In addition to a global pandemic and numerous natural disasters, public entities are now experiencing an increase in mega claims (awards greater than $1 million). As a public sector administrator, this means you now manage stresses from increased litigation, inadequate public funding and pressure to reduce costs. New exposures continually emerge and your liability coverage is more critical than ever.
Managing Risk in the Public Sector
Although your public entity is often legally protected (e.g., state liability capacities, immunity defenses, early reporting requirements), laws are continually changing.
Newer trends and exposures for public entities include:
- Violent events
- Employment practices liability (EPL)
- Fleet management
Public sector employees face unique risks. The Bureau of Labor Statistics recognizes a local and state government workers’ rate of injury is significantly higher compared to other industries. Shockingly, nearly a third of active shooter events happen at school or government locations. Review our Steps to Creating a Crisis Management Plan to establish or improve your organizational strategy.
Outdated technology and funding deficiencies make schools and local government entities popular ransomware attack targets. Recently, hackers have been influenced by the pandemic to pose as public sector entities (e.g., Centers for Disease Control, Internal Revenue Service) to gain network access. This imposes additional liability upon your public entity and additional responsibility to protect your community’s private information when evaluating protection options.
The Cybersecurity Infrastructure Security Agency (CISA) estimates that ransomware attacks cost nearly $6 trillion annually. Your budgets could be severely affected by an attack. For example, the City of Atlanta, Georgia spent over $1 million rebuilding its computer network following a SamSam ransomware attack. Our article, 5 Cybersecurity Threats to Manage in 2021, can provide you more insight on trending cyber risks.
Your public entity should be proactively planning for how to adapt to the new “normal” and support your community. Considerations include:
- Setting guidelines to reopen
- Restoring economies
- Complying with local, state and federal executive orders
- Monitoring employee and public health/safety
- Developing upcoming school year plans and policies
Employment Practices Liability (EPL)
Your public entity could be at risk for key EPL concerns, including age discrimination, harassment, wrongful termination and failure to promote. In 2019 alone, the Equal Employment Opportunity Commission (EEOC) filed 72,675 workplace discrimination charges against both public and private entities. Nearly $346 million was secured in monetary benefits for victims.
The pandemic has also put your organization at greater risk for EPL threats. Claims have included unsafe working conditions, lack of precautionary measures, disability discrimination and COVID-19 employee leave. Check out Common Employment Practices Claims Arising from COVID-19 for more EPL trends from the pandemic.
According to the U.S. Department of Transportation’s Highway Statistic Series, there are over 8 million publicly owned and operated vehicles in the U.S. alone. With that many vehicles on the road, distracted driving, impaired driving and a critical shortage of experienced drivers are just some of the factors increasing your public entity’s risk of accidents, claims and related costs. Your risk management advisor can provide fleet management strategies to help promote safety, minimize exposures and reduce costs.
We're Here to Help
The most important factor to consider when managing liability coverage is the true cost of risk. Under pressure to cut budgets, you may be drawn to select the lowest premium possible. However, immediate savings often lead to an elevated total cost from uncovered claims or uninsured exposures.
It is crucial to design a comprehensive plan in order to lower your total cost of risk. Connect with a member of our team today for more information on current and upcoming risks for the public entity industry and how to mitigate your exposures.