Public officials make life-changing legal decisions regularly. While they may do so with good intentions and the best information they have at the moment, there’s still a risk of unforeseen consequences to the average citizen. A lawsuit can be devastating to not only the entity implementing the decisions but also the individuals enforcing them. Fortunately, you can offer protection with public officials liability insurance.

Public Officials Liability Insurance and Decision-Making Risks

When municipal employees act in an official capacity, most of the risk falls on the institution. However, even if lawsuits only name the agency, the results can be devastating.

First, the institution has to muster a legal defense, sapping resources from daily operations and putting a financial strain on the agency. If taxpayers fund the department, it may not be able to recover those funds through profits and other avenues like a commercial business would.

A legal battle can also damage an agency’s public reputation, even if it wins the lawsuit. Low trust means voters may reject future bills to increase funding or call for restrictions on the institution’s authority.

Public officials liability insurance can help departments recover from this fallout. In addition to paying legal expenses, this type of policy is an essential tool in government entities’ crisis management toolbox.

Legal and Regulatory Compliance

Because public officials are authority figures, they have legal obligations to ensure proper use of their power. The following are a few compliance risks they face:

• Not protecting public trust
• Inappropriately denying or approving zoning requests
• Improperly denying or granting permits, licenses, and franchises
• Misusing public funds
• Discriminately dismissing, disciplining, or promoting employees

These missteps can lead to disciplinary measures for individuals, dismissal from their positions, and even litigation.

Ethical Considerations and Public Trust

Taxpayers expect decision-making to be a fair process. There should be no way to cheat the system; all rulings should follow an objective review process. Questions about the integrity of one administrative system can easily undermine others.

Public officials liability insurance handles the logistics of a lawsuit so agencies can focus on rebuilding public trust. A policy can also cover invaluable public relations services to assist with this aspect.

Legal Challenges and Litigation

Municipality residents can raise legal challenges if they feel public officials’ actions infringed on their civil rights. For example, suppose someone makes a satirical social media post pretending to be the local police chief, and the police arrest the individual for impersonating a police officer. In that case, the poster can claim a violation of First Amendment rights.

The right policy can help agencies fight such lawsuits. For example, it can pay for a settlement, allowing officials to avoid a drawn-out, expensive battle.

Public Officials Liability Insurance as a Risk Management Tool

Public officials will always face risks in decision-making due to the broad scope of the effects. Harm to individual and governmental reputation, financial strain, and legal challenges can interfere with conducting daily business. However, insurance agents can assist by offering public officials liability insurance as a proactive risk management tool. Contact PGUI to learn more.

About PGUI

Professional Governmental Underwriters, LLC., is a full-service risk management company dedicated to assisting public, educational, and non-profit entities in the management of their professional liability exposures, including educators liability insurance. We are dedicated to providing state-of-the-art professional underwriting management and loss control advisory services on behalf of our designated carriers. For more information, call us toll-free at (800) 586-6502.