Professional Liability Insurance is a Necessity for FAA Managers

Recently the Federal Aviation Managers Association published this article in their Jan/Feb 2009 Vol. 7 No. 1 Managing the Skies Magazine on page 29 highlighting the importance of protecting your job and family with Professional Liability Insurance. We reprint the article below for your convenience.

The Federal Aviation Managers Association often receives inquiries asking whether their members should protect themselves by purchasing professional liability insurance. Given the difficult decisions that FAA employees must make on any given day, potential for complaints and even lawsuits from members of the public, and the scope of the Office of Security/OIG process into alleged allegations of wrongdoing and professional misconduct on the part of FAA employees, professional liability protection is a must have for all FAA employees.

Recent trends are that FAA managers will unfortunately find themselves facing a lawsuit, an investigation or complaint at least once over the course of their career. Liability protection steps in when you are sued personally for job-related actions, involved in a misconduct or administrative matter, or are under a criminal investigation for a job-related action. These are the very reasons that FAAMA and many other federal employee associations encourage their members to protect themselves by purchasing professional liability insurance. Moreover, the fact that Congress passed a law in 1999 requiring federal agencies to reimburse federal managers up to ½ the cost of the liability insurance demonstrates a clear congressional understanding that federal employees are vulnerable for just doing their jobs.

The following is a brief overview of the potential personal liabilities federal employees sometimes face in their careers, as well as information about the professional liability insurance offered to federal employees.

General Rules on Suits Against Federal Employees/Managers

Federal employees at all levels can be sued by private persons for alleged violations of their constitutional and common law rights. These issues arise most often for FAA officials who have frequent dealings with regulated persons, entities or the general public. In most civil suits, the Department of Justice will represent the named individual defendant and judgments are rarely issued ordering individual employees to pay damages. On occasion, however, DOJ will refuse representation and the individual must then obtain private counsel to defend him or herself in court. With lawyer hourly rates running upwards of $275 to $400 per hour for experienced lawyers, an individual forced to retain private counsel finds him or herself quickly paying a lot of money in legal fees, even if the allegation is ultimately disproved.

While federal employees are absolutely immune from suits for common law torts if they are performing their official duties, otherwise known as acting “within the scope of employment,” and have qualified immunity in suits alleging constitutional torts, this does not mean a federal employee cannot be sued. If DOJ determines that the federal employee is acting in the scope of his/her employment and that it is “in the interest of the United States” to represent that person, a discretionary decision, then DOJ will defend the employee. DOJ has frequently taken the position that it is not in the scope of your employment or the interest of the U.S. to defend an employee where the suit involves unauthorized physical contact, use of inappropriate language, and other similar inappropriate or unauthorized conduct. In these cases, an employee is forced to retain private counsel at his/her own expense, and of course may become liable to pay a judgment.

What does Professional Liability Insurance Offer to Federal Employees?

First, as long as any civil claim brought against you as a federal employee arises from actions taken in the scope of your employment, the insurance offered to federal employees provide coverage, paying up to $1,000,000 in damages, regardless of whether your agency authorizes payment of the judgment from agency appropriated funds. These programs will also pay for private legal defense if DOJ will not defend you. If you suddenly find yourself facing a civil suit or criminal charges without DOJ representation, defending yourself can run $25,000 to well over $100,000 in legal fees.

Second, the insurance programs have one very large added attraction, an administrative defense provision. This provision entitles a federal employee who is accused of some kind of wrongdoing in the course of rendering a professional service to have his/her legal fees paid for in an administrative investigation (including an investigation for alleged whistleblower reprisal by OSC or an EEO investigation where you are named as the responsible management), disciplinary action, judicial sanction proceeding, and criminal defense proceeding.

Considering how easy it is to make targets of FAA officials, more and more managers, are accused of, and investigated for, some allegation at some point in their careers. After all, our system allows baseless allegations to be made without consequence to the accuser. In what may become a super-charged environment, an agency lawyer may be assigned to assist you. But this attorney represents the government’s interests, not the manager’s, and may advance a position adverse to the employee. Moreover, if you are directly accused of wrongdoing, you will most likely be on your own. Bargaining unit employees facing accusations of misconduct are generally entitled to representation provided by the union. As you already know, management officials, supervisors, and executives are not eligible to be in a bargaining unit, and therefore, are not entitled to legal representation by the union. Regrettably, it can cost at least $30,000 to $70,000 to take your case through the MSPB if you are the subject of a disciplinary action. It can easily cost $15,000 to $50,000 to defend yourself in an Office of Security, OIG, OSC, EEO, or Congressional investigation.

Finally, the FAA is required by law to reimburse management officials, supervisors and law enforcement officials for up to half the annual cost of the liability insurance. With most insurance policies selling for less than $300, this brings the annual cost down to less than $150. The fact that Congress requires the use of appropriated funds to pay up to ½ the cost of the liability insurance shows that Congress understands the need and the importance of such insurance for federal employees.

Hopefully, this helps explain the professional liability question for you. Over the years we have heard horror stories about managers and supervisors who have not had liability insurance and had to finance their own legal defense. The managers who did have the insurance were relieved as legal fees and expenses grew and they were still able to mount a defense without sacrificing retirement dollars, college savings funds and other savings. To be able to purchase insurance that protects your livelihood and career for less than $150 a year is truly a godsend.

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