Public Sector

Change is happening all around us today, accelerating uncertainties for all types of public entities:

• Essential frontline workers must operate in safe environments while many other employees transition to remote working;
• Resources are being stretched more than ever to meet the growing needs of our communities;
• Demands for social justice and enhanced cultural consciousness are now common themes requiring action from organizations;
• Climate change, increasing inflation, supply chain disruptions and aging infrastructure have put increased pressure on budgets and capital needed to protect public assets;
• Transition to a virtual workplace will increase cyber and privacy risk exposures across many platforms;
• Facilities will continue to be impacted by severe weather events and deteriorating building equipment and systems;  and
• Litigation will continue to rise, as stakeholders increasingly demand higher standards of service, support and protection.

However, against all these uncertainties, normal operations must continue and long-term strategies need to be created to safeguard against future risks and account for the “new normal”.

With so many evolving risks, our ability to develop new and competitive insurance market alternatives is an essential component, which allows you to effectively transfer risk out of the public sector and reduce volatility. There is no better partner than Marsh to stand beside you in the face of unforeseen challenges. Marsh acts as not only an insurance broker, but as a risk manager, and risk consultant.

The wide range of risks faced by public entities requires appropriate measures to prevent, mitigate, and transfer risk. While prevention is always the best approach, as it avoids an exposure and any subsequent impacts and damages, it’s not always possible. That’s why it’s also critical to create a plan to mitigate an exposure once it has occurred, as this will minimize  resulting impacts and damages. It’s also important to consider any opportunities to transfer the risk with the appropriate insurance solution.

It is important for public entities to have an insurance product specifically written for their sector.  While standard insurance products will afford coverage, entities operating in the public arena have unique exposures.  While the scope of services provided by public entities may differ, they will generally need to consider a few types of insurance to operate.

1. General Liability Insurance: Public entities needs to obtain general liability insurance, which protects the entity from the financial implications from claims of injury, harm or damage. 
2. Errors and Omission Insurance: Errors and omission coverage is required to protect board members, elected officials, and senior administration against claims of wrong doing.  Public entities have various legislated obligations and protections, which warrants a wording that fits their class of operations.  A generic policy may include the cost of coverage that is not required, while leaving gaps in coverage to adequately provide appropriate protection.
3. Property Insurance: As stewards of public funds, public entities are obligated to protect their assets.  Property insurance with clauses, such as the option to rebuild in a different location, protect the entities budget from unexpected costs due to natural or man-made events that causes damage to owned/leased property. 
4. Automobile insurance: Public entities need to obtain auto insurance for claims of injury or damage to another party’s automobile or property.  Many entities may choose to insure physical damage.

While the above are the core coverages that every public entity should carry; additional policies that are highly recommended include cyber, volunteer accident, environmental impairment, and depending on the nature of your activities, the entity may require directors and officers.

As public entities operate in a tightening fiscal environment, they continue to look for innovative ways to reduce their operating costs, including insurance costs. To that end, public entities can evaluate their loss history and consider adjusting their deductibles, perform an in-depth review of their coverage to ensure it fits their needs, and manage their risks effectively to prevent a loss from occurring or to mitigate further damages from a loss. This begins with identifying top areas of risk exposure and implementing the appropriate controls.

Risk advisors provide support to public entities in adopting a comprehensive approach to assessing, quantifying, and managing risk.  With deep industry insight, they can help prioritize current exposures and emerging risks. Risk advisors also can assist public entities in managing their bottom line through a diligent review of their total cost of risk. With specialized capability to collect and assess valuable data, risk advisors can raise attention to areas that are driving exposures.

In addition to Marsh Advisory, our dedicated Public Entity Risk Manager will will collaborate with you to identify and manage your risks through our end-to-end services. Specifically, our unique approach to managing your risk portfolio includes providing you with the following value-add services:

• Risk Management – Fundamentals: Establishing a systematic plan to instill fundamental risk management practices, which is supplemented with enabling services.
• Risk Academy: Advancing risk management acumen through knowledge transfer and professional learning and development.
• Risk Advisory: Utilizing deep technical expertise and industry insight to manage your most complex business risks.
• Program Advisory: Adopting a comprehensive approach to managing your risk profile to create value and strategic advantage.