Newsletter

Cyber Liability Program

By Jim Thyden, Insurance Programs Manager

All members of the Authority have some level of cyber risk exposure. In the last year, members have reported nine cyber incidents to the Authority, many involving significant downtime to member systems, including entire loss of access to servers, email, and phones. It can take weeks for members to fully re-open. In some instances, digital media is never recovered. Additionally, members have been directly defrauded of funds or data has been stolen and released to the public or sold on the dark web. Costs to recover from a cyber incident have ranged from $5,000 to over $250,000 with countless hours of staff time diverted from regular work.

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The Authority’s cyber liability program is insured through Illinois Union Insurance Company, a Chubb subsidiary, and provides limits of $1,000,000 per occurrence/$1,000,000 aggregate per member per protection period, and $10,000,000 aggregate shared by all members. The program also includes a self-insured retention (member responsible for payment) of $50,000 per occurrence. This program provides both first- and third-party coverage for members who have incidents involving the following types of losses:

First-Party Coverages:

• Cyber Incident Response Fund covers expenses to retain a computer forensics firm and for notifications and credit monitoring needs after a breach.
• Business Interruption Loss and Extra Expenses covers business income loss due to network interruption.
• Digital Data Recovery covers the re-creation of data lost due to a network interruption.
• Network Extortion covers extortion monies and associated expenses arising out of a criminal threat to release sensitive information or bring down a network.

Third-Party Coverages:

• Cyber, Privacy and Network Security Liability covers loss arising out of the organization’s failure to protect sensitive personal or corporate information in any format.
• Electronic, Social and Printed Media Liability covers infringement of copyright or trademark, invasion of privacy, libel, slander, plagiarism or negligence arising out of the content on the organization’s internet website.

As soon as a member becomes aware of a cyber incident, the first step is to call the Crisis Hotline at (800) 817-2665 or use the Chubb Cyber Alert^TM mobile app. Members can find this app in the Google Play store as well as Apple’s App Store. The Authority recommends that all staff who may be responsible for reporting claims download the app and register as soon as possible. When registering, use policy number G70164243 001 and enter your agency’s name in the section for “Company name.” Once registered, the user is able to report a claim at any time. When reporting claims via the hotline or email, members should advise of the name of their agency and that they are a member of the California Joint Powers Insurance Authority.

The hotline and mobile app will connect members to specialists that will take their information and route the incident to one of Chubb’s Incident Response Coaches, their pre-approved law firms that are adept in handling cyber matters. The Incident Response Coach will contact the member to assist with the initial event triage, and can subsequently help to:

• investigate the legitimacy and impact of the event,
• manage the legalities and regulatory communications if sensitive and protected information has been compromised, and
• engage the services of other Incident Response Team Specialists.

When a member calls the hotline or uses the Chubb cyber app and there is determined to be a claim, the response coach with whom the member has been connected via the hotline or app can report the claim on behalf of the member to Chubb. The member also has the option of reporting the claim via email to cyberclaimreport@chubb.com.

Additionally, members are entitled to one free hour of consultation in the event of a privacy incident with a cyber incident response coach. Chubb’s Cyber Incident Response Team can work with members on a range of issues resulting from the incident, including legal, computer forensics, call center, public relations, fraud consultation and credit monitoring.

Even with these coverages, the best solution is preventing the loss in the first place. Educating and training staff is crucial in the fight against cyber criminals.

Chubb provides resources that are specific to cyber exposures, including various training tools related to cyber risk, ransomware, hacking, phishing, etc. These resources are geared specifically for IT personnel, risk managers, and others who have responsibilities in this area. Visit the Chubb website to access these resources. Members will need to log in using an access code, 494718.

Additionally, the following three steps can help strengthen your agency’s workplace cybersecurity.

Three Steps to Ensure Workplace Cybersecurity is Everyone’s Business

A chain is only as strong as its weakest link. You have heard that before, I’m sure. Well, it’s true for chains and it’s true for your organization’s cybersecurity program.

Here are three steps for making cybersecurity everyone’s business in the workplace.

