Traverse City Record-Eagle

Archive: Friday

EDITORIAL

The issue: Inland Township suspends fire service.

Our view: Officials tripped up by insurance details.

July 20, 2012

Editorial: Insurance woes should be a lesson

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When you're sick, you see a doctor. When your car's sick you take it to a mechanic. When you want to build a house, you hire a contractor. In short, when you face something outside your area of expertise, you get expert advice.

When Inland Township wanted to do extensive remodeling work on a building purchased as a new township hall, it hired an outside contractor and subcontractors, which was obviously the right thing to do.

What they didn't do, however, was tend to all the needed paperwork that is part of doing public business and now they're paying the price.

The township failed to obtain certificates of liability and worker's compensation coverage from the contractor and subcontractors on the township hall project in a timely way, and when an auditor from Liberty Mutual insurance, the township's worker compensation carrier, came calling in May, officials couldn't product produce the necessary documentation.

The insurance company then billed the township $20,800 compared to its normal yearly bill of just $1,100, including not just township employees but every contractor and subcontractor who worked for or through the township in 2011.

Inland officials voted last week to suspend fire-fighting operations after Liberty Mutual canceled its workers compensation coverage for nonpayment. The suspension of fire services should only last a couple weeks and neighboring Almira and Homestead townships agreed to cover Inland's emergency calls. Township officials collected some certificates and managed to cut the bill to $10,600.

Obviously, this is a lesson the Inland Township folks won't forget any time soon. And hopefully, it won't be lost on elected officials in small local governments who may not be familiar with the details of doing the public's business.

While there are classes and orientation sessions for newly elected local officials held by the Michigan Townships Association and other entities, a couple sessions here or there can't cover everything. There are details upon details and they must be attended to in a timely way.

Just as someone building a home for the first time would be foolish not to seek advice from a friend or relative who has been through the process before, local officials must do the same thing. Talk to elected or appointed officials from other local governments who have been through it before, form an in-house committee to worm out the details of a big project, create a checklist to ensure even the small points are addressed, ask lots of questions.

Getting it right often means realizing there's still plenty to learn.

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