positive relationship with students and develops strategies to resolve conflicts with the goal of protecting all children. The National Association of School Resource Officers (NASRO) divides the SRO responsibilities into three areas: teacher, informal counselor and law enforcement officer. Before being assigned to a school, an SRO should undergo specialized training to help minimize liability imposed on the local government or school district.

“Unfortunately, most local governments continue to underperform in the area of SRO training. An examination of SRO training policies undertaken in 2015 observes that despite the “obvious need” for more specialized training, the SRO is more likely to be at risk of violating constitutional rights of students.” -Government Liability and the Failure to Train, Spring 2016

Who Holds Liability in a Lawsuit: The School District or Local Government?

It depends. Typically, the SRO is contracted and paid for by the school district, yet maintains employment through their local law enforcement agency creating vagueness when the issue of liability arises in certain instances. SRO programs should include formal agreements between school districts and law enforcement agencies regarding officer selection, funding, training, supervision, evaluation, and associated issues.

Certain aspects of the responsibilities of the SRO and the relationship between the law enforcement agency and the school addressed in the contract agreement typically includes:

  • The SRO should perform law enforcement duties as determined by the Chief of Police, but the school can negotiate those duties based on their specific needs.
  • The SRO cannot enforce or institute disciplinary measures as they pertain to a student, but they can remind students of a school rule if necessary.
  • An SRO will not be assigned to any job or task beyond the duties of an assigned officer. This means that they will not be assigned to handle situations where the school administration should be in charge: i.e. lunchroom duties, bus monitor, and more.
  • The SRO will have their own office space and the resources to allow them to do their job effectively.
  • In order to protect the student’s Fourth Amendment Rights, drug violations that are caught by the school cannot result in punitive consequences. These results are confidential at all times.
  • The last part of the agreement states the terms of indemnification, or, who should pay for what. It is not uncommon to see “each party should be held from all liability.” If no one is responsible for legal fees, cost of judgments, and other things, who will be the one to pay for it? That is the big question and concern. Specify who is responsible for what actions.

What You Should Know About Citizen Journalism in 2019

Do your law enforcement officers know the proper protocol as it pertains to citizen journalism and public photography? Do they know how to handle being photographed or recorded while they carry out their duties? With the widespread proliferation of smartphones, capable of recording high quality images along with audio and video, as well as the increasing deployment of police bodycams, everybody is documenting everything and everyone.

First Off, What is Citizen Journalism?

Citizen journalism involves private individuals, who are normally consumers of journalism, generating their own news content. These citizens create user-generated content in many forms including a podcast editorial or blog article about a city council meeting. Social media plays a major role in disseminating citizen journalism content allowing everyday citizens to be the first to report on breaking stories with real-time information.

The Rights of Citizens

In August 2010, the Department of Homeland Security distributed a bulletin outlining the right per Code of Federal Regulations which specifically allows photography in federal buildings, and reiterated pre-existing law that “absent of reasonable suspicion or probable cause, law enforcement and security personnel must allow individuals to photograph the exterior of federally owned or leased facilities from publicly accessible spaces.” Additionally, the 1st, 3rd, 5th, 7th, 9th, and 11th Circuit Courts of Appeals have ruled that the First Amendment protects individuals’ right to film police officers performing their official duties.

The takeaway from this? Taking photographs and videos of things that are plainly visible in public is a constitutional right. The problem lies in the ongoing pattern of law enforcement officers ordering people to cease taking photographs and video in public.

The Well-Informed Law Enforcement Officer

As long as any photographing or recording takes place in a setting at which the citizen has a legal right to be present and does not interfere with the safety of the officer or fellow citizens, officers shall not inform or instruct people that photographing or recording of police officers, police activity or individuals who are the subject of police action (such as a Terry stop or an arrest) is not allowed; requires a permit; or requires consent. Additionally, officers shall not:

  1. Order that person to cease such activity;
  2. Demand that person’s identification;
  3. Demand that the person state a reason why he or she is taking photographs or recording;
  4. Detain that person;
  5. Intentionally block or obstruct cameras or recording devices; or
  6. In any way threaten, intimidate or otherwise discourage an individual from recording members’ enforcement activities.

Case Law: Turner v. Driver, Grinalds, and Dyess

Although the officers in the case of Turner v. Driver, Grinalds, and Dyess were granted qualified immunity, Justice Jacques Weiner writes, “Filming the police contributes to the public’s ability to hold the police accountable, ensure the police officers are not abusing their power, and make informed decisions about police policy. Protecting the right to film police promotes First Amendment principles.”

Key Takeaway

Only under extremely limited circumstances is it permissible to seize the photographs or recordings belonging to a citizen journalist. Be very clear with your law enforcement department and offer training opportunities on the right to photograph and record in public. In the event of a lawsuit, the likelihood of charges being dismissed may be high thanks to qualified immunities but why risk going to court in the first place?

Resources: