2017 OhioPRIMA EDUCATIONAL CONFERENCE AND ANNUAL MEETING Insurance Issues and Developments Impacting Public Entities From Sharing of Resources to Legislative & Legal Updates 2017 OhioPRIMA EDUCATIONAL CONFERENCE AND ANNUAL MEETING

Disclaimer: Implementation of any practices suggested is at your sole discretion. Wichert Insurance assumes no liability to any party for any damages arising out of or in connection with the information. This information is a summary of complex issues and may not cover all the finer points of a specific topic. Accordingly, this information is not intended to be legal advice, which should be obtained in consultation with an attorney.

Tom Wichert CEO & Principal Wichert Insurance Tom is a third generation Wichert Insurance CEO, following both his father and his grandfather in the business since its founding in 1948. He has held key business, financial and operational leadership positions that have supported the Wichert family of agencies for more than three decades. Replace this photo with your own by going to Insert  Photo  Picture from File.

Rich Studenic Director of Claims Wichert Insurance Rich has over 25 years of experience in all aspects of claims including serving as a Regional Claims Manager for an Ohio‐based insurer that specializes in providing insurance to Ohio political subdivisions.  Replace this photo with your own by going to Insert  Photo  Picture from File.

1 Who is Currently Sharing Resources/Services

Expectation in Event of a Claim What Types Expectation in Event of a Claim

Common Types of Sharing Arrangements:   COGS: Dispatching, SWAT, Hazmat (entity is a political subdivision). Formal Agreements: Most mutual aid agreements between cities. Informal: Common when loaning vehicle or equipment.

2 Authority to Contract for Sharing Services/Equipment

Contracting for Services Between Political Subdivisions. ORC 9.482 (Effective 9/15/14): Contracting for Services Between Political Subdivisions.

(B1) When legally authorized to do so, a political subdivision may enter into an agreement with another political subdivision or a state agency whereby the contracting political subdivision or state agency agrees to exercise any power, perform any function, or render any service for the contracting recipient political subdivision that the contracting recipient political subdivision is otherwise legally authorized to exercise, perform or render.

(F) Chapter 2744. of the Revised Code, insofar as it applies to the operation of a political subdivision, applies to the political subdivisions that are parties to an agreement and to their employees when they are rendering a service outside the boundaries of their employing political subdivision under the agreement. Employees acting outside the boundaries of their employing political subdivision while providing a service under an agreement may participate in any pension or indemnity fund established by the political subdivision to the same extent as while they are acting within the boundaries of the political subdivision, and are entitled to all the right and benefits of Chapter 4123. of the Revised Code to the same extend as while they are performing a service within the boundaries of the political subdivision.

Mutual Emergency Management Assistance ORC 5502.29 Mutual Emergency Management Assistance or Aid Agreements.

(B) Political subdivisions, in collaboration with other public and private agencies within this state, may develop mutual assistance or aid agreements for reciprocal emergency management assistance or aid for purposes of preparing for, responding to, and recovering from an incident, disaster, exercise, training activity, planned event, or emergency, any of which requires additional resources, each political subdivision may render assistance in accordance with such mutual assistance or aid agreements. Such mutual assistance or aid agreements shall not in any manner relieve the chief elected official of any political subdivision of the responsibility for providing emergency management.

(J) Responding political subdivisions and the personnel of the political subdivision, while rendering assistance or aid under this section, or while in route to or from rending assistance or aid under this section, in a political subdivision in an adjacent state under an agreement authorized by this section, shall be deemed to be exercising governmental functions as defined in section 2744.01 of the Revised Code, shall have the defenses to and immunities from civil liability provided in sections 2744.02 and 2744.03 of the Revised Code, and shall be entitled to all applicable limitations on recoverable damages under section 2744.05 of the Revised Code.

