As used in this part, “local public entity” means any public entity except a state agency covered by Section 11007.4 of the Government Code.
Part 6INSURANCE
Section § 989
This section defines a "local public entity" as any public organization that is not a state agency governed by another specific law.
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Section § 990
This section allows local public entities in California to purchase insurance to cover various liabilities that may arise from their operations. This includes coverage for tort claims, which are wrongs that result in legal liability, and inverse condemnation, which involves claims related to property devaluation due to government action.
Entities can insure themselves and their employees against claims arising from actions taken within the scope of employment, including defense expenses even if liability isn’t established. However, these entities cannot pay for or insure against punitive damages, which are intended to punish wrongdoing.
Specifically, hospital districts are permitted to engage in specific insurance exchanges with their medical staff.
Except for a liability which may be insured against pursuant to Division 4 (commencing with Section 3200) of the Labor Code, a local public entity may:
(a)CA Government Code § 990(a) Insure itself against all or any part of any tort or inverse condemnation liability.
(b)CA Government Code § 990(b) Insure any employee of the local public entity against all or any part of his liability for injury resulting from an act or omission in the scope of his employment.
(c)CA Government Code § 990(c) Insure, contract or provide against the expense of defending a claim against the local public entity or its employee, whether or not liability exists on such claim, including a claim for damages under Section 3294 of the Civil Code or otherwise for the sake of example or by way of punishment, where such liability arose from an act or omission in the scope of his employment, and an insurance contract for such purpose is valid and binding notwithstanding Section 1668 of the Civil Code, Section 533 of the Insurance Code, or any other provision of law.
(d)CA Government Code § 990(d) A hospital district may participate in a reciprocal or interinsurance exchange with the members of its medical staff as provided in Section 1284 of the Insurance Code.
Nothing in this section shall be construed to authorize a local public entity to pay for, or to insure, contract, or provide for payment for, such part of a claim or judgment against an employee of the local entity as is for punitive or exemplary damages.
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Section § 990.2
This section allows the Judicial Council to provide insurance for superior court officers or staff. This insurance can cover liability for injuries caused during their work, and can also cover the costs of defense if they're sued, even if they're not actually liable.
The Judicial Council may insure any officer or attaché of its superior courts against all or any part of the officer or attaché’s liability for injury resulting from any act or omission in the scope of the officer or attaché’s employment, and also may insure against the expense of defending any claim against the officer or attaché, whether or not liability exists on that claim.
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Section § 990.4
This section explains the options for how insurance can be provided under this part of the law. The options include: self-insurance, which may or may not be supported by reserved funds; purchasing insurance from authorized insurers in the state; securing insurance per specific sections of the Insurance Code; or through participation by hospital districts and their medical staff in certain insurance exchanges. These options can also be combined.
The insurance authorized by this part may be provided by:
(a)CA Government Code § 990.4(a) Self-insurance, which may be, but is not required to be, funded by appropriations to establish or maintain reserves for self-insurance purposes.
(b)CA Government Code § 990.4(b) Insurance in any insurer authorized to transact such insurance in this state.
(c)CA Government Code § 990.4(c) Insurance secured in accordance with Chapter 6 (commencing with Section 1760) of Part 2 of Division 1 of the Insurance Code.
(d)CA Government Code § 990.4(d) Participation by a hospital district and its medical staff in a reciprocal or interinsurance exchange as provided in Section 1284 of the Insurance Code.
(e)CA Government Code § 990.4(e) Any combination of insurance authorized by subdivisions (a), (b), (c), and (d).
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Section § 990.6
This law says that any expenses for insurance, as outlined in this part, should be paid by the local government entity involved.
The cost of the insurance authorized by this part is a proper charge against the local public entity.
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Section § 990.8
This law allows local public entities, mutual water companies, and public agencies in California to join together through a joint powers agreement to provide insurance coverage or pool self-insured claims. Hospital districts can also participate in this pooling arrangement. Entities with the same governing board can be co-insured under one policy, sharing premium costs.
Pooling self-insured claims is not considered formal insurance, which means it isn't subject to insurance regulations. Even though it's not regulated as insurance, such pooling agreements can be reinsured just like regular insurance policies. Importantly, once coverage has been used, entities may not get a refund for premiums related to that risk.
