Sovereign immunity limiting the liability of governmental entities is not commonly understood. An insurance carrier recently asked me to opine on the appropriate reserve on an underinsured motorist claim where the insured sustained serious injury in a vehicle accident caused by a PennDOT employee who swerved left of the center line. I explained that the reserve should consider a limit on PennDOT’s liability at $250,000. As this was the this manager’s first exposure to sovereign immunity, I provided the following as his introduction to the government’s ability to limit their exposure.
Sovereign Immunity Act
The Sovereign Immunity Act is a bar to an action against governmental parties (the Commonwealth and local governmental entities) for damages arising out of a negligent act where the damages would be recoverable under the common law or a statute creating a cause of action if the injury were caused by a person not having available the defense of sovereign immunity.
42 Pa.C.S.A. § 8522 and 42 Pa.C.S.A. § 8542 set forth exceptions to sovereign immunity. First amongst the exceptions to sovereign immunity is vehicle liability. The defense of sovereign immunity may not be raised to claims for damages caused by the operation of any motor vehicle in the possession or control of a Commonwealth party or a local agency.
42 Pa.C.S.A. § 8528 sets forth limitations on damages that may be awarded against Commonwealth parties. In actions against the Commonwealth “[d]amages arising from the same cause of action or transaction or occurrence … shall not exceed $250,000 in favor of any plaintiff or $1,000,000 in the aggregate.”
Self-insurance
A governmental entity may secure a certificate of self-insurance. When a governmental entity files a resolution of self-insurance, it obligates itself to pay all benefits required by Section 1711 of the Vehicle Code (75 Pa.C.S. 1711) (P.L. 53, No. 12); and uninsured motorist coverage up to the limits set forth in Section 1774 of the Vehicle Code (75 Pa.C.S. 1774) (P.L. 53, No. 12).
Pennsylvania law requires all Pennsylvania motor vehicle owners to maintain vehicle liability insurance (financial responsibility) on a currently registered vehicle. Vehicle liability insurance covers the property damage or injuries you may cause others in a crash. Vehicle liability insurance is required in the following minimum amounts:
- $15,000 for injury or death of one person in an accident
- $30,000 for injury or death of more than one person in an accident
- $5,000 for damage to property of another person
All self-insurers, except government agencies or authorities, must provide the minimum required security for one secured vehicle, $50,000, and for each additional vehicle, $10,000, up to a maximum of $1,000,000.
This blog is not intended as legal advice. Insurance companies should seek advice from an insurance compliance or legal professional to assist with the matters discussed in this blog. The Nash Group LLC may be engaged for this type of research.
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