Insurance is a concept interwoven with the letter and spirit of self-determination - a value system Indian people have been invoking and fighting for decades, if not centuries.

Contrary to popular opinion, self-determination (or self-governance) was not the brainchild of President Richard Nixon in 1970. According to University of Colorado Law School professor Charles Wilkinson, Indian people spoke of ;'self-determination'' as far back as 1919, when in reaction to the federal reservation policy, a Crow leader decried such laws that did not allow tribal people ''to think free, act free, expand free, and to decide free.''

With the seeds of self-governance now in full bloom, liability and insurance issues pervade self-determination law and policy. In 1988, Congress passed a law making the executive branch ''responsible for obtaining liability insurance'' for self-governance tribes. The United States never kept that promise. So, in 1990, self-governance tribes were afforded protection under the Federal Tort Claims Act, and in 1994 they were authorized to use 638 contract funds for insurance buying.

(We recognize what some might view as inconsistency between self-governing and receiving federal liability and insurance assistance. As a means of self-reliance, tribes can exert their inherent sovereignty and self-insure themselves, rather than paying costly private insurance - or state workers' compensation - premiums and ceding control of personal injury claims to others. And self-insured tribes can borrow or leverage reserve amounts to further diversify their economies and, in turn, lessen the need for federal assistance. But issues of tribal self-insurance need be left for another day.)

Today, self-governance tribes must be wary of insurers who look to self-determination rights for economic cover.

Supplementing, not supplanting, Federal Tort Claims Act coverage

The federal government supplies self-governance funding to more than 200 tribes, allowing them to conduct programs the United States would otherwise provide in fulfillment of its trust responsibility. A 1990 federal law provides tribal contractors and/or their employees full protection under the FTCA for claims resulting from negligent or wrongful, perhaps even intentional, acts or omissions arising from self-governance contractual functions. In that instance, a claimant's remedy against the tribal defendants, vis-a-vis the federal government, is ''exclusive of any other civil action or proceeding for money damages,'' including any tort lawsuit against tribal governments/employees covered by the FTCA.

Federal courts have affirmed the applicability of the FTCA to tortious acts arising out of, for example, health care clinics and human service programs, schools and early learning centers, law enforcement and general contractor construction work. Essentially, the FTCA provides self-governance tribes primary tort liability coverage for a host of everyday personal injury claims. Importantly, the U.S. Department of Justice must defend personal injury claims or lawsuits against self-governance tribal contractors and/or employees that fall within the ambit of the FTCA. Most self-determination contracts make that clear, as the federal defense duty is critical to protecting the tribal treasury.

An insurance policy for a self-governance tribe - and its premium amounts - should expressly reflect the federal protection afforded the tribe pursuant to the FTCA, and the relationship between the tribe's insurance coverage and FTCA protection. Moreover, the policy should make clear that the insurer shall not tender an FTCA-covered claim or suit to the federal government without written tribal authorization (just as an insurer cannot waive tribal immunity without express tribal consent). Only a tribe should be allowed to invoke its trust relationship by requesting federal tort defense.

And if for public policy reasons the self-governance tribe opts against tendering the federal defense - much like deciding against asserting tribal immunity - the insurance contract should reflect the insurer's continued duty to defend the matter. Another policy provision advanced by tribal insurance underwriters provides:

''It is the intent of this policy that any claim or 'suit' covered ... under the [FTCA] as it applies to Self-Determination Contractors under Pub. L. 101-512 shall be deemed to be other insurance ... excess over such claims or 'suits.' It is further the intent of this policy that when this insurance is excess over such claims or 'suits,' we will not have the duty ... to defend any claim or suit for which the insured is entitled to defense by the U.S. Department of Justice under the provisions of the [FTCA].''

In the insurers' eyes, such language alleviates their duty to defend self-governance tribal insureds when ''they are entitled to defense'' by DOJ. Put another way, insurers might not believe they need defend any self-governance tribal defendants when a tribe, for public policy reasons, decides against tendering an FTCA-covered claim to the federal government for defense.