The term "mutual water company" is defined according to the Corporations Code.
(a)CA Government Code § 990.8(a) Two or more local public entities, or a mutual water company and a public agency, as authorized under subdivision (b) of Section 6525, by a joint powers agreement made pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7, may provide insurance authorized by this part or for any other purpose by any one or more of the methods specified in Section 990.4. Where two or more hospital districts have joined together to pool their self-insurance claims or losses, any nonprofit corporation created pursuant to subdivision (p) of Section 32121 of the Health and Safety Code, and affiliated with a hospital district which is a party to the pool may participate in the pool.
(b)CA Government Code § 990.8(b) Two or more local public entities having the same governing board,
or a mutual water company and a public agency, as authorized under subdivision (b) of Section 6525, may be coinsured under a master policy and the total premium may be prorated among those entities.
(c)CA Government Code § 990.8(c) The pooling of self-insured claims or losses among entities as authorized in subdivision (a) of Section 990.4 shall not be considered insurance nor be subject to regulation under the Insurance Code.
(d)CA Government Code § 990.8(d) Any liability or loss under a joint powers agreement for the pooling of self-insured claims or losses authorized by this part and provided pursuant to this section may, notwithstanding Section 620 of the Insurance Code or any other provision of law, be reinsured to the same extent and the same manner as insurance provided by an insurer.
(e)CA Government Code § 990.8(e) Where a joint powers agreement authorized by this part or authorized pursuant to Section 6516 provides for the pooling of self-insured claims or losses among entities, if any peril insured or covered under contract has existed, and the joint powers authority or other parties to the pool have been liable for any period, however short, the agreement may provide that the party insured or covered under contract is not entitled to the return of premiums, contributions, payments, or advances so far as that particular risk is concerned.
(f)CA Government Code § 990.8(f) For purposes of this section, “mutual water company” has the same meaning as the term does in Section 14300 of the Corporations Code.
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Section § 990.9
This law allows local government entities, like cities or counties, which provide health care services, to offer insurance or financial protection through self-insurance for medical malpractice claims against individuals who volunteer to give free care to low-income patients at community or free clinics. These volunteers must work in good faith, not be paid for their services, and be professionals licensed in California. However, this coverage won't apply if there's other insurance already covering the liability.
Any city, county, city and county, or any other local public entity with authority to provide health care services may provide insurance or provide indemnity through self-insurance for medical or other health-care tort claims against any person who, in good faith and without compensation, renders voluntary care to low-income patients within the scope of his or her practice at a community clinic or free clinic, as those terms are defined in subdivision (a) of Section 1204 of the Health and Safety Code, serving residents within the jurisdiction of the local public entity, and who is licensed under Division 2 (commencing with Section 500) of the Business and Professions Code or under an initiative act referred to in those provisions. However, the insurance or indemnity provided pursuant to this section shall not cover liability for which there is other insurance coverage in effect.
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Section § 991
This law section explains how local public entities, like city governments or schools, can insure against certain liabilities. If another law requires or lets them insure, this doesn't change the rules set by those other laws. This part doesn't allow school districts to self-insure unless specifically allowed by the Education Code.
The existing rules for insuring under other laws remain the same, and this section doesn't restrict them. However, school districts must follow specific guidelines and can't decide to self-insure if they're supposed to take out insurance unless another law permits it.
Where an enactment, other than this part, authorizes or requires a local public entity to insure against its liability or the liability of its employees:
(a)CA Government Code § 991(a) The authority provided by this part to insure does not affect such other enactment.
(b)CA Government Code § 991(b) Such other enactment does not limit or restrict the authority to insure under this part; but, except to the extent authorized by Section 1251 of the Education Code, nothing in this part permits a school district to self-insure in any case where the school district is required to insure.
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Section § 991.2
This law section clarifies that if a local public entity (like a city or county government) provides insurance, it doesn't automatically make them or their employees liable for issues unless they're already liable by other laws. Additionally, if they have a legal defense available, providing insurance doesn't take that defense away.
Neither the authority provided by this part to insure, nor the exercise of such authority, shall:
(a)CA Government Code § 991.2(a) Impose any liability upon the local public entity or its employee unless such liability otherwise exists.
(b)CA Government Code § 991.2(b) Impair any defense the local public entity or its employee otherwise may have.
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