2016 Policy Announcements
Medical Clinics — Liability Coverage
In the past, Public Entity Partners’s policy excluded any liability arising from the operation of a medical facility, including clinics. As more members are developing clinics to serve employees and their families, we are amending the policy, which will cover the premises exposure related to outpatient medical clinics when medical services are provided by third-party providers. The policy continues to exclude the medical professional exposure of these clinics, so we suggest that you take measures to make sure the third-party provider indemnifies your entity for any losses they incur in the providing of professional services. This coverage will be automatically included in your liability coverage at no additional charge.
Freezing of Firefighting Equipment ― Liability Coverage
In the past, Public Entity Partners’s auto physical damage coverage excluded damage to vehicles resulting from freezing. We are pleased to announce that, effective with our July 1, 2016 liability policy, we now provide an exception to that exclusion. Damage to firefighting equipment from freezing will be covered if the damage occurs while using the equipment to fight fires, or during firefighting training, or within 24 hours of the cessation of either such activity. This coverage will apply automatically at no additional charge.
Use of Prisoners on Municipal Work Programs — Liability Coverage
Effective with the 2014 revisions to TCA 41-2-123, the law related to the use of state and county prisoners on municipal work programs has changed. The new statute provides:
- With the use of a proper interlocal agreement, municipalities are immune from liability for injury to state and county prisoners while working on municipal work projects. This does not apply to persons on probation who are required to provide public service, or persons sentenced to public service, so the immunity provisions do not apply to such situations.
- Within the interlocal agreement, a municipal entity may assume the responsibility for medical expenses arising from injury to prisoners while on work detail. It is important to note that this covers injury only and not all sickness. It is also important to note that this liability is statutory and not dependent on the negligence of the municipality. For probationers and those sentenced to service who are not incarcerated, liability for injury remains negligence based under Tennessee Governmental Tort Liability Act (TGTLA).
Public Entity Partners liability policy will provide coverage for the statutory medical expenses incurred by state and county prisoners, assumed by a municipality under an interlocal agreement, if that interlocal agreement is added to the policy on the additional named insured endorsement. If the agreement does not exist or is not listed on the policy, then no coverage is provided. Liability policy coverage for persons who are not incarcerated, but are doing sentenced public service, will apply under the TGTLA negligence standard.
It is important to remember to execute a proper interlocal agreement on the use of state or county prisoners, indicating who will be responsible for the medical care for injury to these prisoners, and inform Public Entity Partners as to the existence of the agreement. Your underwriter will be requesting a copy of the interlocal agreement.
Unmanned Aerial Systems (Drones) ― Liability and Property Coverage
Public Entity Partners is pleased to announce the availability of optional coverage on aerial drones for both liability and property coverage on policies effective July 1, 2016, and later. Both coverages will be offered on a scheduled basis, and require that the drones be used by operators who are designated by the member, and who are trained in proper operation and regulations related to drone use.
As you may already be aware, there is a complex array of loss exposures related to drone use, such as accidental injury, interference with other air operations, privacy issues, and workers’ compensation injury. We urge you to develop appropriate policy on the use of drones and compliance with proper FAA regulations. Public Entity Partners has developed a supplemental application to support your request for coverage. This supplemental application will be made available to PE Partner members soon.
Qualifications for PE Partner Unmanned Aerial Vehicle (UAV) Coverage:
- Less than 55 lbs. gross weight, including attached equipment;
- Operated by designated persons who meet all current FAA requirements and are trained in operation/regulations;
- Formal written policy for the operation of UAVs;
- Operated during daylight hours and only within line of human sight; and
- Operated under 400-foot altitude and not within 5 miles of an airport.
Since drone regulation is the domain of the Federal Aviation Administration (FAA), we suggest that members not attempt to regulate the use of drones in your communities, but refer to the FAA regulations for guidance.
More information on this topic will be made available to members in the near future.
Sewer Backup/Water Main Break No-Fault Endorsement — Liability Coverage
Public Entity Partners has had a no-fault sewer backup endorsement for some time, and this was recently expanded to cover water main breaks. The no-fault option waives the negligence aspects of the Tennessee Governmental Tort Liability Act (TGTLA), and pays for damage caused by any sewer backup or water main break, regardless of the member’s negligence. For some cities, having this coverage can create a commitment to cover all sewer backups that occur after a large weather event, including floods resulting from heavy rain. In these cases, it is possible for a member to incur expenses in excess of the $100,000 limit on the policy.
Effective July 1, 2016, there will be a second no-fault endorsement option that is identical to the original, except that it excludes backup related to a weather event. This option can help the member avoid commitments to large numbers of claims resulting from unusual weather. Ask your underwriter about this option, or check the block for excluding weather on your liability renewal application.
Punitive/Exemplary Damages Option ― Liability Coverage
Municipalities in Tennessee under the Tennessee Governmental Tort Liability Act (TGTLA) are not subject to punitive damage awards, but for cases that fall outside the realm of TGTLA, there is some exposure to such damages. This can include federal and out-of-state cases.
Public Entity Partners liability policy has historically excluded punitive damages awarded as a result of gross negligence of member personnel. In 2013, we added this coverage to the employment practices liability endorsement.
We now offer an option to add this coverage to the remainder of the liability coverage. The punitive/exemplary damages endorsement will change the definition of damages to include “punitive or exemplary damages, or the multiple portion of any multiplied damage award, to the extent such damages are deemed insurable in the jurisdiction applicable to coverage under this policy.”
The endorsement will broaden coverage to include such damages within the limits of the policy. The punitive/exemplary damage portion of any award will be limited to a sub-limit of $500,000.
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