The Liability Protection Agreement ("LPA") covers municipal employees, members of council, directors of various boards (such as hospital, police and library boards), volunteer firefighters and constables, volunteers, etc. These people would be insured provided they are acting within their scope of duties on behalf of the subscribing member. This is a very important condition. If they are volunteers or employees of another group or organization, over which the member has no control, and/or they are performing services that are not to the benefit of the member, they might not be covered by the MIABC.
The LPA is divided into two parts. Coverage A pertains to Bodily Injury (injury/death), Property Damage (physical injury to or destruction of tangible property, including resulting loss of use), and Personal Injury (false arrest, wrongful detention, invasion of privacy, defamation).
It is important to note that claims falling under Coverage A are made on an occurrence basis. That means the date of loss is the date in which the injury or damage occurred. For example, a person trips and falls on January 1, 2002. The policy that would respond would be the 2002 policy term.
Coverage B pertains to “Errors & Omissions”. It covers damages resulting from any claim made against the insured arising from an act, error, omission or breach of duty committed by an insured party; provided such claim to recover is made within the agreement period. We refer to this as a “claims made” policy. The date of loss is when the member received notification of the claim, not when the act, error or omission was made.
Typical claims falling under Coverage B would be claims for economic loss resulting from negligent building inspection, negligent misrepresentation, bylaw enforcement, zoning issues, etc. Exclusions
Some of the more common exclusions found in general liability policies is the use and operation of a motor vehicle or watercraft; aircraft and airport liability; war or terrorism; nuclear hazards; breach of contract/failure to perform; intentional and malicious acts; and claims for punitive or aggravated damages.
The MIABC policy also excludes water ingress through the building envelope; asbestos liability; pollution liability (with a few exceptions); loss or damage arising from fungi and spores; loss or damage resulting from terrorism; loss or damage arising from destruction, corruption, deletion or use of data; and declarations, orders and injunctions (these are not claims for damages).