During the last session, the Florida Legislature amended §768.28, F.S. which provides for a limited waiver of sovereign immunity for tort claims against the State, it agencies, and political subdivisions. Specifically, the monetary limits on liability set forth in that statute were increased from the existing limits of $100,000 per person and $200,000 per occurrence, to the new limits of $200,000 per person and $300,000 per occurrence. This amendment, which was signed into law by the Governor, takes effect on October 1, 2011 and applies to claims arising on or after that date. Otherwise, the statute remains unchanged.

On its face, this may appear to be a rather modest increase in governmental tort liability, especially when one considers that the current caps have been in place for 30 years. Additionally, the liability caps are still fairly conservative when compared to similar limitations on governmental tort liability which exist in other states, i.e., Indiana - $700,000 per person and $5 million per occurrence; Nebraska - $1 million per person and $5 million per occurrence; Maine - $400,000 per claim; Idaho - abolished to the extent of insurance or $500,000 per occurrence.

However, the Legislature, in its infinite wisdom, has certainly chosen an unusual time to impose this increased financial obligation upon the public sector. This change in the sovereign immunity limits, which essentially amounts to an unfunded mandate, will almost certainly result in increased expenses for Florida’s governmental entities in the form of increased litigation, larger settlements and verdicts, and corresponding higher insurance costs. Given the financial challenges already facing Florida’s public sector due to changes in the tax structure and prevailing economic conditions, it seems anomalous indeed that the Legislature would choose to further exacerbate the situation, at this particular time.

Aside from the philosophical debate regarding the wisdom and timing of this action, this amendment also raises certain risk management concerns which must be considered carefully by each public entity. Many of the existing policies or insuring agreements which have been purchased by governmental entities in this State establish the insurer’s indemnity obligation, through September 30, 2011, by reference to the existing sovereign immunity limits, i.e. $100,000/$200,000. This raises the potential for a “gap” in coverage for the public entity in those scenarios where the relevant occurrence takes place prior to October 1, 2011, but the claimant’s cause of action does not accrue until after October 1, 2011.

CONTINUED ON PAGE 3

Amendments to §768.28, Florida StatutesBy Michael J. Roper, Esquire

The Preferred Trustees ..... 2

Legislative Update: “If Ever There Was A Time...”..................... 4

Safety Source: “Stress, the Hidden Factor” .. 6

Claims Corner: “Are There Really Success Stories With Workers’ Compensation?”... 8

Case Law Update ................ 9

Welcome New Preferred Members .............. 10

Breaktime Fun -n- Games .. 11

Spring 2011 NewsInside This Issue:

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THE PREFERRED TRUSTEES’

Dwight E. “Ed” Wolf, IIChairCity of Wildwood - Mayor

Charles WalseyVice ChairCypress Grove CDD - Board Member

Joanna WilkinsonSecretaryCity of Haines City - Commissioner

Welton CadwellLake Sumter Emergency Medical ServicesChairman

Joseph W. GilliamGilchrist County BOCCClerk of Court

Thomas Rice, Sr.South Indian River Water Control DistrictSupervisor

Robert WalkerCity of SpringfieldMayor

Admittedly, in most instances, a claimant’s cause of action will accrue on the same date on which the relevant incident occurred, i.e., automobile accident resulting in personal injuries. However, since under Florida law, a cause of action does not accrue until the last element constituting the cause of action occurs, there can be limited circumstances when a claimant’s cause of action will accrue on a different date than the occurrence of the incident giving rise to the claim. The most obvious example of this scenario would be a claim for wrongful death where the accident occurred on September 30, 2011 but the claimant’s death did not occur until sometime after October 1, 2011. In that situation, the cause of action for wrongful death would not accrue until the death occurs. See Fulton County Administrator vs. Sullivan, 753 So.2d 549 (Fla. 1999). Accordingly, the claim for wrongful death would be subject to the increased sovereign immunity limits of the new statute, since this claim did not arise until after October 1, 2011. A similar situation could also occur in the case of “continuing” torts, i.e., trespass, nuisance, pollution, etc., depending upon the particular circumstances.

