Public Entity Industry Challenges and Solutions

Public entities face a wide variety of challenges, including unique claims exposures, limited budgets, and a limited insurance marketplace. In this facilitated roundtable at RIMS 2023, industry leaders from the public sector shared their latest challenges and discussed potential solutions.

Panelists included:

• Mark Walls, Vice President of Client Engagement at Safety National (moderator)
• Tamika Puckett, Public Entity Division Leader at Willis Towers Watson
• Donna Jennings, Director of Risk Management at Metropolitan Atlanta Rapid Transit Authority
• Wade Damron, Director, Risk Management at State of Georgia, Department of Administrative Services

Liability Litigation Challenges

Liability has been one of the largest recent challenges that public entities face today.

The Metropolitan Atlanta Rapid Transit Authority (MARTA) handles litigations in house, becoming more aggressive, routinely performing mock trials for situations, which is something they began doing in response to past experience with large verdicts. They spend a lot of time investigating the facts to try to avoid the jury sympathy factor. They do use outside counsel for the largest trials. Auto liability is their largest exposure due to their fleet size, experiencing around 15,000 claims per year due to motor vehicle accidents.

The State of Georgia has two different components of their liability coverage for negligence-based exposures, then coverage to address federal incidents. They have a robust process to review any cases of $250,000, working with their TPA to determine how they want to address them.

Other challenges include:

• The insurance market has become challenging for public entities to buy coverage. In some cases, they often seek unlimited liability or extremely high limits, which is hard to place.
• Cities with no state tort caps, like the state of Illinois, see astronomical costs related to liability. Tort reform is needed in states with no tort caps.
• Now that COVID controls are lifting, trials are speeding up and schedules are extremely busy to address the cases going to court.
• Some plaintiff’s attorneys are looking for fame and do not want to negotiate settlements in lieu of pursuing nuclear verdicts. This makes it hard for them to be reasonable in accepting settlement offers.
• School districts are experiencing a dramatic influx in claims as the statute of limitations for sexual misconduct claims has been extended. This is sweeping, so if it has not happened in your state, it is likely to come.
• Public transit experiences “frequent flyers” that submit a regular cadence of claims. They are working to monitor situations with video and try to keep their approach to those claims decisions fact based.

Risk Management Strategies to Address Safety

• The use of apps for reporting is becoming more prevalent. Examples include a ‘near miss’ app that employees can use to report safety issues before they become larger issues.
• Many are transitioning their safety training to online platforms for more efficient and effective training.
• One tactic is to have employees complete an assessment, which produces a risk maturity score that assesses the overall impact and effectiveness of the organization’s risk management program.
• Do not forget that your insurance carrier offers risk management resources that public entities can take advantage of, which is helpful with small budgets.