1. Start at the top – To create a strong cybersecurity culture, you need leadership buy-in. Leadership must recognize cybersecurity as an identified risk and properly address it through dedicated human and budgetary resources. Cybersecurity risks and best practices should be discussed at regular management meetings. Cybersecurity is no longer an IT issue; it’s a “boardroom” issue.
2. Create a cybersecurity culture – Creating a cybersecurity culture includes promoting awareness and making cybersecurity part of the everyday conversation. Companies shouldn’t just perform the annual training and then shelve cybersecurity issues until next year’s training. Rather, continually bring cybersecurity to the top of everyone’s mind throughout the year.Cyber threats and vulnerabilities affect your employees’ everyday duties, and it is important to create awareness. Create a culture of awareness through regular training, awareness posters in common areas, and integrating cybersecurity into the employee review process.Additionally, don’t treat cybersecurity as an afterthought; start creating the culture during the new hire process. Delegate awareness to a department, put someone in charge, and don’t let anyone pass the buck when it comes to cybersecurity awareness.
3. Training – Training is a must. “Formal” training should be done at least annually with updates, reminders, and notices sent weekly or bi-weekly. The training should be continuous and broken up into bite-size chunks dedicated to specific topics. Ransomware, phishing, password health, access controls, and mobile devices should all be addressed.Training can take many forms: online, in the classroom, and interactive exercises, individually or part of a group. Mix it up and keep it interesting. Make it fun by rewarding employees for being an essential part of the culture. By implementing regular cybersecurity training, you are addressing one of the major risks of a cyber incident – human error.

Cybersecurity tools and software only go so far. Creating a culture of cybersecurity awareness with everyone in your organization is essential to help prevent harmful cyber attacks.

If you have any questions, comments, or suggestions, or if you need assistance navigating these resources, please contact Jim Thyden, Insurance Programs Manager, by email or at (562) 467-8784.

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Property Damage Recovery Program

By Jim Thyden, Insurance Programs Manager

The Authority offers coverage and resources for many individual programs. One of the lesser-known programs is the Property Damage Recovery Program. This program was designed to assist members seeking recovery from a party responsible for damage to property in the member’s care, custody, or control.

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When a member suffers damage to property that is either not covered in the California JPIA property program or the damage is below the deductible amount of the property program, the Authority has partnered with two claim administrators to assist members who wish to recover these monies from those parties responsible for the damage. The claim administrators work directly with members to investigate and pursue recovery. This often makes sense for the member by providing a way to hire professionals who have the expertise to determine fault; work with responsible parties, insurance adjustors, and attorneys; navigate the negotiation process; and collect funds.

More information on each of these programs is available on our website at https://cjpia.org/coverage/additional-programs. If you have any questions, please contact Jim Thyden, Insurance Programs Manager, by email or at (562) 467-8784.

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Managing Property Exposures to Wildfire

Risk from wildfires remain a constant threat for many California JPIA members. While the risk increases during periods of little rain and high winds, significant increases in periods of dryness mean that these events can happen anywhere and anytime. California JPIA members must be prepared to minimize wildfire exposures that threaten personnel safety, property loss, and continuity of operations. For an in-depth analysis of wildfire exposures and risk management, download the California JPIA’s Wildfire White Paper from the Authority’s website.

The following are important steps that can be taken to enhance employee safety and minimize property losses from wildfires and related emergencies.

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Manage Property Fire Risks and Defensible Space:

California law requires property owners to maintain up to 100 feet around a building as a defensible space buffer. Defensible space includes three zones that span from zero to 100 feet from a structure where critical steps should be taken to reduce landscape fuels and increase ember-resistance. Managing plant and hardscape materials in these zones through a site-specific property and vegetation maintenance plan is critical. Use the following steps to help in this process:

• Keep plants watered, trimmed, and pruned to avoid the accumulation of dried leaves and foliage that may act as a fuel source.
• Remove dead and dying weeds, grasses, plants, shrubs, trees, and other vegetative debris.
• Maintain trees and ensure that shrubs are in well-spaced groups. Tree crowns should be at least 10 feet apart. Remove all dead materials and prune tree limbs and branches up to 6 feet in the air.
• Choose hardscape like gravel, pavers, concrete, and other noncombustible mulch materials.
• Properly label and store flammable liquids, hazardous wastes, and other combustible materials away from the defensible space buffer or inside the facility.
• Regulate and carefully monitor the use of heat producing equipment, such as gas-powered weed eaters, in high-risk areas and during high-risk times of the day. These activities should be completed early in the morning and only when preventative measures can be taken in the event of a flare-up.

