General Liability Trust Fund

What is it?

The General Liability Trust Fund was established October 1, 1984, to provide liability protection for state employees acting in line and scope of their job requirements. Like the SIF, the GLTF operates much like an insurance company. However, it does not provide insurance but administers statutory fund benefits. The fund benefits also include protection for employee liability for operating an automobile on state business.

Requesting Coverage

New requests for coverage must be in writing and addressed to the Risk Manager. Please include:

  • Name of your agency
  • Copy of your enabling legislation
  • Street address
  • Mailing address (if different)
  • City, State, Zip
  • Phone number
  • Fax number
  • Job Codes
  • Job Titles
  • Total number of people in each classification
  • Total annual salaries in the each classification
  • Effective date
  • Name of the Director
  • Name of Person to receive the invoice (include mailing and email addresses)
  • Name of Person to receive the Certification and Schedule (include mailing and email addresses)

We recognize that changes in personnel will occur during the year. We will provide coverage for replacement personnel at no additional charge, but additions and deletions to staff should be reported and premiums paid based on the prorated amount for the rest of the fiscal year. Once the above information is received an endorsement will be produced and mailed to you. Keep this document with your insurance papers.

Certification of Employees

An employee certification is mailed in May and should be returned to DORM by the requested date.

Make any necessary changes (number of people in classification, job title, job code, total annual salaries for each classification), have the department head approve, sign, and notarize. Return the original to our office. A General Liability Employee Schedule will be produced with an invoice and mailed to you. Payment is due on October first.

If for any reason you feel an index is inaccurate, or you have a question about how the index for a particular job evolved, please call us.

Schedule of Employees

The Schedule of Employees represents the number of people working in classifications within your agency, liability index, and premium for each classification. Keep the schedule, certification, and any endorsements together with a copy of the Program Guidelines.

Liability Index

The liability index provides equity and fairness of coverage cost allocation by equating likelihood of loss arising from a job position with the rate charged.

The higher the liability exposure, the higher the liability index. For example, persons with arrest powers and persons carrying firearms have a liability index of seven. Clerical workers are the least likely to be sued or to incur liability and, therefore, have an index of one. Additionally, higher indexes may be created from time to time for extraordinarily hazardous jobs.

Certification of Watercraft

The GLTF Guidelines were revised October 1, 1992 to include liability coverage for state employees arising from the ownership, operation, use, loading or unloading of any watercraft less than 26 feet in length on a blanket basis.

We can facilitate coverage for watercraft of 26 feet or more on a specific basis at your request. However, coverage is not automatic as we must coordinate with our reinsurers and there may be additional costs.

Reporting General Liability Claims

The Program Guidelines outline the Notice requirements and other areas pertinent to claims.

Section 5. Notice

In the event of an Occurrence or Accident every Covered Employee shall be responsible for providing written notice as soon as practicable to the Risk Management Division, Finance Department, Montgomery, Alabama 36130-3250. This includes, but is not limited to, particulars sufficient to identify the Covered Employee and other information with respect to the time, place and circumstances of the Occurrence or Accident, the names and addresses of the Persons alleged to be injured or property damaged, all available witnesses and any reports of internal investigations of the Occurrence or Accident.

Section 6. Suits or Demands

If a claim is made or suit is filed against any Covered Employee, the Covered Employee shall immediately forward the original suit papers or other appropriate documents to his Department Director. The Department Director shall then immediately forward a copy of suit papers, internal investigative reports, incident reports, and other similar documents, including any demand, notice, summons or other process received by the Covered Employee to the Risk Management Division, Finance Department, Montgomery, Alabama 36130-3250, with a copy to the Attorney General pursuant to §36-1-6.1, Code of Alabama 1975.

Internal procedures may vary from agency to agency, but the basic facts to be reported include the name of all defendants and their employer (agency), the name of the plaintiff, the date of loss, a brief description of the loss, the names of any attorneys, and any other insurance coverage that is applicable.

Litigation Management Guidelines for Deputy Attorney General

Each Department is responsible for reporting losses to the Division of Risk Management. This is accomplished by completing the Proposal to Defend and forwarding a copy to the Fund. The Department is responsible for initiating internal procedures to accomplish this task.

Any incident that may lead to litigation should be reported immediately!

