Last week, the Georgia Supreme Court issued a decision ruling that the extent of a city’s liability for a motor vehicle collision was $700,000, the statutory limit of liability for a Georgia municipality when two or more people die or are injured in single incident, even though the city had liability coverage in excess of that amount. In this case before the Supreme Court, three people were killed when their vehicle was struck by someone in a stolen vehicle who was being pursued by College Park police in a high-speed chase.
The Georgia Constitution affords municipalities immunity from civil liability when performing governmental functions, what is called “sovereign immunity.” Only the General Assembly, Georgia’s legislative body, has statutory authority to waive sovereign immunity, which they have done for losses arising out of claims for the negligent use of a city vehicle. Code Section 36-92-2 provides that sovereign immunity is waived in that instance up to $500,000 if one person is injured (or dies) and up to $700,000 if two or more people sustain injuries (or die).
However, another provision in the same code section states that those limits do not apply if the city purchases commercial liability insurance, in which case the limits of the applicable insurance coverage would apply rather than the statutory caps of $500,000 and $700,000.
In the case before the Supreme Court, the City of College Park had purchased insurance for automobile liability up to $5,000,000, but the policy contained an exclusion stating that there was no coverage if the defense of sovereign immunity applies.
The Georgia Supreme Court held that exclusion included in the insurance policy kept the limited waiver of sovereign immunity intact and that the extent of liability was therefore the statutory cap of $700,000, not the full limits of the policy, $5,000,000. In doing so, the Supreme Court reversed the decision by the Georgia Court of Appeals which had affirmed the trial court’s finding that the applicable limit was that of the insurance policy, not the significantly lower statutory cap.
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