Even worse, insurers might read that language to suggest that if DOJ does not defend a self-determination contractor/employee even though they are entitled to federal defense, the carriers need not defend them, either. With the current federal administration increasingly reluctant to honor the United States' legal, contractual and trust obligations to defend self-governance tribes under the FTCA, such tribes must impose even clearer defense obligations on their insurers. Accordingly, a self-governance tribe's insurance policy must make clear that the insurer has a duty to defend a claim or lawsuit against the tribal insured unless and until ''they are provided defense'' - i.e., until DOJ formally agrees to defend the matter under the provisions of the FTCA.

In conclusion, it is nothing short of a bad-faith insurance practice to defend Indian sovereignty on the cheap, or abuse inherent tribal rights for economic gain. Has your tribal insurer committed bad faith? Are you in bad hands?



Tribal Insurance Procurement Checklist

Indian country must take a renewed approach to insurance procurement. Tribes and Alaska Native Corporations can no longer afford to treat their insurance polices as form, non-negotiable contracts. Rather, tribal business leaders and staff lawyers must approach and negotiate those two-inch insurance policies as they would a significant real estate acquisition or commercial loan transaction. This checklist is designed to help Indian decision-makers work with their brokers, who should be zealous advocates for Indian country, to ensure that tribal insurance contracts not only maximize the protection of Indian assets, but do not inadvertently waive tribal sovereignty, jurisdiction or immunity.

Tribal Choice of Counsel. Tribal business leaders must insist that the tribe ''shall have the sole right to assign counsel to defend any suit against the insured.'' Like Corporate America, which demands of its insurers the right to select outside defense counsel, Indian Country must enjoy that same prerogative to assign Indian lawyers they trust. If the insurer balks at such language, the tribe and insurer could agree that they will jointly select counsel, which would have the practical effect of giving the tribal insured veto power over any carrier's choice of discount, non-tribal defense lawyer.

Policy Doesn't Waive Immunity from Tort Claims. If a tribe does not wish to affect a blanket immunity waiver by purchasing insurance, as is the case for most tribes, their policy should provide that nothing therein should be read to waive immunity or confer jurisdiction to any court.

Tribal Authority to Waive Immunity. An insurer is not, as a matter of law, authorized to waive or otherwise limit a tribal insured's sovereign immunity. All tribal policies must make clear that in the event of a claim or suit against the tribe or tribal officers or employees, the insurer shall not assert or waive tribal immunity absent written authorization from the tribe.

Tribally Appropriate Dispute Resolution. Standard arbitration endorsements arguably: (1) divest Indian courts from jurisdiction to entertain a reservation-based insurance coverage disputes; (2) relinquish the application of tribal law; and (3) waive the tribal insured's sovereign immunity from any suit or countersuit the insurer may advance. The tribe must decide whether any coverage dispute with its insurer should be brought before an arbitration tribunal and/or a tribal or state court, and whether it wishes to risk waiving immunity relative to any such dispute through an arbitration endorsement.

Self-Governance Tribal Authority for FTCA Tender. A 1990 amendment to the federal self-determination act provides tribes and/or tribal employees full protection under the Federal Tort Claims Act (FTCA) for tort claims arising from self-governance contractual functions. A self-governance tribe's policy should reflect the interplay between their insurance coverage and FTCA protection. The policy should also explain that the insurer shall not tender an FTCA-covered claim/suit to the federal government without tribal authorization. If for public policy reasons the tribe opts against doing so, the policy should reflect the insurer's continued duty to defend the matter.

Duty to Defend FTCA Claim Unless/Until U.S. Does. If a self-governance tribe opts to tender an FTCA-covered personal injury claim/suit against the tribe and/or tribal employees, the Department of Justice must defend the matter. The tribe's insurance policy must make clear that the insurer has a duty to defend a claim or lawsuit against the tribal insured until such time as the Justice Department formally agrees to defend the matter pursuant to the FTCA.



Gabriel Galanda and Debora Juarez are attorneys with Williams, Kastner and Gibbs PLLC's tribal practice group in Seattle. Galanda is a descendant of the Nomlaki and Concow tribes and enrolled with the Round Valley Indian Confederation. Juarez is an enrolled member of the Blackfeet Nation.