Franklin County To Lose Its Liability Insurance Coverage
Posted April 18, 2005
FRANKLIN COUNTY, N.C. — A string of recent mishaps and potential claims has cost Franklin County its liability insurance coverage. Now, county leaders must shop for other carriers or gamble on no coverage at all.
Franklin County spends close to $350,000 a year in insurance premiums to cover the liability of incidents, such as a recent mistaken declaration of death.
"It's really an unfortunate series of events," said Franklin County Commissioner Raymond Stone.
No matter Stone's description, St. Paul's Insurance Company considers Franklin County too risky for future coverage.
"It does not surprise me with the string of events that have happened," said Travis Shamel, an insurance agent who sells insurance to the government.
Shamel said Franklin County should be able to find higherhyphen priced alternatives or tap into an insurance pool with other counties.
Another possibility would be for Franklin County to drop insurance and use sovereign immunity, a state law that shields government from lawsuits.
One risk with sovereign immunity, however, Shamel said, is that immunity doesn't work in federal court.
"It's not an option I recommend, just purely from the standpoint the sovereign immunity only applies in North Carolina court," Shamel said.
"As an individual, I would not want to not be insured, but then I don't have that sovereignty that the state has," said Stone. "I want to look at this notion of sovereign [immunity] seriously."
Many larger governments, such as Raleigh, Wake County and Durham Countycomma gamble on sovereign immunity. They pay claims from taxpayer-funded accounts and hope to avoid big judgments.
Just in case, they often purchase excess insurance policies to protect against those claims.
Franklin County has until July to replace the current liability coverage.