Policy Management

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:

  • Mysterious Disappearances.
  • Accounting errors without proof of dishonesty.
  • Loss of money or property belonging to employees.
  • 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.

Notary Applications and Renewals

In order to initially apply for or renew notary bond coverage under the State's blanket bond, email a request to the DORM Underwriting Manager (max.graham@finance.alabama.gov).

The email must include:
  1. Employee's name as it appears on notary seal
  2. Employee's agency
  3. Employee's job title
  4. County in which he/she is a resident

Within 2-3 business days applicants will receive an email reply from DORM that will include a letter stating proof of coverage under the State's blanket bond. Print the letter and submit it to the employee’s resident county probate office.

Notary applications are available at county probate offices. Some county probate office websites provide access to on-line applications and other important information such as notary public requirements and filing fees.

The notary application, filing fees and proof of coverage letter from DORM should be submitted to the employee’s resident county probate office. Application filing fees are processed according to procedures set by the employee’s agency.

Additional information on being appointed a notary public is available on the Alabama Secretary of State website (www.sos.state.al.us). A link is provided for county probate judge office contacts as well as information about the duties and responsibilities of notaries under the Code of Alabama and the statutes governing notaries.

For questions about the status of a request to DORM for a proof of coverage letter, contact our office at (334) 223-6120.

For questions related to the notary application or filing fees, contact the resident county judge of probate office at the number provided on the Alabama Secretary of State website listed above.