Public Entities & Schools


Public entity insurance
Coverage for public entities such as municipalities, counties, state, provincial and federal governments and their agencies. Such entities have significant property and casualty exposures. Many of their exposures (such as police and fire department liability, road design and maintenance, public beaches and playgrounds) are unique and difficult to insure.

Reciprocal Insurance Exchange
An insurance market of reciprocal agreements of indemnity among persons known as subscribers. The exchange is effected through an attorney-in-fact common to all persons. Subscribers agree to become liable for their share of losses and expenses incurred among all subscribers and authorize the attorney-in-fact to exchange insurance with the other subscribers, pay losses, invest premiums, recruit new members, underwrite new business, receive premiums and effect contracts of reinsurance.

Reciprocals, like other insurers, are regulated to guarantee their financial stability. However, they do have certain advantages over both informal pooling arrangements and traditional insurers. · Friction costs such as commissions and broker fees are reduced or eliminated · Direct Access to the wholesale reinsurance marketplace is available · Capital and surplus requirements are drastically reduced or eliminated · Tax free status allows investment income to accrue directly to the members to help pay claims · The members determine what kind of insurance their reciprocal will provide and what additional services will be offered · Reciprocals are not-for-profit organizations and, unlike private industry, are only motivated by the desire to serve their membership.

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