In the scenario outlined above, if the insuring agreement, which likely has the date of occurrence as the “trigger” for coverage, limits the insurer’s indemnity obligation to $100,000/$200,000, the entity could have up to a $100,000 “gap” between its potential tort exposure and its available coverage. Accordingly, in order to insure full coverage, the public entity should confirm that its insuring agreement extends coverage equal to the monetary limitations set forth in whichever version of §768.28, F.S. is applicable to a claim brought against said entity. Likewise, it would be important to confirm that the insurer will apply the “occurrence” date of the insuring agreement, to provide for coverage up to the increased sovereign immunity limits which may be applicable to this type of claim.

The public sector should also be on notice that there were significant legislative efforts to further seriously undermine the protections of sovereign immunity. There were several House and Senate Bills which were introduced, but which did not become law, seeking to effect much more drastic changes in Florida’s sovereign immunity law. For example, during the legislative process, there were bills introduced which sought to effect the following changes to Florida’s sovereign immunity laws:

1. Remove counties, municipalities and other local units of government from the umbrella of sovereign immunity protection.

2. Remove the per occurrence limit entirely.

3. Award Plaintiff’s attorneys an additional 5% in fees for appeals and any post-judgment actions (Claim Bills).

4. Provide for an annual increase in the liability limits based upon a component of the Consumer Price Index (CPI) and the CPI Medical Component.

Fortunately, those efforts were ultimately unsuccessful but obviously any single one of those proposals outlined above, if adopted, would have much more significantly altered the sovereign immunity landscape and further exacerbated the adverse economic consequences to the public sector. We would fully expect the plaintiff’s bar and other special interest groups to continue their lobbying efforts to further erode the existing sovereign immunity protections, and we would encourage Preferred’s membership to remain vigilant for those future efforts.

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Amendments to §768.28, Florida Statutes

COVER STORY CONTINUATION...

LEGISLATIVE UPDATE

Every four years a Governor of the State of Florida is elected or re-elected. In November of 2006, Floridians elected Charlie Crist as its 44th Governor. Having campaigned on, among other things, lowering property insurance rates, Governor Crist facilitated a Special Session of the Legislature that began a week’s worth of work during January 2007, commonly referred to as the honeymoon phase of Crist’s first (and only) term.

Arguably, the property insurance market in Florida has still not recovered. In 2009 and so far in 2010, a majority of the major residential property insurance market has, and is, losing money. Those intimately involved in this market point to a variety of causes, many stemming from the infamous House Bill 1A passed during the January 2007 Special Session of the Legislature. The creation of an unfunded layer of the Florida Hurricane Catastrophe Fund (FHCF), the associated and mandated reduction in homeowner insurance premiums (irrespective of a company’s decision to

purchase the new FHCF layer), and Crist’s commitment to continue to push homeowner insurance premiums lower, resulted in operational losses in 2009 and 2010 for much of the State’s major residential property insurers. Substantially contributing to the lack of net income in the personal residential property insurance market was the Legislature’s codified way of encouraging consumers to take more initiative in “hardening” their homes against the peril of windstorm. This declaration by the Legislature compelled the Office of Insurance Regulation to effectively double the premium credits policyholders received for wind mitigation features on their homes. The doubling of these credits motivated many homeowners to take advantage of this premium reducing process. The evidence documenting the volume of dubious claims of wind mitigation features and fraudulent certifications made by unscrupulous inspection companies is undeniable. The combined effect of the rate suppression and the doubled wind mitigation credits has tragically affected the industry’s profitability and this has been without any hurricanes.

With the recent election of Rick Scott as Florida’s next Governor and an overwhelmingly pro-business demeanor of the incoming Legislature, there is hope. Whether you are a Republican, Democrat, or Independent, there is little question that the property insurance market in Florida is in a perilous position.Rate adequacy and stopping wind mitigation credit fraud top the list of salves identified as the most immediate means of reversing the trends of the last four years. Scott comes from a business background that relies on competition. In his view, the role of government should be muted and not “drive the train”. He too, will have a honeymoon phase. The upcoming Legislative Session is expected to address a myriad things designed to assist in the insurance market’s recovery. Principally:

• Consideration of an expansion of those commercial insurance products that are exempt from rate regulationby the Office of Insurance Regulation. In 2009, Senate Bill 2176 identified eight different commercial products that would have lower thresholds of rate oversight. Senate Bill 178, filed earlier this year by Senator Steve Oelrich (R), expands that list to include: professional liability; fiduciary liability and other management liability; general liability; nonresidential property; nonresidential multiperil; and excess property. It is obviously early in the process, but the general disposition of the Legislature on rate regulation has been set.