(K) All pension, disability, death benefits, workers’ compensation, and other benefits enjoyed by personnel rendering interstate or intrastate mutual assistance or aid shall extend to the services they perform outside their respective political subdivisions to the same extent as while acting within the boundaries of the political subdivisions, an personnel are entitled to the right and benefits of Chapter 4123. to the same extent as while performing service within the boundaries of the political subdivisions.

Intrastate Mutual Aid Compact ORC 5502.41 Intrastate Mutual Aid Compact

1.) Personnel of a responding participating political subdivision who suffer injury or death in the course of, and arising out of, their employment while rending assistance or aid under this section to another participating political subdivision are entitled to all applicable benefits under Chapter 4121. and 4123. of the Revised Code. 2.) Personnel of a responding participating political subdivision shall be considered, while rending assistance or aid under this section in another participating political subdivision, to be agents of the responding political subdivision for purposes of tort liability and immunity from tort liability under the law of this state.

(1) Subject to division (K) of this section and except as provided in division (J)(2) of this section, any participating political subdivision rending assistance or aid under this section in another participating political subdivision shall be reimbursed by the participating political subdivision receiving the assistance or aid for any loss or damage to, or expense incurred in the operation of, any equipment used in rending the assistance or aid, for any expense incurred in the provision of any service used in rending the assistance or aid, and for all other costs incurred in responding to the request for assistance or aid. To avoid duplication of payments, insurance proceeds available to cover any loss or damage to equipment of a participating political subdivision rending assistance or aid shall be considered in the reimbursement by the participating political subdivision receiving the assistance or aid. (2) A participating political subdivision rending assistance or aid under this section to another participating political subdivision shall not be reimbursed for either of the following:

(a) The first eight hours of mutual assistance or aid it provides to the political subdivision receiving the assistance or aid; (b) Expenses the participating political subdivision incurs under division (H)(1) of this section. A participating political subdivision rending assistance or aid under this section may do any of the following: (1) Assume, in whole or in part, any loss, damage, expense, or cost of the political subdivision incurs in rendering the assistance or aid; (2) Loan, without charge, any equipment, or donate any service, to the political subdivision receiving the assistance or aid; (3) Enter into agreements with one or more other participating political subdivisions to establish different allocations of losses, damages, expenses, or cost among such political subdivisions.

Political Subdivision Tort Liability Definitions. ORC 2744.01 (Effective 9/4/2014) Political Subdivision Tort Liability Definitions.

(B) “Employee” means an officer, agent, employee, or servant, whether or not compensated or full-time or part-time, who is authorized to act and is acting within the scope of the officer’s, agent’s, employee’s, or servant’s employment for a political subdivision. “Employee” does not include an independent contractor and does not include any individual engaged by a school district pursuant to section 3319.301 of the Revised Code. “Employee” includes any elected or appointed official of a political subdivision. “Employee” also includes a person who has been convicted of or pleaded guilty to a criminal offense and who has been sentenced to perform community service work in a political subdivision whether pursuant to section 2951.02 of the Revised Code or otherwise, and a child who is found to be delinquent child and who is ordered by a juvenile court pursuant to section 2152.19 or 2152.20 of the Revised Code to perform community service or community work in a political subdivision.

ORC 2744.07 (A) (1) & (2): Provides for defense and indemnity of employee if act occurred while Employee was acting both in good faith and not manifestly outside the scope of employment or official responsibilities.

ORC 2744.07 (A) (1) & (2): Insurance language very similar in that it requires Employee be in scope of duties.

2744.11 Assumption of liability in shared equipment service agreements. If a shared equipment service agreement is entered into by a contracting lender state agency or political subdivision to lend its capital equipment to a contracting recipient political subdivision for the temporary use by the recipient political subdivision in the performance of a governmental or proprietary function, the agreement may provide that the recipient political subdivision and its officers and employees, as the case may be, assume any potential liability under this chapter in a civil action for damages for injury, death, or loss to person or property allegedly caused by an act or omission of the recipient political subdivision or its officers or employees resulting from the use of the equipment in the performance of the recipient political subdivision under the agreement or any of its officers or employees is engaged in the use of the equipment covered by the agreement in the performance of a government or proprietary function.

