On July 7 2011 the Emilia Romagna Division of the State Auditor's Office issued the latest ruling on the issue of insurance policies entered into by public entities to cover the administrative liability of public officials. The State Auditor's Office has previously issued various decisions on the ineligibility of public entities to insure against the administrative liability of public officials.
Article 3(59) of Law 244/2007 states that insurance contracts whereby "public entities cover the administrative liability of public officials" are null and void.
In the case in question certain public officials were found liable for having caused the public entity for which they worked to enter into a policy that covered their personal administrative liability, the entity having borne the relevant costs.
In line with decisions issued before the entry into force of Law 244/2007, the State Auditor's Office has confirmed that:
"insurance policies that cover the liability of public officials for damages caused to public entities, the costs of which are borne by the same public entities, involve an unlawful shifting of the risk arising from the performance of public functions from the individual to the public entity, with a serious prejudice to the system of administrative liability - including, but not limited to, the exemption of liability of public officials and the frustration of actions by the State Auditor's Office."
For further information on this topic please contact David Maria Marino at DLA Piper Italy by telephone (+39 02 80 61 81), fax (+39 02 80 61 82 01) or email ([email protected]).