Ask Joe Eisner: Are municipal or school district public library boards solely responsible for arranging for insurance coverage on the library facility and its contents?

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Please note: The following should not be construed as legal advice, for which the services of counsel should be obtained:


 

Q. Are municipal or school district public library boards solely responsible for arranging for insurance coverage on the library facility and its contents?

 A.  No. Regardless of type of  library, public library boards of trustees have a corporate entity entirely separate from  that of the municipality or, in the case of a school district public library, from the board of education.  Library trustees are public officers:

Public officers having by law the care and custody of the  public buildings and the other property of a municipal corporation, may insure the same at the expense of such corporation (General Municipal Law s79).

As such, they have the responsibility of exercising due diligence, particularly since it is well settled that they are independent entities.

The Comptroller has stated that General Municipal Law s79 is permissive: “It is simply authorization to contract for such insurance (59 St Dept Rep 363 (1938)… The Department believes that failure to obtain adequate fire insurance coverage… may be imprudent” (15 Op State Compt 49, 1969).Thus, public library trustees  have the responsibility of exercising due diligence.

In the case of a municipal public library, the library board should discuss with the municipal governing authority whether the municipality’s property and contents insurance cover the library. If not it would be incumbent on the library board to reach an agreement with the governing board as to whether the library should independently arrange for such coverage, at least on contents,  and whether the premium will be reflected in the library’s budget. The strategy outlined below in the Education Department’s Law Division’s and the Comptroller’s  opinions may have some application when  municipal public library boards discuss the issue of property and liability insurance coverage with the municipal governing authority.

Similarly, a school district public library (SDPL) board should consult with the board of education to determine whether the district’s property and contents insurance cover the library, and in what amounts. Where the SDPL is occupying a building whose construction or acquisition was funded by a school district bond issue, the Education Department’s Law Division has stated that where title to a library building lies with the school district, insurance should run to the school district as owner: “If the insurance in the building and contents is to be carried in one policy it would appear that noting… the board of education and the library  ‘as interest may appear’ would be proper to protect the interest of both parties” (ltr, June 30, 1954). “The cost of the insurance on the building would not technically be part of the library’s budget” (ltr, September 9, 1955).

Where a school district board of education and the public library trustees contemplated entering into an agreement to allow the public library use of a district-owned building, the Comptroller stated: “…[A]s a practical matter, since the school district would stand to lose if the library building were destroyed, it would be in the best interest of the school district to pay the property insurance premiums out of the school district budget. However, if the school district were that its interests would be properly protected if the premiums were paid by the library, we found no legal barrier to such an arrangement. It is our opinion that the same conclusion would apply to the manner in which liability insurance premiums were handled. Therefore, an agreement which places responsibility for liability and property insurance upon the library would be proper if the school district felt its interests would be properly protected….” (Op State Compt 77-823, 1977 (unreported)).

Despite the independence  of both types of public libraries, there appears to be a joint responsibility on the part of both the municipal governing body, the school district board of education, and the applicable type of library to determine that each board is acting in a manner which, in case of a loss,  will protect the interest of the taxpayers who support each type of library. It would also be prudent to come to an agreement whereby at regular intervals (perhaps every two years) a mechanism exists where the coverages are reviewed by both boards and necessary adjustments are made in the then existing coverage amounts.


Please note: If you have any additional questions about this topic, please contact Joe Eisner at the e-mail/phone above.

 

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