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THE POLICY MANAGEMENT FUNCTION
DORM is charged with assuring that insurance purchased by the state is:
- Acquired at the lowest reasonable cost
consistent with expected quality and service.
- Purchased in a competitive, fair manner.
- Provided by competent and financially
secure insurers.
DORM will manage the purchase
process, payment of premiums, policy contract terms, policy coverage changes,
and claims handling. Policies with premiums in excess of $7,500 must be
competitively bid by DORM.
FLOOD INSURANCE
All State Agencies, Departments and School Systems are encouraged to purchase
flood insurance if their locations are on flood plains.
Flood damage is not a covered peril under the State Insurance Fund policy.
A December 1988 release from the
Federal Emergency Management Agency (FEMA) states that previously
"recipients of Federal disaster assistance have not been penalized for failing
to insure their flood prone facilities prior to a major flood disaster."
However, in May of 1989, the "first-bite free" concept was eliminated. In other
words, if your facility is located in a flood plain area and you experience
damage from flooding, FEMA will reduce your assistance funds by the maximum
amount of insurance proceeds which would have been payable had your facility
been covered by flood insurance.
If you are interested in obtaining flood insurance for your facility, please
follow these steps:
1) Contact your County Engineer's office and obtain the flood zone (A, B, C) of
the location you wish to insure along with the community number.
2) Call our office at 223-6120
and provide the name and address of the facility as well as the flood zone and
community number. With this information, DORM can secure a premium quote. The
agency may require completion of a flood application and elevation certificate
depending on the flood zone of the facility you wish to insure.
At the renewal of your flood policy, the flood insurer will send you an invoice.
You should immediately forward the invoice to our department for our stamp of
approval. We will send it back to you so that it can be processed through the
State Comptroller's Office.
A 30 day waiting period applies before flood coverage is effective. With the
purchase of flood insurance, you will not only be protecting your facility but
may also avoid large reductions in future disaster assistance.
BLANKET FIDELITY AND
DISHONESTY BOND
The Blanket Bond covers the following:
EMPLOYEE DISHONESTY
Employee dishonesty coverage reimburses the state for money or securities lost
through dishonest acts of state officers, employees or agents. The exposure to
loss through employee dishonesty is significant. Coverage is provided for the
dishonest taking of State funds or other intentional dishonest acts that cause
financial loss. The limit is $1,000,000 per occurrence.
Like any insurance, there are certain loss areas not covered by our dishonesty
coverage. For example:
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Mysterious
disappearances.
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Accounting errors without proof
of dishonesty.
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Loss of money or property
belonging to employees.
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Losses already covered by other
insurance.
PUBLIC OFFICIAL BOND (FAITHFUL
PERFORMANCE)
This bond provides the necessary dollar limits to meet statutory requirements
for all employees of the State of Alabama.
NOTARY PUBLIC BOND
This bond provides the necessary dollar limits to meet statutory requirements
for all notaries public of the State of Alabama.
ADMINISTRATIVE OFFICE OF COURTS
Robbery coverage, inside and outside, is provided with limits as scheduled.
CIVIL AND CRIMINAL PROSECUTION
We also exclude any losses for which you tell a suspect he or she will be
released from liability. This is important: You do not have the authority to
forgive employee crimes.
Trying to do so could make you liable. So, who does decide whether to prosecute?
The state's district attorneys do. Their decision is based on the law and the
evidence.
When we pay for a loss, we acquire the agency's right to collect from the
offender. We pursue civil action to collect for stolen money, property or
services.
RISK CONTROL
Our coverage does not take the place of risk control. Of course, managers trust
employees. Most people are honest or this type coverage could never be provided.
But, we all should still install controls. Controls protect against loss by
making it clear that theft will not remain hidden. Controls protect us all from
the accusations when thefts occur.
Cash: Cash transactions should always be discouraged because the payor
has no receipt or proof of payment and the receiver must be ever alert to avoid
loss of these funds. The time and effort required to effectively safeguard cash
is exorbitant. At best, the guilty employee is caught and dismissed. This is
still a lose, lose situation.
Checks: Stamp "for deposit only" to the proper account immediately upon
receipt. Cost of reproducing lost or stolen checks can be expensive and time
consuming.
Require double signature on checks issued for payment of accounts other
than those issued by the Comptroller's office.
Negotiable marketable items: Keep secured at all times with regular
inventory procedures in place. Reconcile accounts on schedule. Routinely switch
employees around that perform these functions.
AFTER A LOSS
If you find a loss apparently caused by employee dishonesty, take three steps:
First, talk it over with your attorney. Make no exceptions. Until you
have that talk: Do not contact the police; Do not let anyone interview or demand
an explanation of the employee; And, do not start any personnel actions.
Second, promptly report the loss to us (immediately after discovery).
Discuss the steps you feel are needed to prove the extent of loss and to prevent
further loss. Reporting delayed for more than 30 days can cause a forfeit of our
bond coverage. It can lead to further losses and may expose you to personal
liability as well.
Third, protect any known documentary evidence.
Remember, the first step is the most important. Discuss your suspicions with
your attorney and do not talk to anyone you do not have to. Miss this step and
you could say something that leaves you facing an innocent employee's defamation
lawsuit or make a criminal conviction impossible against a real thief.
FREQUENTLY ASKED QUESTIONS
AND ANSWERS
My notary is up for renewal. How do I get it renewed
using the blanket bond provided by the State?
In order to renew your notary under the State's blanket bond policy, you must
prepare a letter on your Department stationery with your department head's
signature stating you are a State employee covered by the blanket bond policy
issued by The Fidelity & Deposit Company of Maryland. In your letter, include
the policy number (CCP0042351). You should then take the letter and the filing
fee (approximately $10 -$16) to the Probate Office in the county of your
residence. Before leaving the Probate Office, secure a receipt (for proper
reimbursement by the State). You may contact DORM underwriting for a sample
letter.
What should I do if the Probate Judge in my county of
residence will not accept the State Blanket bond?
Contact our office at (334) 223-6120.
Does the State reimburse me for the notary filing fee?
If so, what is the procedure?
To be reimbursed for your notary submit the voucher and receipt directly to the
State Comptroller. Risk Management approval is not now required.
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