Protect Heating and Ventilation Systems:

Many wildfire-related property losses have involved heating and ventilation system contamination. The following steps can help reduce a wildfire’s impact on these systems:

• Install metal screens of 1/8” or finer across vents to block windblown embers from entering.
• Attempt to close attics, crawl spaces, and ventilation ducts in the event of a nearby wildfire to reduce the possibility of fire and smoke travelling throughout the building.
• Conduct regular inspections to ensure they are not damaged or compromised.

Develop a Wildfire Emergency Plan:

Develop a wildfire emergency plan for your agency to follow in an actual event. Start by discussing wildfire mitigation strategies with local fire authorities, focusing on key variables that impact your agency’s specific exposure. Various resources exist to assist in developing a Wildfire Emergency Plan and are in the resources section below. Specific elements that should be covered in the plan include:

• Conditions that will activate the plan
• Chain of command
• Emergency functions and who will perform them
• Evacuation procedures for agency-occupied facilities
• Community Evacuation routes
• Provisions for inspecting agency-owned facilities and infrastructure for vulnerabilities
• Provisions for managing property risks, such as maintaining defensible space and hardening infrastructure

Additional Resources:

California JPIA’s Wildfire Risk Management White Paper: In-depth analysis of wildfire-related risks

Cal/OSHA’s Regulation for Protecting Workers from Wildfire Smoke: CCR Title 8, Section 5141.1

California Office of Emergency Services Wildfire Recovery Resources: State-wide wildfire resources

Cal Fire’s Defensible Space Guidelines: Detailed information on managing your defensible space

Ready for Wildfire: Cal Fire’s wildfire resource website

Occupational Safety and Health (OSHA): Wildfire emergency planning resources

Cal/Fire’s Active Incident Archive: Up-to-date information on all statewide active incidents

If you have questions or need additional information, please visit the California JPIA’s website or contact your regional Risk Manager.

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Preparing for Summer

As federal, state, and local public health authorities begin to relax restrictions related to the COVID-19 pandemic, now is an opportune time to begin thinking about managing risk associated with increased use of public facilities such as parks, playgrounds, and swimming pools.

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Parks & Playgrounds
Creating a safe environment for children while they enjoy the parks and playgrounds in our communities is of paramount importance. This is a great time of the year to review your agency’s written Parks and Playground Inspection and Maintenance Program, ensure that regular, documented inspections are occurring, and take any necessary corrective action. A Parks and Playground Inspection and Maintenance Program template can be found in the Resources section of the California JPIA’s website.

If playgrounds owned or maintained by your agency have not received an audit from a Certified Playground Safety Inspector (CPSI), this should be made a priority to ensure your playgrounds meet nationally recognized standards. You can locate a CPSI in your area through the National Recreation and Park Association (NRPA) website.

Aquatics
Injuries that occur at member-owned swimming pools and aquatic centers have the potential to be both traumatic and costly. This exposure can be managed in a number of ways:

• Ensure lifeguards are trained to follow specific operational and emergency procedures and possess current lifeguard and first aid/CPR certifications. In addition, regular in-service trainings provide lifeguards with simulated experiences of potential real-world incidents (victim retrieval, unruly patron intervention, etc.)
• Regularly inspect the pool, locker rooms, showers, and other areas of the facility to identify and correct any hazards such as broken glass, bodily fluids, inappropriate behavior, etc.
• Ensure that rescue equipment such as backboards, rescue tubes, and throw ropes are readily accessible and that staff has been trained in the effective use of these devices.

First Aid/CPR
Larger crowds coupled with an increase in temperatures during summer months makes it more likely that agency staff will have to respond to an ill or injured member of the public. The odds of a favorable outcome can be improved by ensuring that key staff are formally trained in first aid, CPR, and AED use. The California JPIA offers American Heart Association (AHA) first aid, CPR, and AED training to members at no additional cost. The AHA requires re-training every two years, so if it’s been a while since your employees received this training, it would be a good idea to review your records and determine if certifications have expired.

