The Finance and Administration Cabinet (FAC) Office of Policy and Audit oversees and coordinates risk management and insurance responsibilities among various state agencies in accordance with KRS 42.0651. Our Office provides guidance on the management of the State Fire and Tornado Insurance Fund established in KRS Chapter 56 and other risk management, insurance, and self-insurance programs or functions, as directed by the Secretary of the Finance and Administration Cabinet. In addition, the Office of Policy and Audit coordinates insurance needs of FAC agencies and submits insurance coverage requests to the Environmental and Public Protection Cabinet (EPPC) Office of Insurance, State Risk and Insurance Services Division.
Self-Insurance
The Commonwealth has three major self-insurance programs: the State Fire and Tornado Insurance Fund, the State Self-Insurance Fund for Workers Compensation benefits, and the Kentucky Employees Health Plan.
State Fire and Tornado Fund
The State Fire and Tornado Fund, which provides property and casualty coverage, is a self-insurance fund established to account for and finance losses arising from damages to State buildings and personal property. This program provides coverage up to a maximum of $500,000 per occurrence of loss for each insured subject of risk. Reinsurance is purchased for claims in excess of $500,000 as permitted by KRS 56.160. The EPPC State Risk and Insurance Services Division, issues Fire and Tornado certificates of insurance to agencies for property covered under the fund. The Kentucky Office of Insurance: State Risk and Insurance Services Division website provides additional information relating to the Fire and Tornado Fund.
Workers Compensation Program
The Workers Compensation Program is a self-insurance program to benefit state employees who have work related injuries. This fund is authorized by KRS 18A.375 and covers all persons, including elected public officials, who are regularly employed by the executive, judicial, and legislative departments of government, except employees of the
Transportation Cabinet and the University of Kentucky who have their own self-insurance workers compensation funds. The fund also covers volunteer firefighters and others specified in KRS 18A.370. The Personnel Cabinet website provides additional information about the Workers Compensation Program.
The Kentucky Employees Health Plan
The Kentucky Employees Health Plan is a self-insurance program that provides health insurance benefits for state employees, local boards of education employees, quasi governmental agency employees, retirees of the Kentucky Retirement Systems, Kentucky Teachers’ Retirement System, Kentucky Judicial Retirement System, and the Kentucky Legislative Retirement System. This plan is authorized by KRS 18A.225. The Kentucky Employees Health Plan website provides additional information about the Kentucky Employees Health Plan.
Commercial Insurance
Master Auto Policy
A Master Auto policy is procured to cover liability for state owned vehicles and mobile equipment. The Commonwealth of Kentucky self-insures for physical damage and collision coverage for state owned vehicles. Universities are covered under a separate insurance policy. In limited circumstances, the Office of Policy and Audit approves purchases of excess liability and/or physical damage coverage as part of the Master Auto Policy.
Other Coverage
The EPPC State Risk and Insurance Services Division and the FAC Office of Policy and Audit approve purchases of commercial insurance and public official bonds for Executive Branch agencies. The FAC Office of Procurement Services also approves award contracts, which are required for purchases of insurance costing $1,000 or greater. Purchases of insurance costing $10,000 or greater are subject to KRS 45A bid requirements specified in KRS 45A.022.
The table below shows types of insurance coverage that the Commonwealth has purchased to meet the needs of specific state agencies. The EPPC State Risk and Insurance Services Division can provide additional information if your agency determines that it would like to minimize a risk through the purchase of insurance coverage. FAC agencies must contact the Office of Policy and Audit if additional insurance coverage is desired.
Commercial Insurance Policies:
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Aircraft Liability |
Foster Parent Liability |
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Airport Liability |
Inland Marine Computer Insurance |
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Boiler and Machinery Coverage |
Legal Malpractice |
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Business Interruption |
Medical Accident Coverage |
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Commercial Crime Coverage |
Medical Professional Liability |
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Commercial General Liability |
Physicians and Dentist Professional Liability |
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Day Care Liability |
Public Officials Liability |
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Directors and Officers Liability |
Special Events Coverage |
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Employment Practices Liability |
State Employee Life Insurance |
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Errors and Omissions Liability |
Vehicle Liability including Off Road Vehicles |
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Fiduciary Liability |
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