Over the past few months, the world has changed as elected and administrative officials have addressed the impacts of COVID-19. This includes the loss of economic activity, reductions in revenue, and civil disturbance.
A featured coverage in most public sector insurance programs is public officials’ errors & omissions or management liability. This is a type of professional liability coverage is designed to protect against potential claims that may arise alleging wrongful acts, and errors or omissions on the part of elected or appointed officials, or administrative personnel. Historically, this coverage has primarily responded when an elected or appointed official acts contrary to sound governmental practices. The most common claims against public officials have arisen in six areas:
In each of these areas, significant claims have arisen, which in many circumstances are costly to defend and settle. The average public officials claim takes 3.5 years to close and has defense costs, exclusive of settlements, that average $470,000. Fortunately, an emphasis has been placed on disclosing conflicts of interest before key decisions are made, and not overextending promises to groups and individuals. Many organizations seek legal input or review prior to key decisions, to ensure that those decisions are not in violation of any local, state, or federal laws. As we continue to move into increasingly unfamiliar terrain, and organizational decisions are impacted by the effects of COVID-19, it will be worthwhile to review a few key points to help in avoiding public officials or management liability claims. In uncertain times, there may be outside factors that contribute to the difficulty of coming to a consensus with various groups. Many may experience additional pressure from the loss of revenue, demands for resources and services or to further political agendas. There may also be a great deal of misinformation or public outcry by those who seek to influence decisions, especially when there are heated emotions. When decisions are made in these circumstances, crucial steps may be missed in in the decision-making process. This may result in decisions that are not in the best interest of the greater community and contrary to sound judgement. This process can be made more difficult as many organizations are meeting electronically, which may not easily allow for input from all interested parties. During periods with challenging circumstances, it is crucial to allow expression from those that may have a different point of view, not just those that may be speaking the loudest or demanding the most. Since decisions may impact the organization beyond the current budget period, a broad cross section of community engagement allows for enhanced perspective and better overall decisions. The final point to consider is essential leadership. The COVID-19 pandemic causes many to feel the weight of an uncertain future. Winston Churchill faced his fair share of challenging moments during some of the darkest times in World War II, when the outcome was less than certain. He quoted Herodotus, the Greek Philosopher. “Adversity has the effect of drawing out strength and qualities of a man (woman) that otherwise would have lain dormant in its absence”. Public officials provide the leadership that will allow for our return to a more normal society, enriched by experience and greater understanding. Essential leadership guides individuals to strive to their higher selves in the interest of their communities and those that surround them. Comments are closed.
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