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Trust Matters May, 2019

​Emergency Power Systems

Employees on Special Errand

Health Insurance Renewal Reminder

Terminating or Demoting a Public Employee?

The Importance of Protecting Evidence in Subrogation Claim Handling


Emergency Power Systems

For critical facilities, the need for backup power is magnified

When a power outage occurs, businesses and facilities are at risk of losing critical equipment and experiencing significant down time due to business interruption. While natural hazards are a familiar threat, another lesser known risk to continuous operation is the breakdown of electrical and mechanical equipment, which can be equally disruptive. Being prepared with emergency power capabilities and executing a contingency plan is essential to keeping operations running smoothly.

Critical facilities are no stranger to this drill. With proper planning, back-up equipment and a regular maintenance plan, they continue delivering expected services without missing a beat when interruption to power supply occurs.

What is a critical facility?

A critical facility is defined as a building that is intended to remain operational in the event of a power outage, requiring continuous operation for purposes of public safety, emergency management, national security or business continuity. This includes:

  • Data centers
  • Electronics manufacturers
  • Facilities that store perishable products
  • Food processors
  • Government facilities
  • Hospitals
  • Police, fire, rescue, emergency dispatch and ambulance facilities

Plan ahead, prepare for the unexpected

Interruption of power, although a common occurrence, is one of the easiest to mitigate when facilities are prepared before an event happens. For critical facilities and many businesses, the importance of planning ahead cannot be over emphasized. An assessment should identify how long a critical facility must remain functional under emergency power and what equipment must be operational.

Many critical facilities have emergency power distribution systems that are designed to receive power from an on-site emergency power source when the main source of power fails. Their emergency power comes from generator sets or an uninterruptable power supply (UPS) for power production or storage.

Testing and maintenance of emergency generators is a critical step in planning and preparing for loss of power. It is not uncommon for backup generators to fail to start when needed. Taking the following steps can help ensure critical facilities are prepared when a power interruption event occurs.

  • Install emergency power capabilities to keep critical operations and systems online throughout an outage
  • Develop a formal contingency plan that responds to a power interruption event
  • Perform regular maintenance to emergency power generators, batteries, switchgear and UPS systems
  • Complete scheduled testing of emergency power systems and conduct emergency drills to simulate a power outage event
  • Ensure critical employees are trained in emergency procedures

An effective emergency power plan is one that provides redundancy, involves scheduled maintenance and reduces vulnerability through well-planned mitigation measures.

Article courtesy of Mutual Boiler Re; the article was originally published in Gears in Motion, Mutual Boiler Re's newsletter.

Employees on Special Errand

Generally, when employees are “off the clock," the employer's workers' compensation benefits would not follow them away from the workplace. However, there are some instances where the employer could be found liable for workers' compensation for employees who are on special errands or in areas controlled and maintained by the employer.

For instance, if you ask an employee to drop a letter off at the post office on the way home and they are in accident on the way to the post office then they would be covered. The “special errand" would end once the employee had completed the errand. Injuries in the parking lots, sidewalks and areas surrounding the workplace that are controlled and maintained by the employer would also be covered. 

Other instances would include travel to conferences, attending meetings, driving personal vehicle to pick up items for the benefit of the employer.

If your employee during their employment, is performing a task for the employers' benefit, an accidental injury or specific traumatic event involving the back may be covered as well. As always should you have any workers' compensation questions, contact us at 919-715-4000. ​

Health Insurance Renewal Reminders for 2019

The North Carolina League of Municipalities' Risk Management Services Board of Trustees set final rates for the Health Benefits Trust programs at their February 21st meeting. These rates are effective July 1, 2019 through June 30, 2020.

Plan​Overall Final Rate Change​
Medical  11.5%
Dental all plans    2.3%
Vision all plans    0%
Short-Term Disability    0%
Long-Term Disability    0%
Basic Life     0%


New ID Cards:  All medical groups will be receiving new ID cards this year, while the old card will continue to work please note that the new card has additional information that the provider will need for quicker processing of claims. With the printing and mailing of new ID cards it is imperative that plan changes and open enrollment are completed by June 1, 2019. 

Complementary or Alternative Medicine (CAM) Changes: All covered employees and their covered dependents will be offered the CAM program for a second year. This program provides coverage of complementary and alternative treatments for a $30 copayment with a limit of $1,000 per plan year.

Currently covered under the CAM Program:

  • Acupressure
  • Acupuncture
  • Ayurvedic medicine
  • Biofeedback
  • Energy medicine (see Qi Gong and Reiki)
  • Homeopathy
  • Hypnotherapy
  • Massage Therapy
  • Naturopathy
  • Yoga therapy

​Change or Termination Proceedure information

30-Day Notice for Plan Changes: If you are interested in changing your medical plan or any other employee benefit plan, please email Lisa Ervin at or Julie Hall at

Notice of Termination: The plan requires written notification of any benefit termination by 5/31/2019. Notifications received after 5/31/2019 will be subject to a 2% exiting fee based on current year premium. Please reference the Inter-local Agreements.

