Message from the President
At our February meeting, our board of directors instructed our staff to carry out the following regarding Public Entity Partners’s coverages, rates and dividends.
Inmate Medical Expenses Exclusion
Public Entity Partners is continually reviewing court opinions and decisions affecting its member insureds. In July of 2017, the Tennessee Court of Appeals issued two opinions regarding the use of county inmates on municipal work projects. In both cases, the court held that a county inmate injured on a municipal work detail is entitled to have his medical expenses paid during confinement, but nothing more.
Neither of the cases determined which entity (city or county) was responsible for the medical expenses. Tenn. Code Ann. § 41-2-123 allows county inmates to work on municipal work projects. However, Tenn. Code Ann. § 41-4-115 expressly states that it is the duty of the county to provide medical attendance for all prisoners confined in the county jail. Thus, it appears the county has the duty and obligation to pay medical expenses, even in cases where a county inmate is injured on a municipal work project.
In light of these recent court opinions and the statute indicated above, Public Entity Partners has reviewed its liability policy and is making changes accordingly. Beginning with the July 1, 2018 renewal cycle, Public Entity Partners’s policy will now exclude coverage for any medical expenses for any county inmate or other prisoner confined in a county jail/workhouse arising from any injury or illness received while on a municipal work project. It is important to note that this exclusion applies to all medical expenses, regardless of whether the city has executed an interlocal agreement indicating otherwise. Public Entity Partners will continue to provide litigation defense costs in these cases.
In the past, Public Entity Partners allowed members to endorse interlocal agreements onto the member’s policy in order to shift responsibility for medical expenses from a county to a city if the inmate was injured while on a municipal work project. These agreements essentially created a no-fault system for payment of these medical expenses. As a result, these agreements assumed costs above and beyond what cities were legally obligated to pay on behalf of county inmates. That practice is no longer effective as Public Entity Partners’s policy now excludes coverage, even if the member has agreed to assume responsibility in accordance with an interlocal agreement.
Catastrophic Medical (Cat Med) Expenses
Under the current liability policy, each insured has $1 million in coverage, per occurrence, for catastrophic medical expenses. The Cat Med coverage applies when an injured party’s reasonable, necessary and actually incurred medical expenses exceed 50 percent of the Governmental Tort Liability Act limits. Once applicable, the Cat Med then covers all reasonable, necessary and actually incurred medical expenses, up to the $1 million coverage limit.
Effective for policies entered into or renewed after July 1, 2018, the Cat Med coverage limits will be $500,000 per individual and $1 million per occurrence. Thus, if there is only one injured party, the Cat Med will pay up to $500,000 in medical expenses, but if there are multiple injured parties, the Cat Med will continue to provide up to $1 million in medical expenses.
We are happy to announce that, with the July 1, 2018 policy renewals, there will be no change in base rates.
A financial benefit of PE Partner membership is the return of excess dividends to members. While base rates impact premiums based on future anticipated losses, dividends are based on past performance.
Any surplus in excess of calculated thresholds is recommended to be returned to the membership in the form of a dividend credit, applied to the renewal invoices of qualifying members.
It is important to note that, since the dividends vary from year to year and are not part of the premiums charged for renewing coverage, they should not be counted as part of your entity’s budgeted insurance costs.
For the 2018-2019 fund year, Public Entity Partners’s board of directors has authorized a $5 million dividend, which includes $2,225,000 in workers’ compensation dividends; $2,285,000 in liability dividends; and $490,000 in property dividends.
Thank you for your business, and for our decades of stability and partnership together.
Dawn R. Crawford