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Tuesday, August 14, 2007
Ind. Law - Under purchasing laws, is insurance a professional service or a product?
An interesting story today in the Louisville Courier Journal, reported by Ben Zion Hershberg, begins:
Jeffersonville Mayor Rob Waiz has refiled a lawsuit against the City Council and Clerk-Treasurer Peggy Wilder challenging their authority to choose a property- and casualty-insurance provider for the city.The lawsuit, filed Friday in Clark County Circuit Court, was prompted by the council's approval last week of a $356,175 payment to the Burnham and Flower Insurance Group for a contract that had been authorized by Wilder, the lawsuit said.
It also said Waiz and the city's Board of Public Works had already accepted a contract for insurance coverage costing $40,000 less from a different company.
Waiz originally filed suit in December challenging a council ordinance that gave Wilder the purchasing authority. He later withdrew the suit after the council amended the ordinance to exclude professional-service contracts from the clerk-treasurer's authority.
At least part of the dispute in the suit is over the definition of "professional services."
"I've talked to three insurance agents," said Councilman John Perkins, chairman of the city's insurance committee. "They said it's a product" and not a professional service, he said.
Council President Keith Fetz, an insurance agent, agreed that property and casualty insurance "is a product" that falls under the clerk-treasurer's purchasing authority.
It's different from health insurance, in which a company might provide professional services such as an administrator who decides which claims are valid, Fetz said.
Posted by Marcia Oddi on August 14, 2007 08:34 AM
Posted to Indiana Law