Managers rarely found liable in lawsuits

Federal managers are rarely found personally liable in lawsuits filed against them, according to a new report.

Over the past five years, only 14 federal employees were found personally liable in lawsuits brought against them in relation to their government duties, agencies told the Office of Personnel Management in a recent survey. In 11 of the 14 cases, agencies indemnified the employees. In one other case, the employee paid nominal damages of $1. In another, the employee's automobile insurance company paid the damages. In only one reported case did an employee pay damages.

"In most cases where the Justice Department makes a determination that the employee acted within the scope of the employee's duties and it is in the interest of the government to provide representation, employees are not liable for legal expenses or damages," OPM said in a report to the House Appropriations Committee. The committee required OPM to submit a report on federal officials' need for professional liability insurance this month. OPM surveyed agencies and compiled their responses into the report.

The Justice Department has received about 7,000 requests for representation from federal employees in the past five years. Justice rejected 150 of those requests, or two percent, the department told OPM.

In the fiscal 1997 Treasury, Postal and General Government Appropriations Act, Congress authorized federal agencies to reimburse managers and law enforcement officials for half the annual cost of professional liability insurance. So far, most agencies have decided not to offer reimbursement.

Some agencies, like the Defense Department, say they don't have the money to cover the reimbursement benefit. Others argue there is simply not a need for it.

"Since DoJ provides representation in most civil cases brought against federal employees in their individual capacity, and because there are relatively few instances in which judgment is against the employee, there appears to be no reason for the government to pay any portion of the cost of professional liability insurance for any employee," the Housing and Urban Development Department told OPM.

Fifteen agencies do reimburse managers and law enforcement officials for half of their professional liability insurance costs. They are the Agriculture, Education, Energy, Health and Human Services and Labor departments, Education's inspector general office, the Social Security Administration, the Federal Communications Commission, the Federal Emergency Management Agency, the Merit Systems Protection Board, NASA, the National Science Foundation, the Nuclear Regulatory Commission, the Office of Government Ethics and the Small Business Administration.

In fiscal 1997, just 141 managers and officials received the reimbursement, agencies reported to OPM. About 47,313 managers and officials were eligible to get it.

Agencies that offer the reimbursement say it only costs them about $130 a year to cover half of the typical premium, and that doing so improves morale.

The Nuclear Regulatory Commission said it "chose to reimburse qualified employees because in a highly complex and litigious environment, such employees who perceive a risk of being sued personally should be supported by the agency to help them reduce stress and perform their duties more effectively."

Wright & Co., a Washington insurance broker, offers federal officials a $1 million liability coverage and $100,000 administrative legal defense coverage package for a $266 annual premium. There is no deductible for the package. The Washington law firm Shaw, Bransford & O'Rourke represents managers and officials under the program.

G. Jerry Shaw, a partner in the firm and general counsel for the Senior Executives Association, is lobbying Congress to expand the liability insurance reimbursement program. At least 500 members of the Senior Executives Association carry professional liability insurance, according to Wright & Co. figures.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.