Special Events Program
Summertime also brings with it an increase in the number of special events hosted by public agencies. Event organizers or members of the public wishing to use member-owned facilities may have difficulty obtaining minimum liability insurance limits recommended by the California JPIA (typically $1 million per occurrence). This is where our Special Events Program can help. The program provides liability insurance when member-owned premises are used for special events or short-term activities. Examples include weddings, art festivals, parades, yoga classes, and member-sponsored events such as fairs, carnivals, and swap-meets. There is no deductible for this coverage, and members are automatically added as an additional insured. For more information, visit the Special Events page of the California JPIA’s website.

If you have questions or would like more information, please contact your regional Risk Manager.

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Legislative Update

By Abraham Han, Management Analyst

This edition of the legislative update tracks a handful of bills which have workers’ compensation implications, as well as a few others that may impact law enforcement agencies. It is always important to note that bills may go through significant revisions in the coming months, and members are encouraged to use the information below as a snapshot of each bill’s trajectory at the time of publication.

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AB 89 (Jones-Sawyer). Peace officers: minimum qualifications.

Position: Support

Summary: Existing law requires peace officers in the state to meet specific minimum standards, including age and education requirements. This bill would increase the minimum qualifying age from 18 to 25 years of age. This bill would allow an individual under 25 years of age to qualify for employment as a peace officer if the individual has a bachelor’s or advanced degree from an accredited college or university. The bill would specify that these requirements do not apply to individuals 18 to 24 years of age who are already employed as a peace officer as of the effective date of this act. The bill would provide legislative findings in support of the measure.

AB 415 (Rivas, Robert). Employment: workers’ compensation.

Position: Oppose

Summary: This bill would expand existing cancer presumptions for frontline firefighters to also cover employees for local public agencies that, while not directly engaged in firefighting activities, are exposed to health hazards from firefighting operations. This bill has no objective basis to support the proposed expansion, and the bill’s text is vague such that it could be broadly applied to municipal employees.

AB 603 (McCarty). Law enforcement settlements and judgments: reporting.

Position: Oppose

Summary: Existing law requires each law enforcement agency to annually furnish specified information to the Department of Justice regarding the use of force by a peace officer. This bill would require municipalities to annually post on their internet websites specified information relating to settlements and judgments resulting from allegations of improper police conduct, including, among other information, amounts paid, broken down by individual settlement and judgment, information on bonds used to finance use of force settlement and judgment payments, and premiums paid for insurance against settlements or judgments resulting from allegations of improper police conduct. This bill contains other related provisions.

AB 654 (Reyes). COVID-19 exposure: notification.

Position: Oppose

Summary: This bill does not address two shortcomings, as currently written – 1) outbreaks can occur outside of the place of employment, and 2) there is no requirement that the list of outbreak locations is constantly updated or that it includes only active outbreaks. The bill would potentially punish employers for conduct they cannot control, especially if the outbreak occurred outside of the place of employment.

SB 16 (Skinner). Peace officers: release of records.

Position: Oppose

Summary: As currently written, this bill would provide for the disclosure of police personnel records for every incident involving use of force, regardless of whether the officer was exonerated or if a complaint was not sustained. The release of officer records for every single incident involving any use of force, especially those in which the officer is entirely within departmental policy, could potentially generate the hasty conclusion and misperception that there was something wrong with the officer’s conduct. Furthermore, the bill’s requirement of retaining all complaints could cause a financial strain from potentially having to account for additional data storage space and/or staffing to sort through the complaints.

SB 284 (Stern). Workers’ compensation: firefighters and peace officers: post-traumatic stress.

Position: Oppose

Summary: This bill would substantially expand California’s current presumption for post-traumatic stress disorder (PTSD) for police officers and firefighters, to thousands of additional safety officers and non-sworn personnel. This expansion does not objectively address whether or not such claims are work-related. Further analysis would likely be needed to determine whether the expansion would be appropriate, but it is premature to make the conclusion about the expansion without such an analysis.

SB 335 (Cortese). Workers’ compensation: liability.

Position: Oppose

Summary: This bill would reduce the period of time that employers are allowed to investigate a workers’ compensation claim for benefits prior to making a coverage decision. For most claims, the investigation period is reduced from 90 to 45 days. For claims covered by legal presumptions, the investigation period is reduced even further to 30 days. The bill proposes other provisions, all of which may undermine the ability of employers to demonstrate that a proposed claim for injury did not occur at the workplace.

