on the City Council and the Board of Directors of a local Utility District. I have seen several settlements and the following summarizes my experience:
Both those entities carried general liability insurance. Whenever there was a lawsuit, whether it was employment related or other claim, the insurance company provided the legal defense.
They alone determined if the claim was valid and the strength of the plaintiff’s case. Sometimes we went to court and sometimes we settled out of court.
If we disagreed with their decision to settle, we could go it alone, but we would then have to hire counsel at our cost and be exposed to a loss that would come out of the taxpayers’ pocket.
I did not see a lot of these, but we never took the risk of going it alone and exposing the taxpayers. We always took the insurance company’s advice.
There were times when we felt the settlement was some admission of wrongdoing on our part or the case was frivolous. But the settlement was paid by the insurance company when they alone determined it was more cost effective than going to trial.
Just because the insurance company paid off does not mean there was a valid claim .
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