Towns Work to Ensure They Won't Be Caught with Too Little Liability Insurance

Article excerpt

Byline: Steve Warmbir Daily Herald Staff Writer

To Marc Hummel, it was like his town got struck by lightning.

But the lightning that zapped Hummel, village manager of Hanover Park, and residents there came in the form of a $6.75 million jury verdict against the village in a case involving a motorcycle accident in town.

Hanover Park only had $1 million in insurance coverage at the time of the accident eight years ago, so homeowners will pay the rest.

Buffalo Grove also got a shock this year when a jury awarded a $3.9 million for negligence by the village when a little girl fell into a village reservoir and drowned.

Buffalo Grove is working to get the judgment set aside, but if it's upheld, it will be completely covered by insurance.

The different outcomes show the difficulties some towns face in deciding how much liability insurance coverage to buy.

Buy too little and face the wrath of taxpayers when they are asked to cough up money for a large legal settlement or judgment not covered by insurance.

Buy too much and the money spent on insurance is taken away from something else that may benefit residents, whether it's an additional police officer or a road repair.

Adding to the uncertainty is a recent court decision by Cook County Judge Kenneth Gillis. Gillis ruled that a 1995 law that put a $500,000 cap on what can be awarded for pain and suffering in civil lawsuits was unconstitutional. The matter is destined to be decided by the Illinois Supreme Court. The cap applies only to lawsuits filed after the law was passed.

Buffalo Grove is a longtime member of the Intergovernmental Risk Management Agency, an insurance cooperative of 68 towns and other governmental agencies.

Hanover Park joined IRMA last year.

All IRMA members this year have $7 million in liability coverage. …