Category: Government, Institutions, and Utilities
NAICS CODE: 921110 Executive Offices
921120 Legislative Bodies
921130 Public Finance Activities
921140 Executive and Legislature, Combined
921190 Other General Governmental Support
Description of Operations:
Municipal buildings provide office and meeting facilities for township, city, area, or provincial legislative operations. They often have auditoriums designed for large public gatherings or for political assemblies. Municipalities are run by a council, either elected or appointed, and provide a wide variety of services to their residents in exchange for tax dollars. These services may include planning and zoning, licences and permits, assessors’ and surveyors’ offices, courts, disease control, sanitation, road construction and maintenance, snow removal, and public protection such as police or fire departments. Some municipalities contract utility services, such as gas, water, or electricity, for residents within their geographical area.
Property exposure due to fire comes primarily from the wiring. Most offices and auditoriums have extensive wiring for lighting, computers and other electronic equipment. It must be in good repair and adequate for its use. Valuation concerns and the ability to rebuild with like construction and quality may pose significant problems in those buildings that have unique architectural or design. Smoke detectors are critical for early detection of a fire. Smoking should be prohibited. If there is a restaurant or cafeteria on premises, all cooking equipment should be properly protected. Garages for storing, fueling, and maintaining vehicles must be separated from office facilities. Governmental facilities may be a target for political activists or for terrorists. Adequate security is required, and disaster recovery plans in place to continue operations in the event of a large loss.
Crime exposure is from public officials’ dishonesty, employee dishonesty, and money and securities. Background checks, including criminal history, must be completed on all employees. Money received from taxes, fees, fines, and penalties must be properly received and disbursed. Regular deposits must be made. Money should not be left on premises overnight. There must be regular audits, preferably by an outside firm. All employees must take at least one complete week vacation every year. If the facilities have offices to collect fees, penalties, or obtain permits and licences, there may be an exposure to hold up.
Crime exposure is from Employee Dishonesty and Money and Securities. There must be controls to monitor all cashiers through surveillance and cash register tapes. Background checks must be place for all bookkeeping with regular audits and separation of duties. Hold up controls at the lots is best controlled by frequent pickups and deposits.
Inland marine exposures are from accounts receivable, audio/visual equipment, computers, contractors’ equipment, fine arts, and valuable papers and records. All records should be duplicated and retained at an off-site storage facility. Contractors’ equipment may be used off-premises to build, maintain, or service municipal streets and roads. If any owned equipment is used or taken off-premises, the exposure to such loss increases. Fine arts such as statuary and paintings, artifacts, historical documents, rare or historical books, or manuscripts all pose significant risk management concerns as they may be one-of-a-kind and irreplaceable. If insured, valuation should be done by a qualified appraiser. Valuable papers and records are often delicate and must be protected from fire, water damage, vandalism, theft, or other losses.
Public officials’ liability exposure can be severe. Today’s political climate has seen an increase in lawsuits against public officials for failure to perform the functions of their office, failure to account for tax funds, failure to enforce regulations, failure to follow mandated procedures, such as open bidding on contracts, bad faith, and other errors or omissions. Defense costs can be prohibitively expensive.
Automobile exposure can be high if vehicles are used to transport public officials, guests, and visitors. MVRs must be ordered regularly on all drivers. Training and prior record of drivers, as well as condition and maintenance of vehicles are the main items to consider. During inclement weather, drivers may be on the road for extended hours in adverse conditions. Supervision is necessary so drivers can be rotated and not become overly fatigued. There may be a high Non-owned auto exposure if employees use their own vehicles to run errands or attend meetings on municipal business. Employees should carry personal automobile insurance with adequate liability limits.
Workers compensation exposures are varied, from office workers to volunteers, janitorial staff, building or yard maintenance workers, repair personnel, and drivers. Some operations expose workers to back injury, hernia, slips, falls, strains, or sprains. Workers may be exposed to skin or lung irritants, infectious disease or occupational injury. Appropriate safety equipment may be required for some operations.
Minimum recommended Insurance coverage for municipalities:
Building, Business Personal Property, Employee Dishonesty, Money and Securities, Accounts Receivable, Audio/Visual Equipment, Computers, Contractors’ Equipment, Fine Arts, Valuable Papers and Records, General Liability, Public Officials’ Liability, Cyber Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto, Workers’ Compensation
Other Insurance coverage to consider for municipalities:
Computer Fraud, Dishonesty, Disappearance and Destruction, Employment Practises Liability, Business Auto Liability and Physical Damage, Stop Gap Liability