Municipal Insurance

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Definition - What does Municipal Insurance mean?

Municipal insurance is coverage for local governments, such as small towns or counties. It provides protection for liabilities like damage or loss caused by public property, public institutions, or a public official such as a police officer. This insurance coverage can also protect local bonds when their value is below par.

Insuranceopedia explains Municipal Insurance

Running municipal institutions carries various risks. A public school could catch on fire, for instance, or the town veterinarian can give the wrong medicine to a pet. Municipal insurance provides liability coverage for these and similar events.

Municipal insurance is considered special because of the level of day-to-day risk involved in local governance. In fact, in the 1980's, insurers denied coverage to a number of towns because of previous high number of claims involving them. Thus, insurers often promote risk management training with local officials when negotiating for coverage so as to minimize the number of claims that will be filed.


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