By Phil Zinkewicz
Sheila Warner is president of Millennium Insurance Group
in Thomasville, North Carolina.

   "There are employment-related exposures, zoning issues and law enforcement risks ... failure to provide water and proper sewage ... all kinds of exposures that relate to municipalities that are not part of general commercial risks."   --Sheila Warner

There's an old saying, not repeated very much these days, that goes: "You can't fight City Hall." The expression dates back to a time, not all that long ago, when government entities and their employees were virtually immune from civil actions by the citizenry. It was generally held that, because municipalities and their employees were operating in behalf of the common good and not for profit, they should not be held as accountable as the outside business community when an error was made or an injury incurred. Of course, these government immunity laws varied on a state-by-state basis, but nevertheless they existed pretty much countrywide, and were the rule rather than the exception.

The reason that old saying is not heard very often these days is that cultural changes and alterations in public attitude have brought about a situation in which one can very well "fight City Hall." In fact, in today's current litigious environment, municipalities are just as open to possible lawsuits on various fronts as the general business community, if not more so because they are in the public eye.

"Government immunity laws have pretty much faded into the background in most states," says Bob Adams, executive vice president and managing ownership partner of Millennium Insurance Group based in Thomasville, North Carolina. This managing general agency specializes in providing various insurance products and services for municipalities based in the Southeast. "In most states, government immunity laws have been voided and, in those few states that do retain such laws, they are inadequate to address today's exposures. People are suing today for things they didn't sue for years ago. So insurance and loss control management are definitely needed," he says.

And, that is exactly the "niche" that the Millennium Group has carved out for itself. Under the leadership of Sheila Warner, president, the managing general agency provides property and casualty insurance products for cities, towns and counties. In addition, Millennium provides insurance products and services for special districts, such as water and sewer districts and fire districts. Other products offered include professional liability insurance for public officials and their employees and law enforcement people. The firm also provides workers compensation for cities, towns and counties, schools, colleges and universities. "We cover anything budgeted under a government entity," says Warner.

The MGA currently does most of its business in North Carolina, South Carolina, Georgia and Alabama; and Warner maintains that part of the firm's strength is the knowledge its principals have of the southeast portion of the United States.

Warner came to the government entity insurance niche by accident. A native of Thomasville, she was working with the Thomasville Chamber of Commerce in the early 1980s in various capacities, including manager of Chamber development and coordinator of economic development. One of the Chamber's board members had an insurance agency, the J. Wilson Hunt Insurance Agency, which offered a special professional liability program for certified public accountants and real estate professionals. Because of Warner's experience with the Chamber of Commerce, the board member asked her to join the firm and manage the program. She did and, a year later, moved on to American Insurance Consultants in High Point, North Carolina, where she handled 500 government entities, was acting claims supervisor for the professional liability department and participated in various other aspects of the agency. From 1991 until 1997, Warner and Adams worked for K&K Specialties in Greensboro, North Carolina, and it was at that point that she and Adams decided to strike out on their own.

"We literally packed up all our records and, in one day, we were on our way to Thomasville. For me, it was a return home because I grew up in Thomasville. We set up a small office and set to work." And, so far, the work has paid off. With only seven people, including Warner and Adams, the agency has grown to $10 million in property and casualty and professional liability premiums; and that doesn't count the workers compensation portion of their business, they say.

Initially, Millennium served as an MGA for Gulf Insurance Company and did business only in North Carolina, but Gulf then asked Warner and Adams to expand to other states and so they branched out further into the Southeast. Gulf then formed an alliance with Kemper Group to form Kempes, the risk bearing market for the business produced by Millennium. There was a runoff period, but by March of 2000, Millennium began writing all its business on Kemper paper. In June of 2002 Millennium began writing all of it's property & casualty business on Argonaut Great Central paper & today was an excellent relationship with the company & it's municipal services company, Trident Insurance Services.

We currently have about 300 agents throughout the Southeast," says Warner. "We have our preferred agents, of course, but we remain an open market. New agents who have municipal risks can call on us and we're happy to provide our expertise and the necessary coverages."

The Millennium staff gathers in front of the Thomasville, North Carolina, City Hall.
The city of Thomasville is one of Millennium's insureds.

Warner allows that some agents shy away from municipal risks because the area is so specialized and the market can be a volatile one. "There are employment related-exposures, zoning issues and law enforcement risks such as false arrest, hot pursuit and failure to provide medical assistance while being detained," she says. "There is the danger of failure to provide water and proper sewage. There are dump trucks, fire trucks and police cars that need to be insured. There are all kinds of exposures that relate to municipalities that are not part of general commercial risks."

Nevertheless, Warner maintains that new agents need not be reluctant to approach Millennium if they believe they have an exposure that fits its program. Millennium is willing to provide the insurance expertise needed, the market and has also contracted with an outside risk management firm to provide loss control expertise to the novice agent, she says.

"We're fortunate in that we have done municipality program business in this same geographic area for many years," says Adams. "Agencies such as ours that specialize in this area really have a lock on the market. There are very few general agencies that feel they have the right connections to get things done, and so naturally they are a bit reluctant to try to penetrate the municipal liability market. But when they come to us, they can be assured that we have the expertise to cover the right ground as quickly as possible."

"In fact," adds Warner, "one thing that our agents and customers tell us all the time is that, while we may not always provide the cheapest price, we have the best service. And that's because our staff is well-trained and well-qualified to handle all the areas of operation."

What's the current market like in the area of municipal liability? Well, as with other specialty insurance lines, the market has fluctuated over the years. In the mid-'80s, especially when National Home, the then largest writer of the coverage, pulled out, the market was in turmoil, according to Warner. Then the market turned and became competitive. Warner says that, after a long period of a soft market, it is finally showing some signs of firming up once again. "I like to think of the insurance industry in terms of refrigerated butter. When you take it out and leave it on the table, it softens. If you leave it long enough, it could become liquid. I think we've come to a point where somebody has put the butter back in the refrigerator." *