Personal and business assets are often vulnerable during litigation, but certain parties benefit from specific kinds of protection from claims regarding their assets. Government entities securing insurance are often part of a pool of different entities. Local municipalities, county authorities and school districts may be part of a broader risk pool that involves multiple different entities.
When there is a sizable insurance claim in process or when a lawsuit arises, there may be concern about the assets owned by the pool, including the funds held in reserve to cover appropriate claims. Business leaders, those who hold positions of authority within local government agencies and school administrators may be among those in need of support while protecting the pool of assets associated with their risk pool.
What do the legal professionals representing those leaders need to know about immunity rules?
Pool assets may have immunity as government resources
Both state law and prior state court rulings have protected government entities, including school districts, by extending them immunity against certain types of claims. Establishing that state laws and prior court precedents validate the claim that a risk pool’s assets have immunity from outside claims can be a complicated process.
Many legal professionals who handle standard insurance matters may find this complex area of law overwhelming. Disputes about asset immunity can take years to resolve. For example, a lawsuit brought by a school district against a sizable insurance fund saw multiple appeals and even legislative action to address the gaps in the current law.
In some cases, pooled assets are immune from litigation brought in response to denied insurance claims or allegations of bad-faith practices. Particularly in scenarios where the lower courts have already ruled on a case or where resources contributed by various parties could be vulnerable due to a lawsuit brought by one organization or school district, protecting pooled assets may be a top priority. Validating immunity can be invaluable in cases where pooled assets could be at risk due to decisions made by an insurance provider.
Reviewing the complicated case law and statutory provisions addressing pooled assets related to government entities and school districts can be a lengthy process. Attorneys representing local municipal authorities, school districts and others attempting to appropriately resolve a claim dispute or a pending lawsuit generally require insight into this complicated area of law and the complex litigation that it may trigger, and that’s okay.