Brian Kemp seeks $175 million to cover soaring liability costs in Georgia

Kemp’s budget request comes as he presses lawmakers to pass legislation reining in civil litigation costs for the private sector, which he says contributes to higher insurance premiums for businesses and consumers. Though damage claims against the state are limited by law, the legislation could also help curtail some claims against state employees and agencies.

“Whether it’s at the grocery store or in a courtroom, there is no denying that it’s hardworking Georgians who pay the price for an out of balance legal environment.” said Kemp spokesman, Garrison Douglas.

Georgia uses a mix of self-insurance and commercial carriers to provide liability insurance for some 130,000 employees and 325 state agencies. An organization that large faces significant costs for property damage, bodily injury and other liability claims.

The AJC reviewed nearly 13,500 liability claims filed with the state from 2020-24. The vast majority of closed claims resulted in no payments to the claimants, and a third of closed claims cost the state less than $10,000 in legal bills, compensation to the claimant and other costs.

The review found thousands of mundane claims, such as $117.50 paid for damage to an automobile caused by a pothole in the GDOT Cartersville division.

But some were far more serious. The AJC found 17 closed claims that cost the state more than $1 million. Among them:

Rebecca Sullivan, commissioner of the Department of Administrative Services, told legislators at a recent budget hearing that liability costs have been escalating across the country. She said inflation and an increase in more complex litigation have contributed to rising costs.

Sullivan said the state is examining ways to reduce its exposure. One example: Kemp has proposed spending more than $600 million to boost safety and security at Georgia prisons. She said that would address liability caused by staffing shortages, delayed maintenance and other problems.

In the meantime, Sullivan told the lawmakers that more money is needed to shore up Georgia’s liability insurance fund. Without more money, the fund balance is expected to drop to $66 million this year — just 17% of outstanding liability, Sullivan said.

Sullivan told lawmakers that Kemp’s funding proposal is “crucial to strengthen the program’s financial foundation.”

State Rep. Marcus Wiedower, R-Watkinsville, told Sullivan he’s glad her department is looking for long-term solutions to long-term liability costs.

“I want to treat the problem, not the symptom,” Wiedower said. “If we’re not making efforts to mitigate that, then what are we spending the money for?”

AJC data specialist Jennifer Peebles contributed to this report