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Council votes to rely on VLCT crime insurance instead of purchasing individual official bonds
Summary
After legal counsel explained city charter and state statute provisions, the Newport City Council agreed March 9 that the VLCT crime insurance policy provides coverage equivalent to traditional bonds and voted to stop buying separate bonding for officials as policies come due.
The Newport City Council voted March 9 to rely on the Vermont League of Cities and Towns (VLCT) crime insurance program as an alternative to purchasing individual official bonds for elected officials and key staff.
Legal counsel David Rue summarized the legal view: the city charter requires that certain officials be bonded, but state statute allows the governing body to require bonds or to have crime insurance instead. Rue said the VLCT policy “is equivalent to the same as the chartered bonding requirement and in fact provides even more coverage,” adding that the insurance has broader limits than prior individual bonds the city purchased.
Council discussed coverage scope, including whether the policy covers employees and officials and whether it covers negligent acts versus criminal acts. Rue and staff explained that crime insurance typically requires proof of a criminal act to trigger a claim but that separate liability policies cover negligence. The council clarified that VLCT coverage already covers officials and employees who handle municipal funds and that naming each individual is not necessary for coverage.
Members then moved and adopted a motion to forego purchasing additional bond coverage as existing policies come up for renewal, relying instead on the VLCT crime insurance program going forward.
The motion passed on a voice vote with no recorded roll-call tally in the transcript.
