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The General Liability Trust Fund was established
October 1, l984, 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.
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 (and address)
Name of Person to receive the Certification and Schedule
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 August 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 1st.
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 7. Clerical workers are the least likely to be sued or to incur liability
and, therefore, have an index of 1. 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 include 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 ATTORNEYS 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: Claims Manager
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).
Each Department is responsible for initiating internal procedures to accomplish
this task.
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 whom 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
Claims Manager 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, 11 South Union Street, 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 Claims Manager.
CLOSING OF 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, 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
77South Lawrence Street
P.O. Box 303250
Montgomery, AL 36130-3250
Attn: Claims Manager
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
system, 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 Claims Manager 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 an occurrence is
judicially determined to be two or more occurrences, there is an aggregate limit
of $1,200,000 for those occurrences.
What if I have other liability insurance?
Some doctors, dentists, nurses, etc. have liability coverage other than the
Fund. The Fund coverage is excess. The primary carrier should be notified
immediately upon service of suit papers. If the cost of
a liability insurance policy was paid for or reimbursed by the State, there is
no coverage by the Fund.
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
Fax number (if available)
Job Codes
Job Classifications
Number of people in each classification
Total salary dollars paid for the class
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