Terminating or Seriously Demoting a Public Employee? Municipalities May Need to Consider Offering a Name-Clearing Hearing. (Cannon v. Village of Bald Head Island, 891 F.3d 489)

There are several items that municipalities need to consider when terminating the employment of a public employee such as due process, discrimination, retaliation and reasonable accommodation(s). Once those items have been considered and vetted, municipalities need to take terminations a step further.  If the termination threatens a public employee's reputation and/or future employment, it is likely that there has been a violation of employee's liberty interest under the 14th Amendment to the U.S. Constitution. If a violation has occurred, a name-clearing hearing must be offered before any negative or stigmatizing information is made public. It is important to understand when a name-clearing should be offered to a public employee.

Typically, a municipality requires as part of due process that a pre-dismissal conference be held. The pre-dismissal conference is a time in which the employee can dispute or respond to alleged policy violation(s). Prior to a pre-dismissal conference, a pre-dismissal notice is given to the employee that notes the policy violations and gives the employee a specific date, time and location for the formal pre-dismissal conference. The pre-dismissal conference notice should include the offering of a name clearing hearing along with a specific date, time and location. The name-clearing hearing cannot be in conjunction with the pre-dismissal conference because it must be open to the public. The name-clearing hearing allows the employee to invite anyone to the hearing so that they can clear their name, publicly, regarding the allegations that have been made against them so that they are not stigmatized from obtaining future employment opportunities.

Following the pre-dismissal conference, information from this meeting is forwarded to the governing body (mayor-council form of government) or town manager (council-manager form of government) to make the final decision about the employee's employment. There is an exception to the rule – depending on the form of government, if the governing board or town manager does not terminate the employee after reviewing the facts of the termination and the information presented by employee during the pre-dismissal conference, the name-clearing hearing should be canceled. No dismissal has occurred, so no negative or stigmatizing information has been made public.

For general employees, if the governing board or town manager moves forward with the termination and a dismissal letter with negative or stigmatizing information (i.e. listing policy violations) is issued, a name-clearing hearing must occur. If a dismissal letter does not contain negative or stigmatizing information, no name-clearing hearing is required. Municipalities that issue dismissal letters, may want to consider not listing policy violations or list the reasons for dismissal “as discussed in the pre-dismissal conference." If no negative or stigmatizing information is made public in a dismissal letter, no need to offer a name-clearing hearing.

For sworn law-enforcement officers, a name-clearing hearing is always required. This requirement is because the information is reported to the North Carolina Criminal Justice Standards on the F-5B (LE) specifically under the section requiring a “detailed description of reasons for investigation." Further, if negative or stigmatizing information is reported on the F-5B (LE) due to a resignation, the same requirement for offering the name-clearing hearing stands.

If you have questions about name-clearing hearings as part of due process or about pre-dismissal conference's, please reach out to the League's Human Resource Consultants Heather James at or Hartwell Wright at

Additionally, the League will be offering training at Garner Town Hall about the name-clearing hearing process for human resources professionals on June 18, 2019. More information is available online.​

The Importance of Protecting Evidence in Subrogation Claim Handling​​

Subrogation is a legal doctrine in which one person is entitled to enforce the existing or revived rights of another for their own benefit. A right of subrogation typically arises by operation of law, but also may arise by statute or agreement. Elements of subrogation include that the product was defective, that this product was in the same condition as it was when manufactured, that the product was rendered unreasonably dangerous as a result of the defect that proximately caused the damages for which subrogation has been undertaken and finally, the nature and extent of those damages.              

Successful subrogation depends on the preservation of evidence – and later analysis of the evidence. This information is very important to the process.  It is essential that evidence is retained and the chain of custody is detailed appropriately; likewise, strict packaging and transportation measures must be in place to protect the evidence's integrity.  Adhering to these protective measures from  the beginning of the claim, will help the subrogation process move forward – a subrogation claim is only as strong as its weakest link, and that weakest link is almost always created or discovered early on, when memories are fresh and evidence is available.           

For example, in a vehicle tire blow-out claim, in order to successfully pursue subrogation against a manufacturer, that claim would not proceed very far without appropriate evidence. In this case, the minimum evidence required would be the tire in question, the original purchase invoices that show the model number and serial number of the product, and if available, the date of its manufacture. Unfortunately, often evidence remains behind where it fails to be properly retained, or it is discarded by the repair shop. It is imperative to ensure that the evidence is properly retained and available for inspection by our expert. The carrier is responsible for educating members and providing them with the explanation of why this process is important. Without their cooperation,  there is little hope for successfully recovering their deductible amount.

The company needs to retain the evidence and have it tested as needed to prove negligent manufacturing procedures, but cooperation from the member is an important step in this process. It may be beneficial for the adjuster to pick up the evidence, if physically possible, while still out at the scene. This may help in assuring that evidence is preserved.  By prioritizing the proper retention and processing of evidence, a subrogation claim's potential increases dramatically. ​​