Early Litigation Procedure

Upon receipt of a case in which you represent a defendant who is a covered employee under the General Liability Trust Fund, you should acknowledge the assignment and provide an early case evaluation within 30 days. The evaluation should contain the style of the case, civil action number, GLTF claim number, and what parties you represent.

This report should provide an early opinion of liability, damages, and defenses; contain counsel's theory of the case and outline procedures to be followed in furthering that theory; detail suggested discovery procedures; identify serious issues for trial; recite the need (if any) for investigation; and, when needed, discuss settlement potential and possible jury verdict ranges.

All correspondence should be directed to:

Department of Finance
Division of Risk Management
General Liability Trust Fund
777 South Lawrence Street
PO Box 303250
Montgomery, Alabama 36130-3250
Attn: GL Senior Claims Representative

Status Reports

Every defense attorney will report the status of every active covered claim to the Claims Manager on October 1, January 1, April 1, and July 1. Please follow the format in the appendix or as outlined above (Early Litigation Procedure)

Expenses of Litigation

All payments made by the Fund must meet State Comptroller requirements. The following are acceptable guidelines under which the General Liability Trust Fund will pay for expenses incurred by Deputy Attorneys General in defending covered employees:

Routine Litigation Expenses. These include court fees/costs, travel (on same terms as apply to all state employees), depositions and other costs incident to discovery. Requests for payment of such expenses will first be approved by the managing attorney, who will determine whether they are reasonable and necessary to the defense of covered cases. Those expenses marked "approved" and signed by the managing attorney will then be forwarded to the Fund. Expenses not so approved will be the responsibility of the agency for which the covered employee works.

Expert Witnesses. Request for payment by the Fund of the fees and expenses of expert witnesses should be submitted in advance to the Fund and the managing attorney along with a written justification which includes the name, qualifications, and estimated fees and expenses of the expert. Fees and expenses of expert witnesses may be prorated between the Fund and the state agency if the agency is also a defendant. A copy of the contract between the expert and the state agency must be provided for the Fund's file.

Seminars, Publications, etc. Requests for payment by the Fund of costs involved in sending deputy attorneys general to seminars, or for purchase of law books, research materials, etc., will be considered by the Fund on a case by case basis. No such request will be approved unless the expenditure directly relates to defense of covered cases.

Settlement Negotiations

All settlement offers from the plaintiff and all proposed settlement offers on behalf of the covered employee should be forwarded to the GL Senior Claims Representative accompanied with your opinion and advice regarding the advisability of the offer. A copy of any settlement discussion should be sent to the Office of The Attorney General, 501 Washington Avenue, Montgomery, Alabama 36130.

Fees and Expenses

All requests for appointment of Deputy Attorneys General who are private sector lawyers are to be sent to the Attorney General with a copy to the General Liability Trust Fund. When the Department is notified of such appointment, they are to notify the Fund.

After a private sector Deputy Attorney General has been appointed to assist in a case, and questions arise as to payment of his/her fees and expenses of Deputies by the Fund, those questions should be directed to the GL Senior Claims Representative.

Closing a Case

When a case is closed, the GLTF is to be advised in writing so that the file maintained by the Fund can be closed.

Frequently Asked Questions and Answers About The General Liability Trust Fund

Who is covered by the General Liability Trust Fund?

Under '36-1-6.1, and the Guidelines of the Fund, employees and agents of the State of Alabama, and individuals serving as foster parents or adult foster care providers licensed or approved by the Department of Human Resources, and retired licensed physicians and dentists while volunteering at free health care clinics are eligible for coverage. The word "employees" includes both merit system and contract employees providing a premium has been paid for each. The statute specifically excludes educational institutions and boards from coverage, and the guidelines exclude employees of the State Docks Department. Also not eligible for coverage are independent contractors.

Should Risk Management be informed only after a lawsuit is filed?

No. Any incident which could conceivably lead to the filing of a lawsuit against a state employee should be reported. The back side of the Proposal to File, or Defend Civil Action form may be used to report the incident. Early settlement of a serious problem could save the State great expense, and if Risk Management has knowledge of a problem we can assist in preventing future similar mishaps.

What should be done when an employee is served with a lawsuit?