• Citizens Property Insurance Corporation will likely see some adjustments to its rating protocols such that itwill migrate back to the “insurer of last resort” it was intended to be when it was created in 2002. Specifically, indications are that the rate differentials that govern eligibility for coverage by Citizens will be modified such that consumers will need to more aggressively seek coverage in the voluntary market before becoming insured through Citizens.

“If Ever There Was A Time . . .”

4

By J. Steve Roddenberry - Pennington, Moore, Wilkinson, Bell & Dunbar

LEGISLATIVE UPDATE

Citizens’ rates are generally acknowledged to be inadequate and not actuarially-sound. Due to changes by prior Legislatures, access to Citizens and its inadequate rates has rendered it a competitor in the property market. This is not how a state-created residual market is supposed to work. Fundamental to a change in the property market is a tightening of the conditions under which a property owner can secure this subsidized coverage.

• Fraud in the area of automobile insurance has become the bane of those operating in that market. Weexpect to see a clarification in the “No-Fault” law, also known as “PIP”, governing attorney fees and exactly what part of Medicare that medical providers and insurers are to rely upon when billing and paying forinjuries sustained in automobile accidents.

o An intensified regulation of “PIP-clinics” is also expected to be addressed by the Legislature.

o A recent Florida Supreme Court case, Custer Medical Center a/a/o Maximo Mases v. United Automobile Insurance Company is expected to prompt a change in the No-Fault law governing conduct surrounding examinations Under Oath (“EOU”). Conceivably, the effect of the Custer decision could “bleed” over into other areas of the Insurance Code that authorize or contemplate EOUs. This is a recent development (decision on November 4, 2010) that will require quick movement. Some class actions have already been filed in response to this Supreme Court decision. We will need to work quickly to clarify the statute before this decision is used to launch another assault on the insurance industry.

• For the first time in a while, we do not expect to see any substantive changes in Chapter 440 governingworkers’ compensation insurance.

• After passage last year of the bill expanding the limits on sovereign immunity, we believe further changes in this section of the Statutes to be “off limits”, for a while.

They used to say, “Nothing is safe when the Legislature is in town.” Believe me, we still say that. But the general feeling is that the 2011 Session will present an opportunity to arrest and even reverse some of the adverse statutory changes that have been forced on the property and casualty insurance market over the last four years.

It’s early yet. Most bills have not even been filed. Last year, almost 2,500 bills were filed, but only 301 were passed. So far this year, less than 200 bills have been filed; clearly, many more are expected. But the belief is that a return to a relatively normal property and casualty insurance market will begin with legislation passed in the 2011 Session. Your practical experience and input during the next five months will prove invaluable to those advocating your interests. To borrow a phrase, “Let’s get to work!”

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Stress, the Hidden Factor

6

THE SAFETY SOURCE

By Gina L. Hall, SPHR - GLH Consulting

Stress is a lot like wind…..we can’t see it, yet we can feel it and see it’s effect….Wind blows and we feel chilly. Wind blows and down come trees, houses, and other structures that cause immense damage. We can’t see stress, can’t hold it, can’t smell or taste it, yet the effects of stress can be serious, even life threatening. However, stress like wind can have positive effects….the wind blows on a warm day and cools us. We drive our cars and someone cuts in front of us. The “fight or flight” stress kicks in and causes us to veer out of the way of a potential crash. For this article let’s look at stress in the workplace...

A survey by EAP provider ComPsych revealed that:

• 51% of employees say they have high levels of stress, with extreme fatigue/feeling out of control

• 50% of employees miss one or two days of work per year due to stress

• 46% of employee say they come to work one to four days a year when they are too stressed to be effective

So on any given day, half of your employees may be coming to work extremely stressed out. Stressed out workers feel overwhelmed, they don’t necessarily think clearly and thus may not perform as well as they could. These employees are talking to your customers, updating your systems, loading trucks, packing boxes, handling cash. If they are feeling stressed, they may not represent your company in the best light and may feel entitled to do some things that they might not do under different circumstances. We know that one of the causes of workplace violence is stress.

So let’s focus on workplace stress, causes and cures...

