Do Federal Employees Need Professional Liability Insurance? Myth And Reality

by Government Worker FI | Last Updated: February 17, 2021

What if you had to testify in front of Congress? 

I can’t think of anything that terrifies me more as a federal employee. We’ve all seen Congressional testimonies where devoted public servants are verbally flogged on television. Not only are Congressional testimonies extremely stressful, but did you know that you might need to pay for your legal counsel out of your own pocket?

While you can’t control whether you get called in front of a Congressional committee, you can control how it affects your finances. 

Note- As always, this is a personal blog and not legal or human resources advice. This post represents my own personal views and does not represent the views of the US Government. This is a sponsored post. However, I have been thinking that I should write an ultimate guide to professional liability insurance for a long time and am happy for this opportunity to share my own thoughts with you on this topic.

My experience with professional liability insurance

When I first became a supervisor in the federal government, I remember I had a phone call with a supervisor in another office on the other side of the country. He congratulated me in my new role and told me to get professional liability insurance ASAP.

I had no clue what he was talking about.

I had never heard anyone in my office talk about liability insurance. Insurance against what? Also- what did I get myself into and why did I ever move into management?

So I followed up with him with some more questions. I learned that

However, I didn’t pursue it any further at the time. I wasn’t sure that I needed it if no one else I knew had it. And would my supervisor really sign the reimbursement if no one else had it?

Before I was a manager, I belonged to the union. I know that sometimes “union” is a dirty word. And if you’re a federal employee who resents the union because they protected a problem employee who wasted government funds, I understand your frustration. But I paid union dues (in part) because I knew that if I got in a bad situation at work, they’d have my back. (The union also did great things for everyone in my office such as setting clear rules for lunch breaks and advocating for personal wellness time).

I miss knowing that someone would have my back if things got really bad. Professional liability insurance is one way that you can construct your own safety net if you don’t have access to a union.

What is professional liability insurance for federal employees

Professional liability insurance provides legal counsel for federal employees who face investigations related to their jobs. It also provides legal counsel if you get sued in the performance of your duties and DOJ decides not to represent you. Finally, it pays damages, with or without DOJ representation, if you are held liable in a civil suit arising out of your job duties.

For instance, as a supervisor, you may face an EEO complaint after disciplining an employee.

Supervisory Duties graphic
The hardest part of being a supervisor in the federal government is understanding all of the applicable regulations

In addition to supervisors, law enforcement officers may also face legal consequences for actions taken during the course of their employment.

While local police officers are often provided legal council through their employee union, federal employees may not have access to a union. Professional liability insurance provides federal law enforcement officers protection for legal consequences that naturally arise from their job.

Depending on the situation, your agency may provide legal counsel for part of the investigation or lawsuit. However, the agency lawyer is representing your agency and is therefore acting in the best interest of the agency. In other words, they may not act in your best interest. Because they represent the government’s interest, they may advocate for a settlement that gets you in trouble even if you did nothing wrong.

Beyond civil litigation, you may also invoke your benefits if you are the subject of an investigation or disciplinary action. Over 95% of the claims that FEDS Protections receives are for Feds needing legal advice, counsel or representation for an allegation made against them leading to an investigation, disciplinary action, or civil lawsuit.

How does professional liability insurance work?

In general, all insurance works the same way. You pay a little bit of money (premium) over the course of your life to protect your wealth for an event you hope never happens. For example, health insurance protects you from bankruptcy if you get a chronic illness, and life insurance helps protects your family from bankruptcy in case of an untimely death.

Liability insurance protects you from bankruptcy in case you get sued. Both federal employee professional liability insurance and malpractice insurance protect you against lawsuits that arise because of actions you perform at your job.

All US doctors carry malpractice insurance. Sometimes doctors make mistakes that cause bodily injury and are therefore subject to lawsuits.

In the unfortunately (and hopefully unlikely) even that a doctor is sued for malpractice, she does not need to worry about losing all of her wealth as her insurance would kick in to represent her in court and pay for damages.

Professional liability insurance for federal employees is similar to medical malpractice insurance in that it helps protect your wealth in the case of litigation. The insurance pays for your legal defense costs and settlement if you lose the case.

Government employees have very unique and specialized jobs that opens them up to many different types of lawsuits. For example, the jobs of civilian employees are constitutionally protected, meaning that they have a lot more legal protections against termination. (This is just one of the great benefits of federal employment). Even if you do everything right as a supervisor, you may face a legal challenge. PLI is an insurance program tailored especially for feds to protect them against these unique legal situations.

Myths about federal employee protections, liability, and insurance

Myth 1: I don’t need professional liability insurance because I follow all the rules

I spend a lot of time studying the rules regarding federal employment. I take a lot of pride in my job and would never execute a prohibited personnel practice or take a disciplinary action against one of my employees that wasn’t well documented and justified.

