Some federal agencies are beginning to reimburse managers and executives for half the annual cost of professional liability insurance, and the Senior Executives Association is pushing more of them to do so.
Under a law passed in 1996, Congress allows agencies to pay for half the cost of managers' professional liability insurance, which covers legal fees when charges are brought against managers in the normal course of their duties. The law also allows agencies to help law enforcement officials with their liability insurance. Lawsuits aimed at federal officials can come either from the public or from subordinates.
The Senior Executives Association fought for the 1996 law, and then SEA President Carol Bonosaro sent a letter to agency heads encouraging them to reimburse managers for half of their liability insurance premiums.
"Agencies assisting their managers, supervisors and law enforcement officials with the cost of this insurance, which has become increasingly necessary, are making a clear statement that they will back their supervisors, managers and law enforcement officials when they are under attack," Bonosaro wrote.
Eight agencies--Agriculture, Education, Health and Human Services, Labor, NASA, the Securities and Exchange Commission, the Social Security Administration and the National Science Foundation--along with the inspector general's office at Housing and Urban Development, informed Wright & Company, which offers liability insurance coverage to federal managers, that they now reimburse managers for half of their premiums.
Three agencies--Defense, Commerce and Veterans Affairs--said they would not reimburse managers, citing fiscal constraints.
Another nine agencies--Energy, Interior, Justice, State, Transportation, Treasury, the Environmental Protection Agency, the General Services Administration and the Office of Personnel Management--are still assessing the feasibility of reimbursements, SEA reports.
"Federal managers are vulnerable to having all sorts of complaints filed against them," said John Hopping, an insurance specialist at Wright & Company, noting that the government can decide whether or not to defend managers when charges are brought against them.
Wright & Company, a Washington-based insurance firm, charges federal managers a $266 annual premium for professional liability insurance. Agencies that have approved reimbursement cover up to $133 a year of that premium. Wright's liability insurance program includes $1,000,000 liability coverage and $100,000 of legal defense coverage.
The Washington-based law firm of Shaw, Bransford & O'Rourke provides legal defense under the Wright & Company program. G. Jerry Shaw, a partner in the firm who doubles as general counsel for the Senior Executives Association, said he is "working a strategy on the Hill" to push for greater agency coverage of liability insurance, though he declined to explain the strategy.
"Managers and supervisors need this insurance," Shaw said. "It ticks me off badly that agencies are willing to let their managers just hang out there."
The Office of Personnel Management does not provide guidance to agencies on the liability insurance issue. OPM is preparing a report on liability insurance coverage in the federal government, which will be sent to Capitol Hill next month, an OPM spokesman said.
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