SB 788 (Bradford). Workers’ compensation: risk factors.

Position: Support, if amended

Summary: Current law establishes a workers’ compensation system, administered by the administrative director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of employment. Current law requires a physician who prepares a report addressing the issue of permanent disability due to an industrial injury to address the cause of the permanent disability in the report, including what approximate percentage of the permanent disability was caused by other factors before and after the industrial injury, if the physician is able to make an apportionment determination. This bill would prohibit consideration of race, religious creed, color, national origin, age, gender, marital status, sex, sexual identity, sexual orientation, or genetic characteristics to determine the approximate percentage of the permanent disability caused by other factors.

The Authority will continue to monitor these bills, as well as others, in an ever-changing legislative landscape.

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Recent Decision Leads to Split of Authority on Peace Officer Investigation Rights

By J. Scott Tiedemann and Alex Wong, Liebert Cassidy Whitmore

Originally published on April 27, 2021. Reprinted with permission from Liebert Cassidy Whitmore.

On April 26, 2021, the First District Court of Appeal published its decision in Oakland Police Officers Association v. City of Oakland (2021) — Cal.App.5th — (“Oakland POA”). The case provides critical guidance regarding what information a law enforcement agency must provide to a peace officer before conducting a second or subsequent interrogation of the officer in an administrative investigation under the Public Safety Officers Procedural Bill of Rights Act (“POBRA”). Liebert Cassidy Whitmore attorneys J. Scott Tiedemann and Alex Wong submitted an amicus brief for the League of California Cities and the Los Angeles County Police Chiefs Association on behalf of the City of Oakland, which prevailed in the case.

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Government Code section 3303, subsection (g) provides:

The complete interrogation of a public safety officer may be recorded. If a tape recording is made of the interrogation, the public safety officer shall have access to the tape if any further proceedings are contemplated or prior to any further interrogation at a subsequent time. The public safety officer shall be entitled to a transcribed copy of any notes made by a stenographer or to any reports or complaints made by investigators or other persons, except those which are deemed by the investigating agency to be confidential. No notes or reports that are deemed to be confidential may be entered in the officer’s personnel file. The public safety officer being interrogated shall have the right to bring his or her own recording device and record any and all aspects of the interrogation.

Previously, in Santa Ana Police Officers Association v. City of Santa Ana (2017) 13 Cal.App.5th 317 (“Santa Ana POA”) the Fourth District Court of Appeal held that under Section 3303, subdivision (g), officers under investigation were not only entitled to access a recording of their own interrogation prior to a subsequent interrogation but were also entitled to stenographer notes, reports and complaints. Prior to the Santa Ana POA decision, based on the California Supreme Court’s decision in Pasadena Police Officers Association v. City of Pasadena (1990) 51 Cal.3d 564 (“Pasadena POA”), most agencies had understood that officers were only entitled to access a recording of their prior interrogation before a subsequent interrogation. The Santa Ana POA holding created significant administrative and substantive concerns for effectively investigating peace officer misconduct. For example, if a police chief reviewed an investigation report and ordered investigators to conduct a follow-up interrogation of the officer, then the Santa Ana POA case suggested that investigators would have to provide the officer under investigation with a copy of the report, including statements by witnesses and investigator conclusions, prior to conducting the subsequent investigation. Agencies were reasonably concerned that, among other things, providing such extensive discovery before an interrogation may influence an officer’s recollection and undermine the integrity of an investigation.

In Oakland Police Officers Association v. City of Oakland, the First District Court of Appeal expressly disagreed with the Santa Ana POA Court’s interpretation of Government Code section 3303. Reminiscent of the Supreme Court’s decision in Pasadena POA, the First District determined that mandating complaints and reports be disclosed prior to a subsequent interrogation is, “inconsistent with the plain language of the statute and undermines a core objective under POBRA—maintaining the public’s confidence in the effectiveness and integrity of law enforcement agencies by ensuring that internal investigations into officer misconduct are conducted promptly, thoroughly, and fairly.”

