Request By:
Mr. Fred B. Creasey
Executive Director
Kentucky Association of Counties
205 Capital Avenue
Frankfort, Kentucky 40602
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You refer to OAG 77-609, in which we concluded that a fiscal court has no authority to purchase liability insurance on a comprehensive general basis. We pointed out in that opinion that a fiscal court must follow the express statutes authorizing insurance coverage for county operations.
You ask us whether that opinion should be modified in view of the enactment of H.B. 68 (Ch. 22, Sec. 3, 1979 Ex. Sess.), which is now designated as KRS 65.150. That statute reads:
"(1) A county or city or urban-county government may expend funds necessary to insure any of its employes and officials against any liability arising out of an act or omission committed in the scope and course of performing legal duties.
"(2) A county fee officer and his deputies and assistants may be insured pursuant to subsection (1) of this section, or the officer may expend excess fees to insure himself and his deputies and assistants against any liability arising out of an act or omission committed in the scope and course of performing legal duties.
"(3) Any parties eligible to expend funds for insurance pursuant to this section may associate for the purpose of insuring themselves."
We think you are right. It is our opinion that KRS 65.150 expressly provides that any fiscal court, inter alia, may expend funds out of its treasury to insure any of the county's employees or officials against any liability arising out of an act or omission committed in the scope and course of their performing legal duties.
As we said in OAG 77-609, a county is clothed with sovereign immunity. Section 231,
Kentucky Constitution, and Cullinan v. Jefferson County, Ky., 418 S.W.2d 407 (1967) 408. Thus a waiver of this immunity can only be through an express act of the legislature. And here KRS 65.150 is that express act of waiver or exception to immunity.
Rather v. Allen County War Memorial Hospital, Ky., 429 S.W.2d 860 (1968) 862. See
George M. Eady Co. v. Jefferson County, Ky., 551 S.W.2d 571 (1977) 572, in which the Supreme Court of Kentucky reiterated its ruling that counties enjoy sovereign immunity.
The term "comprehensive general liability insurance", as used in the insurance trade, would cover any and all acts of omission or commission of county employees and officials while engaged in the performance of a statutory duty or governmental function, ministerial in nature. See
Williams v. New Mexico State Highway Commission, 82 N.M. 550, 484 P.2d 770 (1971) 771, involving a statute almost identical in principle with KRS 65.150. The Court of Appeals of New Mexico referred to the policy obtained under the statute as "the so-called revised standard comprehensive general liability insurance policy adopted in 1966 by the insurance industry."
In 45 C.J.S., Sec. 824, p.p. 872-873, it is written that "The risks insured against under a policy of liability insurance are determined by the terms of the policy, and the provisions of the statutes which are deemed a part thereof. . ." See
Old Republic Insurance Company v. Begley, Ky., 314 S.W.2d 552 (1958) 556, on this latter point.
In summary, we conclude that in enacting KRS 65.150, the General Assembly has authorized fiscal courts to procure comprehensive general liability insurance to cover the specific areas of risk spelled out in the statute.
OAG 77-609 is modified accordingly.