Every service a public entity provides and every action it takes exposes it to losses from potential lawsuits, not only judgments and negotiated settlements, but also from defense costs. The scope of liability, especially for law enforcement and public officials, has expanded greatly in recent years as courts increasingly hold local governments responsible for negligent and wrongful acts, personal injuries, property damage, and civil rights violations. Reduced losses from natural disasters, lawsuits, and other unexpected occurrences. Greater insurance availability and lower premiums freeing up funds for other services. Increased potential for economic development and rural revitalization resulting from improved efficiency and effectiveness.
Officials can take steps to prevent losses and to keep losses that do occur to a minimum.
Benefits outweigh the costs. Elected and appointed officials should consider the consequences of every decision relative to risk management. Risk financing pools, better known as insurance pools, may be used to help provide governments with consistent, effective, and possibly lower cost insurance coverage. Pools also may provide risk management and loss-reduction services. This might be an excellent approach to risk management for some cities and counties, especially those without resources for a risk management staff.