Unfortunately, as this is written, 31 states are seeing increases in Covid-19 cases as the Summer of 2020 is just beginning. 15 states are steady and only 4 are seeing declines. This past weekend alone, Florida and Texas recorded their highest case numbers yet since the onset of the pandemic. Although California was the first state to shut down early in the pandemic, theirs and most, if not all of the leaders of the others that are now spiking, expressed beliefs that early re-openings were safe and thus, they proceeded reopening accordingly.
What happens when their constituents allege rightly or wrongly that they got it wrong? Wrong meaning that they reopened too soon or allege that they shutdown improperly or reopened improperly? Or that they infringed on their constituents’ rights (pick one or more)? And on, and on. I am not saying any of them necessarily did anything improper. I am speaking to the inevitable allegations that may arise through the plaintiffs’ bar during the aftermath. Courts will eventually determine what negligence, if any occurred and by whom.
Clearly the leaders of each state and locality and each school district, and I am restricting this discussion to states and localities and not the Federal government, have been in a bind since the outset of the pandemic. Shutdown orders came from the governors, administered locally in counties across the US. The economic fallout that has caused mushrooming unemployment and a cascade of bankruptcy filings has also increased state and local expense burdens while, at the same time, caused depressed tax revenues placing each jurisdiction in precarious economic situations.
School districts across the country must attempt to fulfill their missions, primarily education, but they also are acting increasingly as supplemental nutrition sources for stressed communities. Future allegations against school boards and administrators of so called “failure to educate,” if remote learning fails, or for failure to provide safe environments, if re-opened improperly are conceivable.
What happens when the dust settles and this pandemic passes, as it inevitably will? What so called “wrongful acts” will be alleged against the public entities and officials for perceived missteps to this point in time and through the conclusion of the public health emergency?
Many insurance experts are now discussing the increased risks facing those entities and officials. Those increased exposures range from increased workers’ compensation costs to increased exposure to allegations of errors or omissions in administration by the public officials themselves. In other words, allegations of professional malpractice by the public officials themselves. Workers’ Compensation is mandatory, although many public entities are self- funded and are facing severe increases in Excess Workers’ Compensation costs. Those that are still insured or are in state funds are likewise facing increased expense.
It should be noted that many such public entities are uninsured, self- insured or effectively so with large self- insured retentions or deductibles. Many that are insured for property & casualty are in cooperative, captive or group insurance arrangements, many of which are experiencing capital stress and increased reinsurance costs.
Many such communities do obtain “errors and omissions” insurance for their public officials. For school boards, it is sometimes referred to as School Leaders Errors & Omissions, for others such as county boards of supervisors, town or city councils, public pension associations, etc., Public Officials Liability or Public Officials Errors and Omissions coverage may be in place. Some such policies are better than others. Some may or may not provide adequate insurance protection for public officials.
I could continue this discussion on and on, however, let’s conclude today with this. Although probably low on the list of priorities for community leaders during the pandemic, it would be a good personal and professional risk management priority for them to check out the health of their insurance protection as it may or may not adequately protect them as they may hope or expect. Check out the major Business Interruption coverage disputes for all of those closed businesses shut down by order of public authority.