Liability Insurance for Federal Employees and Contractors

Why Federal Employees Need Professional Liability Insurance


First Responders-PLI

When disaster strikes, emergency responders are the first ones on the scene. Act first, think fast, and coordinate quickly. The scrutiny comes later. Decisions made in response to addressing an emergency situation will be inspected, prodded, probed. There will be demands for accountability in response efforts, emergency preparedness, property loss, and proper allocation of resources when a hurricane, earthquake, terrorist attack, chemical spill, disease outbreak, and natural or human caused-disaster hits.

FEMA and other federal emergency response employees are particularly vulnerable to administrative investigations but can also face civil suits and criminal allegations when simply carrying out the responsibilities and actions required of the job. Defending against allegations of misconduct or other wrongdoing is difficult and, in many cases, requires federal employees to hire and pay for outside legal counsel – even if the allegation is ultimately disproved.

Federal employee professional liability insurance essentially covers three areas of exposure:

Administrative & Disciplinary Matters

FEDS Protection provides coverage for any administrative or disciplinary proceeding or administrative investigations into alleged misconduct from any act, error, or omission committed by a federal employee while rendering a professional service. This includes OIG, GAO, OSC, EEO, Congressional investigations, or any management directed investigation that could result in an action against you. Common allegations include:

  • Alleged abuse of authority or position;
  • Loss of equipment or damage to government property;
  • Failure to follow SOP or other supervisory instructions;
  • A fraud, waste, or abuse complaint/allegation;
  • A whistleblower or ethics complaint; or
  • Any other allegation of wrongdoing involving the performance of your official duties.

As an insured member, FEDS Protection will pay for legal defense up to $200,000 for any administrative investigation or disciplinary proceeding arising out of any act, error, or omission in the course and scope of your employment.

Civil Suits

Although very rare, you may find yourself facing a civil suit, or personal capacity lawsuit, without DOJ representation. Personal capacity lawsuits, however, should not be confused with lawsuits filed under the Federal Torts Claims Act, in which you have absolute immunity.

If you are sued in your personal capacity for a job related decision or action, all you really need to understand is that:

  1. DOJ representation is not mandatory. DOJ representation is not automatic. DOJ can deny representation if it is not in the interest of the United States to do so, and
  2. You can be held personally liable even if DOJ represents. You don’t have absolute immunity like you do for lawsuits under the FTCA.

In a personal capacity lawsuit, your FEDS attorney will defend you when DOJ exercises its discretion not to. This most often happens if you are being investigated for the very same reason that you are being sued—you can see that DOJ will not want to be on both sides of that. The policy will also provide indemnification if you are held liable. Defense and indemnification limits are either $1,000,000 or $2,000,000 depending on the policy you choose.

In these circumstances, FEDS Protection protects you from the civil exposures of your job in two ways:

  1. Legal Defense: FEDS Protection will provide you with an attorney to defend in the event that the DOJ makes a determination that it is not "in the interest of the United States” to represent the employee (a discretionary DOJ decision). This can occur even if the employee was acting within the scope of employment.
  2. Pays Damages: FEDS Protection provides indemnity protection at either the one or two million dollar limit if an employee is found liable for which the agency will not indemnify. An employee can be held liable and be forced to pay the judgement even if the DOJ defends and loses.


Criminal Matters

The FEDS policy pays for legal defense up to $100,000 for any criminal proceeding or investigation into any act, error, or omission committed by a federal employee while rendering a professional service. A federal employee can be investigated criminally for even the most trivial matters and false allegations — and if it happens to you without insurance, you must pay for your own legal representation.

This does happen to good federal employees. There is very little a federal employee can do wrong in the federal arena and not also have it be a potential violation of Title 18 (the federal criminal code). Some of the most common criminal investigations involving federal managers are due to conflict of interest statutes where intent is not a prerequisite to prove the crime, release of privacy act or other statutorily protected information and/or something arising out of an allegation of misuse of position or authority.

FEDS Protection is Affordable:

$1,000,000 Policy Annual Premium is $290
$2,000,000 Policy Annual Premium is $390
*Premiums are subject to applicable taxes and administrative fees

Payroll deduction is also an available payment option, starting at $12 per pay period.

Enrollment takes less than 5 minutes.

Have questions? Call us at 866.955.FEDS.

Please see the Master Policy for complete policy terms and conditions.

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