3 Example of Agreements

(H) Each cooperating Agency shall be responsible for any cost arising from responding to a call for assistance, unless the requesting Agency is reimbursed for such costs from another source. Further, in the event of loss of or damage to the Agency’s equipment or property while providing police assistance services with the jurisdiction of any other cooperating Agency, the assisting Agency shall not seek to hold the requesting Agency accountable on the basis of the request, but may do so if any other actions of the requesting Agency or its employees caused the loss or damage.

(1) The Initiating Agency shall, to the extent but only to the extent of its liability insurance coverage (including but not limited to any self-insurance or risk pool participation), defend and indemnify any Assisting Agency and its personnel against any claim, loss, damage, expense, cost attorney fees, or other liability asserted by any third party arising out of the conduct, acts or omissions of personnel engaged in Specialized Law Enforcement Operations. The minimum amount of insurance to be provided shall be one million dollars ($1,000,000). The initiating Agency, however, shall not have any obligation to defend or indemnify the Assisting Agency or its personnel to the extent they act outside the scope of lawful orders issued by the Initiating Agency or its designee, or to the extent that the Assisting Agency or its personnel willfully and maliciously cause injury or damage to person or property.

4 Insurance & Claims Issues in Contract:

Property Issues:  Ownership of property  Location of property stored or away from premises when damaged  Valuation method IM ˚ (ACV vs. RC)  Retention Levels (deductible)  Leased/rented coverage limit for contractors equipment  Working on others property not covered (agreement)

Vehicle Issues:  Loaned vs. Leased (hired/non-owned) physical damage limits  Physical damage coverage Deductible levels Liability coverage ˚ Permissive use – who’s driving ˚ Primary/excess ˚ Owner still involved

Other Insurance Clause Found in Most Commercial Policies:

Other Insurance (a) For any covered “auto” you own, this Coverage Form provides primary insurance. For any covered “auto” you don’t own, the insurance provided by this Coverage Form is excess over any other collectible insurance. However, while a covered “auto” which is a “trailer” is connected to another vehicle, the Covered Autos Liability Coverage this Coverage Form provides for the “trailer” is: (1) Excess while it is connected to a motor vehicle you do not own; or (2) Primary while it is connected to a covered “auto” you own. (b) For Hired Auto Physical Damage Coverage, any covered “auto” you lease, hire, rent or borrow is deemed to be a covered “auto” you own. However, any “auto” that is leased, hired, rented or borrowed with a driver is not a covered “auto”. (c) Regardless of the provisions of Paragraph (a) above, this Coverage Form’s Covered Autos Liability Coverage is primary for any liability assumed under an “insured contract.” (d) When this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess of primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering on the same basis.

5 Legal & Legislative Update

Joanne Moore, et al. v. City of Cleveland, et al. Court of Appeals of Ohio Eighth Appellate District County of Cuyahoga

Kenneth Pund and John Diezic v. City of Bedford, Ohio U.S. District Court for Northern District of Ohio

HB 267 132nd General Assembly Regular Session 2017-2018 To amend sections 2744.02 and 2744.05 of the Revised Code to eliminate certain defenses to political subdivision liability for an employee’s negligent operation of a motor vehicle and to reduce damages recoverable against a political subdivision in such actions by the contributory fault of the plaintiff or other parties.

HB 291 132nd General Assembly Regular Session 2017-2018 To enact sections 307.442, 505.604, and 701.02 of the Revised code to authorize counties, townships, and municipal corporations to purchase an employee dishonesty and faithful performance of duty insurance policy, instead of a bond, for protection from loss due to the fraudulent or dishonest actions of, and the failure to perform a duty prescribed by law by, an officer, official, employee, or appointee for which a bond is required by law.

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