Pay and Benefits Watch: Liability insurance Q&A

letters@govexec.com

Section 642 of the fiscal 2000 Treasury-Postal appropriations act (H.R. 2490), which President Clinton signed last month, changed only one word of federal law, from "may" to "shall." That tiny change could mean a savings of up to $146 a year for federal managers.

By changing that one word, Congress ordered federal agencies to provide reimbursement for half the cost of professional liability insurance for supervisors, managers and law enforcement officers. Previously, under section 636 of the fiscal 1997 Treasury-Postal appropriations act, agencies could provide the reimbursement, but did not have to.

The annual cost of professional liability insurance can be close to $300, depending on the type of coverage.

Agencies now have to budget for the additional expense, and managers and law enforcement officers need to consider whether they should purchase the insurance. Here's a question-and-answer review of some of the factors to consider:

What does professional liability insurance cover?

Professional liability insurance covers federal managers' or law enforcement officers' legal costs when defending themselves against allegations of wrongdoing while carrying out official duties. The coverage pays for lawyers' fees during criminal or administrative investigations up to $100,000 a year and covers payment of civil fines or penalties as long as the cost of the lawyers' fees plus the fines or penalties is below $100,000.

Do federal managers and law enforcement officers need the insurance?

The Justice Department provides legal representation for federal managers and law enforcement officers when the official is being sued for actions performed within the scope of his or her employment and the Justice Department determines it is in the interest of the government to represent the employee.

In a 1998 report, the Office of Personnel Management found that of the 7,000 requests for legal representation federal officials submitted to the Justice Department over the preceding five years, only 150 were rejected. Over the same period, only 14 federal employees were found personally liable for illegal actions performed on the job. In 11 of the cases, agencies indemnified the employees.

In 1998, 159 feds covered by professional liability insurance filed claims with Wright & Co., a Washington-based firm that provides such insurance, for help during administrative proceedings. About 170 filed claims for involvement in court cases. Most claims were awarded, but a handful were denied. Denials were usually made because an employee was accused of wrongdoing before he or she signed up for the insurance.

Professional liability insurance can also help officials get additional legal help even if the Justice Department decides to represent them.

Who is eligible for reimbursement?

Federal supervisors, management officials and law enforcement officers are eligible for reimbursement of half the cost of liability insurance (If you need a legal definition of those positions, "law enforcement officer" is defined under sections 8331(20) or 8401(17) of Title 5 of the U.S. Code, or under section 4823 of Title 22. "Supervisor" and "management official" are defined in section 7103(a) of Title 5).

How much does the insurance cost?

Wright and Co. offers the only professional liability insurance program specifically designed for federal officials. The company offers two policies. For $1,000,000 worth of liability coverage and a $100,000 legal defense provision, the premium is $292 a year. For $500,000 worth of liability coverage and a $100,000 legal defense provision, the premium is $229 a year.

How do you sign up for professional liability insurance?

Contact Wright & Co. at 1-888-412-7322 or at the the company's Web site, www.wrightandco.com. To receive reimbursement for half the cost of the insurance, you'll need to contact your agency's human resources office. For example, here is a link to the reimbursement policy at the National Institutes of Health.

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

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

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • 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.

    Download
  • 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.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • 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.

    Download
  • 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

    Download
  • 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.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

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