In Oakland POA, the Oakland Police Department had conducted an internal affairs investigation into several officers’ handling of a mental health welfare check that resulted in a citizen complaint alleging unlawful search and seizure, excessive force, harassment, discrimination and property damage. Following the investigation, which involved separate interrogations of each of the involved officers, the Department cleared the officers of wrongdoing. Subsequently, the Oakland Community Police Review Agency (“CPRA”), a civilian oversight agency with independent authority to investigate claims of police misconduct, conducted its own investigation. Prior to the CPRA’s interrogation of the officers, counsel for the officers demanded copies of all “reports and complaints” pursuant to Government Code section 3303, subdivision (g). The CPRA denied the request and refused to disclose the materials. The CPRA thereafter determined that officers knowingly violated the complainant’s civil rights and then actively concealed the violation from investigators.

The officers and their union filed a petition for writ of mandate alleging the City violated their rights under Government Code section 3303, subdivision (g), by refusing to disclose reports and complaints prior to the officers’ supplemental interrogations. The trial court, constrained by the Santa Ana POA decision, granted the petition and precluded the use of the officers’ interrogation testimony for disciplinary purposes. The City appealed.

In reversing the trial court’s decision and finding no mandatory obligation to disclose reports and complaints prior to a second interrogation of an officer, the Court of Appeal looked at both the statutory construction as well as the legislative history of the Government Code section 3303, subdivision (g). First, the Oakland POA Court noted that under the plain language of the statute, the only investigation materials an officer was entitled to “prior to” any further interrogation was a “tape recording” of the earlier interrogation. As the Legislature did not use similar language for reports or complaints, the Court concluded the Legislature did not intend to establish a post-interrogation deadline for disclosing those materials. Rather than adopt the City’s position that materials need only be disclosed at the commencement of disciplinary proceedings, the Court instead concluded that an agency has the statutory right to withhold materials it deems confidential. The Court further held that an agency may deem materials confidential if it finds doing so satisfies Evidence Code section 1040-1041, “or if disclosure would otherwise interfere with an ongoing investigation.” Importantly, the Court also held that nothing in Government Code section 3303 prohibits an agency from “de-designating” records previously deemed confidential when the basis for confidentiality no longer exists, such as the completion of the investigation.

The Oakland POA Court held that if punitive action is contemplated at the conclusion of an investigation, the agency will need to determine whether to de-designate the materials and disclose them, or decline to bring charges on the basis of any materials that are withheld. The Court also harmonized its interpretation of Government Code section 3303, subdivision (g), with an officer’s right to review and comment on adverse entries in personnel files pursuant to Government Code sections 3305 and 3306, by holding that those rights do not extend to review of materials temporarily deemed confidential under section 3303 for purposes of an active investigation. However, those rights would still attach at the conclusion of an investigation.

The Court also considered the legislative history of Government Code section 3303 and noted that the bill as originally introduced did not provide any basis for agencies to protect the integrity of investigations by withholding sensitive information. However, the Court noted that by granting agencies the authority to withhold confidential materials, the Legislature intended to strike a balance between a police officer’s entitlement to relevant discovery and the agency’s ability to supervise employees effectively and to safeguard the integrity of internal investigations. Accordingly, the Court noted the timing of disclosure of notes, complaints and reports is guided by an investigating agency’s exercise of its discretion to designate materials confidential in furtherance of its investigative objectives and to release nonconfidential materials upon request of the officer under investigation.

Under the Oakland POA decision, agencies have the discretion to temporarily designate reports and complaints and other investigative materials confidential in order to protect the integrity of an ongoing administrative investigation, and then de-designate those materials at the conclusion of the investigation so that they may be used for disciplinary or other personnel purposes. Agencies within the Fourth District still have to contend with the Santa Ana POA decision, but may have some more confidence in defending a decision to withhold information prior to conducting a subsequent interrogation.

This decision establishes a clear split in authority between California’s First and Fourth Appellate Districts, potentially making the issue ripe for the California Supreme Court to weigh in. Unless and until it does, agencies throughout California still have to contend with the Santa Ana POA decision. In the event of litigation, agencies will need to persuade trial courts why they should rely upon the Oakland POA case rather than the Santa Ana POA decision, but agencies may have some more confidence in defending a decision to withhold information prior to conducting a subsequent interrogation.

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