Insurance Local governments no longer enjoy the blanket protection of sovereign immunity. Thus, local government officials need to be more aware than the general public of risks taken and ways to manage risks. Through risk management. It is planning for the negative consequences of any decision, process, or action. While it provides a basic level of risk coverage, insurance alone is not sufficient protection from negative consequences.
Risk management is designed to identify and rectify possible situations for negative consequences.
Risk management provides improved protection and may lower insurance costs. Need for Risk Management Dwindling tax bases and Federal funding cutbacks, plus declines in agricultural and natural resources income, have reduced funds available to most local governments. Also, residents of smaller, rural jurisdictions are demanding the level of government services enjoyed by their larger, urban counterparts. Likewise, there are new costs and risks associated with the economic development and rural revitalization efforts of smaller counties and municipalities. On top of this, insurance costs have soared and many coverages are no longer available to local governments.