Most job stress has to do with employee’s impression that they have little control over their work says Dr. Paul Rosch, president of The American Institute of Stress. David Lee, principal of HumanNature@work indicated that research by a client revealed that poor teamwork and ineffective supervision were the two most important factors leading to workplace stress. Granted trying to manage people can be stressful. But, it is also stressful to be managed by someone who doesn’t know how to manage and perhaps compensates for their insecurity by being controlling. So what can a company do to help reduce stress and thereby improve productivity and efficiency in the workplace? Ask employees to submit statements about what bothers them most at work. You may want to give workers the choice of answering the question anonymously. Once you understand the major issues in the workplace, then you can work on reducing the stress. Perhaps it is training supervisors on how to better manage employees. This should not be a one hour session. It should be on-going training to help supervisors and managers coach employees. Think about it, major league sports teams have coaches who continually direct players to perform their best, modify plays based on the situation and provide training to enhance performance. Why should employers be any different? Maybe it is creating a forum to listen to employees about better ways to do things, like organize a production line, address customers concerns about “X” or better utilize technology to become more efficient or effective.

Gina Hall of GLH Consultants provides human resource consulting to public and private com-panies as well as individuals. Gina worked in corporate America for more than 25 years and thus applies her experiences in her consulting practice to customize realistic solutions for each client. Gina has been an active member of the Society for Human Resource Management (SHRM) since 1990. In addition to serving on a national level as Florida State Director, she is past president of the Central Florida Human Resource Association (CFHRA, the local SHRM chapter) and currently on the CFHRA Board of Directors. Gina received her PHR, Professional in Human Resources in 1990 and her SPHR, Senior Professional in Human Resources from SHRM in 1998. She has a B.A. in Communications from Auburn University.

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THE PREFERRED TRUSTEES’ THE SAFETY SOURCE

Front line workers have a lot of good ideas about what works and what doesn’t work. Management should get in the habit of asking employees about what works and what doesn’t work and then doing something about it. In this way employees feel more valued and acknowledged, less out of control and less stressed. Finally here are some basics to pass along in coaching employees in stressful situations:

• Don’t make emotional decisions when upset. Typically it won’t be the decision you would make if you assessed the situation in a calm, rational manner.

• Walk away – if a situation is causing you to feel overwhelmed, upset, sad or mad, walk away before you act. Talk to someone to get past the moment so that you can respond in a manner that is productive and not reactive.

• Reframe the situation – what looks like dark, cloudy skies today may not seem so bleak tomorrow.

BE IN THE MEMBER SPOTLIGHT... We would like to share your best practices, risk management expertise, success stories, and the accomplishments of your entity and employees with fellow members in our next news letter.

If interested in submitting an article, please contact: Mike Stephens Safety & Risk Management Consultant

Email: mstephens@publicrisk.com Phone: 321-832-1658

8

CLAIMS CORNER

Are There Really Success StoriesWith Workers Compensation?By Tyler Cox, Lieutenant Paramedic, Planning and Research, Brevard County Fire Rescue

Tyler Cox thinks so. I began my career with Brevard County Fire Rescue in 2001 as a Firefighter/EMT. On January 6, 2002, I sustained a back injury while carrying a patient out of their home during an emergency call. Not deterred, I began treatment while I continued normal job duties. In March 2003, I was diagnosed with two herniated disks in my lower back. This led to a five back surgeries over the next seven years. After each of the first three surgeries I was able to return to full duty as a firefighter. During this period I continued my education. I became a State certified Paramedic, Fire Officer, Driver Engineer, Fire Instructor, a member of the Hazmat and Special Operations Team, and promoted to Lieutenant. Additionally, I am currently enrolled at Barry University. I am scheduled to graduate in May 2011 with a Bachelor's Degree in Public Administration. In August 2010, I was placed at Maximum Medical Improvement. Due to the several surgeries and extent of my injury, I will not be cleared to return to full duty. However, I have just been selected for a permanent position with Fire Rescue Administration where I will be the Planning and Research Lieutenant. I am excited to continue my career with Fire Rescue and Brevard County. Tyler Cox’s Lower Back Procedure List: Date of Injury - 01/06/2002 Received treatment including physical therapy and epidural steroid shots. 1st Surgery - April 2003, L4-L5 Microdiscectomy

• Returned to work without restrictions June 2003. 2nd Surgery - August 2004, L5-S1 Microdiscectomy

• Diagnosed with a staph infection two weeks post-op. 3rd Surgery - September 2004, Emergency Surgery Due to Infection

• Returned to work without restrictions December 2004. 4th Surgery - November 2006, L5-S1 Microdiscectomy

• Returned to Light Duty work January 2007. • Received treatment including physical therapy and epidural steroid shots. • In June 2009 I began to decline. An MRI showed both discs had re-herniated and there was obvious nerve impingement. 5th Surgery - January 2010, L4, L5, S1 Two Level Fusion

• Returned to Light Duty work May 2010. • Selected for administrative position October 2010.

