News | 20 Oct 2017

3 Blind Spots in Municipal Insurance Coverage

Why It’s Important to Keep a 360° Perspective

When customizing insurance coverage for a public entity, it can be difficult to know what you need and what you don’t. Healthcare and workers’ compensation coverage are on everyone’s “must have” lists, but other coverage needs can easily fall into dangerous insurance blind spots. Don’t wait until there’s a crisis! Make sure your public entity is adequately protected from exposures by proactively addressing these three often forgotten coverage concerns.

Earthquake and Flood Coverage

Earthquake and flood exposures are too often excluded from a municipality’s property insurance policy even though their low frequency/high severity loss aspects are well suited for insurance protection. With these coverage needs stuck in an insurance blind spot, perils may creep up and inadvertently subject large assets to an unfunded loss.

Here in Pennsylvania, the need for adequate coverage is particularly pressing. Berks County and Lancaster County rank first and second, respectively, as the most earthquake-prone counties in the state. As recently as April 2017, a 2.3-magnitude earthquake was recorded in Lancaster County, centered near Millersville. Flooding is also of very real concern. In Bucks County, businesses along the Delaware River have gone under – literally and figuratively – because of repeated flooding.

Low Liability Limits

Under the Pennsylvania Political Subdivision Tort Claims Act, liability damages are capped at $500,000 per occurrence. However, there are no liability caps for federal civil rights actions, including law enforcement, land use, and employment-related disputes.

Although eastern Pennsylvania law enforcement liability cases have resulted in settlements or awards in excess of $7 million, some municipalities with these exposures have liability limits of $5 million or less. Because any judgment over the limit becomes the municipality’s responsibility, it is crucial to monitor how limits compare to recent judgments and settlements so that public assets are adequately protected from loss. With diligent attention, liability limit blind spots can be eliminated.

Crime Coverage

As reliance on electronic transactions continues to grow, adequate crime coverage has become an essential element of property and liability insurance packages. The potential for loss is staggering – employee embezzlement, employees setting up fake accounts or vendors, theft of cash or securities, forged checks, or even unauthorized wire transfers by bank employees. In a digitally driven world where criminals are often one step ahead of their victims, no business can afford to leave crime coverage in an insurance blind spot.

Learn more. A Delaware Valley Trust representative can answer your questions and show you how to keep a 360° insurance coverage perspective. Contact us by phone at (215) 706-0101 or by email at

Managed Risk. Collective Rewards.

The Delaware Valley Trusts provide custom health, workers’ compensation, and property & liability coverage for public entities. We pride ourselves on long-term rate stability, superior customer service, and value-added benefits. Our members are financial stakeholders that benefit from our cost-efficient, risk-sharing model. For more information, please contact us by email at or 215-706-0101.