The employee should immediately forward the original suit papers to the Director of his/her Department, who should then immediately forward a copy of suit papers, internal investigative reports, incident reports, etc., including any demand, notice, summons or other process received by the Covered Employee to:

Finance Department
Division of Risk Management
777 South Lawrence Street
P.O. Box 303250
Montgomery, AL 36130-3250
Attn: GL Senior Claims Representative

with a copy to the Attorney General pursuant to '36-1-6.1, Code of Alabama 1975.

What pointers can you give the departmental attorneys to assure the maximum efficiency in processing GLTF claims?

Complete the Proposal to File or Defend as completely as possible, legibly, with each defendant's correct name, social security number, job code, title, and where he works - location or section. We enter the information into our computer, and then circulate the Proposal to File or Defend and the lawsuit within DORM for a coverage determination which will be either "covered," "not covered," or "handle under reservation of rights." Generally, the coverage letters to the defendants are forwarded to the managing attorney for distribution to the defendants. Since DORM maintains an open file until notified of closure by the managing attorney, it is important that the Risk Manager and GL Senior Claims Representative be kept informed of file developments.

Is there an insurance policy that states all the conditions of coverage?

The Fund is not insurance, but a fringe benefit for State employees. There is no insurance contract or policy, but there is a set of written guidelines which is similar to an insurance policy that sets out conditions of coverage. A copy can be obtained from the Division of Risk Management.

Will the Fund cover any judgment returned?

No. The Covered Employee is responsible for any amount in excess of the limits.

What are the limits of coverage?

The limits are $1,000,000 per occurrence, regardless of the number of claimants or the number of employee/defendants. This amount also includes all defense costs paid by the Fund. In the event that a single occurrence, as determined by the Risk Manager, is later judicially determined to be more than one occurrence, the limit is $1,200,000.

What if I have other liability insurance?

Some doctors, dentists, nurses, etc. have liability coverage other than the Fund. If the premium for the professional liability insurance policy was paid or reimbursed by the State of Alabama, there is no coverage under the GLTF.

After suit papers are forwarded to Risk Management, how will I be notified of coverage?

The complaint will be reviewed and it will be determined whether the employee is (1) covered, (2) not covered, or (3) will be defended with reservation of rights until coverage can be determined. A letter stating which of the above is applicable will be sent to the employee and to the attorney appointed by the Attorney General.

What does "defend with reservation of rights" mean?

If the wording of the complaint makes it unclear whether the allegations are covered or not covered, the Fund will pay for defense costs until it can be determined whether the allegations are covered or not covered. If found to be not covered, the Fund has reserved its rights to withdraw defense and indemnity.

If I am sued, will I be provided with legal representation?

Defense attorneys in covered cases are appointed by the Attorney General. Generally these attorneys are employees of State departments or the Attorney General's Office, but they sometimes are lawyers in private practice, in which case their fee will be paid by the Fund. A covered employee is, of course, free to hire his own attorney, at his own expense, if he chooses to do so.

What procedures are required for settlement of a claim?

Settlement is a joint responsibility of the Attorney General and the Division of Risk Management. The Fund must be notified of any offer of settlement. The Attorney General is the approving authority for all settlement terms except the payment of money from the Fund, which is done under the authority of the Director of Finance. Written authorization by the Fund is required before there can be acceptance of a plaintiff's settlement offer, or before an offer of settlement can be made by the defense, and the Attorney General must approve a settlement of more than $25,000. After authority to settle has been granted by the Fund, a written settlement agreement which states the amount to be paid by the Fund must be signed by all parties (or their attorneys) and approved by the Attorney General.

How is the premium calculated?

The rate is based on the job classification. The liability index corresponds to a rate. That rate will be multiplied times the number of people in that classification per agency.

Our department has hired ("x" temporary employees) ("x" new employees), that we want to cover under the Trust Fund. How do we do that?

A prorated invoice can be issued for these additions. Supply DORM with the effective date and expiration date of employment, the job code, the job classification, annual salaries, and the number of people being added. Report this information to the underwriting section of Risk Management.

Our department needs more than one invoice. Can you provide more than one invoice?

Yes. If your agency must have separate invoices for different divisions, you will need to furnish us with the following information for each invoice requested:

  • Name of the division mailing address for the invoice
  • Contact person telephone number, email address
  • Fax number (if available)
  • Job Codes
  • Job Classifications
  • Number of people in each classification
  • Total salary dollars paid for the class