I would like to first thank Fire Rescue for their continued support and encouragement. I am thankful for the opportunities I have been given and look forward to finishing my career with BCFR. Thank you to Dr. Homi Cooper. He was my original doctor when I first injured my back and he has continued to monitor my progress and guide me to a successful outcome. Of course, I must not forget my two guardian angels, Linda Allison of Risk Management, and Wendy Hall of PGCS. Words cannot express how grateful and lucky my wife and I are to have such wonderful people help us through the tough times. I would not be where I am today without their support, encouragement, and counseling. You both are wonderful people and your employers are lucky to have you as part of their staff. Keep up the great work!

9

CASE LAW UPDATE

By Brian Bolton, Esquire

Court Rejects Policy Created aVested Benefit for Employee

In Carlucci v. Demings. 31 SO. 3d 245 (Fla. 5th DCA 2010), the 5th DCA considered whether a judge erred by dismissing a retired police officer’s lawsuit concerning whether health insurance benefits vested due to policy language adopted by an order of the Orange County Sheriff. The appellate court affirmed the dismissal and held that, under Florida law, policy statements contained in employment manuals do not give rise to enforceable contract rights unless they contain specific language which expresses the parties’ explicit mutual agreement that the manual constitutes a separate employment contract. The court had previously rejected the theory that a contractual right was acquired when a sheriff unilaterally adopted a disciplinary procedure that could be modified or completely revoked at will. The Sheriff’s unilateral act of implementing an internal policy in Carlucci was subject to unilateral cancellation and could therefore not constitute a contract. Thus, the court upheld the trial court’s final summary judgment, ruling that the policy, which was later rescinded, did not create a vested and enforceable contract entitling employees with twenty years of service with the Orange County Sheriff’s Office to a fully paid lifetime health insurance policy.

Discussion:

Care should be taken when drafting policies and procedures so as to not create a vested and enforceable employee benefit. The Language allowing the benefit to be “revoked at will” works well to avoid this problem.

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PREFERRED would like to welcome the following new members...

Brevard Family HousingFlorida Governmental Utility Authority / MacDill Water SystemManatee County Port AuthorityMunicipal Public Safety Communications ConsortiumNaples Airport AuthorityNature Coast EMSNavarre Beach Fire DepartmentNorth Brevard Medical DistrictNorth Sumter County Utility Dependent DistrictNorthwest Florida Beaches International AirportOkaloosa Island Fire DistrictPort of Palm Beach DistrictPanama City / Bay County Airport & Industrial District

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City of South MiamiTown of DundeeTown of OaklandTown of Ocean RidgeTown of PiersonVillage of El PortalVillage of Key BiscayneVillage of North Palm Beach

MUNICIPALITIES:

SPECIAL DISTRICTS:

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WELCOME NEW PREFERRED MEMBERS

Madison County BOCCOkaloosa County BOCCSanta Rosa County BOCCCity of AlachuaCity of ApopkaCity of Gulf Breeze City of Lake WorthCity of MadisonCity of North Miami

Village CDD #3Village CDD #4Village CDD #5Village CDD #6Village CDD #7Village CDD #8Village CDD #9Village CDD #10Zephyr Ridge CDD

Bonnet Creek Resort CDDEncore CDDLake St. Charles CDDMeadow Pines CDDPalace at Coral Gables CDDPelican Marsh CDDSumter Landing CDDVillage Center CDDVillage CDD #1Village CDD #2

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BREAKTIME FUN -N- GAMES

KEY STAFF CONTACTS:

As a member of Preferred your first call should always be to your agent, if however you need help beyond your agent please feel free to contact us as indicated below:

Marketing:marketing@publicrisk.com321-832-1455Kurt Heyman

Operations:ahansen@publicrisk.com321-832-1510Ann Hansen

Loss Control:mstephens@publicrisk.com321-832-1658Mike Stephens

Claims:claims@pgcs-tpa.com866-683-7710Julius Hajas

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