In 2016, the legislature enacted Public Chapter 749, which authorizes counties to purchase insurance policies in place of bonds for both officials and employees. Purchase of such insurance policies is purely optional and at the discretion of the county legislative body. Under the new law, the county legislative body can opt to cover all or some of the county's officials and employees using insurance rather than bonds.
Under the amended law, codified at T.C.A. § 8-19-101, should a county choose to purchase insurance, the insurance policy must provide minimum coverage of $400,000 per occurrence and insure the lawful performance by officials and/or employees of their fiduciary duties and responsibilities. Each covered official and office must be named in the policy.
Counties must file a certificate of insurance evidencing the officials and offices covered, the amount of coverage and the type of coverage provided in the register's office. Filing the certificate of insurance in the register's office satisfies the requirements for filing official bonds by the named officials.
Choosing the insurance option does not affect the liability limits provided in the Tennessee Governmental Tort Liability Act.