Can you relate to that? Perhaps you’re one of the “good” feds like me and don’t think you need liability insurance because you’re too smart to make a mistake. Unfortunately, personnel issues and other issues sometimes become like a tornado and pull lots of innocent people into their destructive spiral.

One of my saddest moment as a federal employee was watching one of our Agency’s leaders have to testify in front of Congress after a sexual harassment scandal in our Agency. While I didn’t know this leader personally, everyone spoke highly of her. I also watched her dedication to our Agency for years from afar. While she was very far removed from the crimes that were committed, she was forced to answer difficult questions in front of a national audience. I could see her sadness and frustration as her answers were interrupted and misquoted. It looked horrible.

Congressional hearings seem to affect every federal agency and frequently the people testifying may have had little control over the events that led to them. Remember the GSA boondoggle? Do you think the executives who resigned in that wake made the decision to buy $7,000 sushi using taxpayer money?

While I used some dramatic examples in this paragraph, I think the reality is that any supervisor could get caught in a situation where they need to justify their actions. (Even if they did not do anything wrong).

While dealing with problem employees is always going to be draining, having professional liability insurance for federal employees allows you to breathe a little bit easier that somebody will have your back if you get called to court.

Myth 2: As a supervisor, the federal government “has your back” when dealing with personnel issues

Shortly after I became a supervisor, I had a fellow supervisor tell me to stay away from Employee Relations. (For those of you who don’t know, ER is the hotline supervisors call to get legal/HR advice for dealing with employees with performance/misconduct issues). His quote was, “They tell you what to do but it’s your hand that goes into the frying pan.”

Human Resources graphic

To be fair, I have gotten along well with ER in the few situations where I’ve had to deal with workplace issues. But my fellow supervisor was right. ER is telling you how to handle the situation, but you’re the one ultimately responsible for making it happen. 

Myth 3: I don’t need professional liability insurance because I have immunity under the Federal Tort Claims Act

It is true that you have immunity under the Federal Tort Claims Act for certain types of lawsuits. However, you can be sued in your personal capacity for actions you perform while on duty (a “Bivens action”).

Myth 4: All professional liability insurance for federal employees is the same

False. You will definitely want to read the policy to see what is included and what is excluded in your liability coverage. There are differences between the three major carriers of professional liability insurance. You’ll want to make sure that your policy has the right coverage for your job and potential areas of liability.

In addition to differences between policies, you might also want to look into how different companies treat their customers. Do you feel comfortable contacting them with a question? Ultimately if you ever have to use your policy, you’ll want to know that you’re working with a friendly and competent organization.

False. According to the Office of the Inspector General, “Government attorneys represent the agency only and may not act on behalf of an employee.” It is worth noting that OIG audits can be politically motivated. With the tense political climate we are currently living in, it is possible that many federal employees could get pulled into an OIG Audit. As I write this post, there are OIG Audits on the coronavirus vaccine, the 2020 election results, and the response to the Capitol breech on January 6, 2021. It’s not difficult to see how many federal employees could be audited, even if they did nothing wrong.

Recently, U.S. Ambassador for Ukraine, William Taylor, had to invoke his professional liability insurance policy to cover his legal expenses when he was required by Congress to testify in the Impeachment hearing.

Frequently asked questions about professional liability insurance

Can federal employees receive reimbursement for professional liability insurance?

Yes. Certain federal employees can receive partial reimbursement for professional liability insurance. The federal government will reimburse up to 50% of the annual premium for the following federal employees:

Need help getting your costs reimbursed? FEDS Protection has a great resource page about how to apply for reimbursement at your specific Agency.

Are there restrictions on who can have a policy for professional liability insurance?

No. All federal employees are eligible for a professional liability insurance plan. (However, the government will only reimburse certain groups of federal employees).

While I spent most of this post talking about why supervisors may wish to purchase professional liability insurance, certain other occupations in the federal workforce may wish to consider getting a policy.

For example, a wildland firefighter could potentially be charged with manslaughter.  

Obviously, supervisors and law enforcement officers have the largest liability risks. However, it may be helpful to apply the “Dateline test” to your job. Could you imagine a disgruntled customer complaining about you on Dateline? If you can imagine being a scapegoat for an upset taxpayer, you may want to look into a professional liability insurance policy would help you sleep better at night.

Can former federal employees obtain professional liability insurance?

Yes. Both former federal and current federal employees can obtain insurance coverage. Not all insurance companies may offer policies for former employees, check the web site of your insurance company for more information.

Did this article make you think you need professional liability insurance for federal employees? FedsProtection has over 20 years of defending federal employees and policies start at less than $1 per day.