2.32.360 Indemnification.
A. Except as otherwise precluded by law, all obligations by the Borough to indemnify, hold harmless or defend an employee in an individual capacity are subject to the conditions and limitations set forth in this section. If an indemnified employee or former employee does not comply with this section, the Borough may elect not to defend, not to indemnify or not to defend or indemnify.
B. The Borough shall defend, indemnify and hold harmless an employee or former employee against a claim filed in a civil or administrative action and resulting from any conduct, act or omission of such employee within the scope of Borough employment.
C. No obligation to indemnify, hold harmless or defend shall apply to the contest of a traffic citation or any claim against an employee:
1. Based on the gross negligence, willful, malicious, dishonest, fraudulent or criminal conduct of the employee;
2. Based on conduct that was not undertaken in the reasonable belief that the act or omission was in the best interest of the Borough;
3. Brought by or on behalf of the Borough;
4. For any fine resulting from a traffic citation; or
5. For punitive or exemplary damages.
D. No obligation to indemnify, hold harmless or defend shall apply to any claim against an employee arising as the result of the employee’s decision to intervene in any action or an employee filing a claim against the Borough.
E. The Borough’s obligations imposed in this section shall be available only after application of any other available insurance. No obligation to indemnify, hold harmless or defend by the Borough shall apply to the extent that the employee is indemnified or defended pursuant to an agreement between the Borough and a third party or under a policy of insurance provided by or on behalf of the Borough.
F. The Borough may purchase insurance to cover its obligations to defend, indemnify, and hold harmless. Nothing in this section or in any other indemnity/defense agreement shall limit the coverage of any policy of insurance or agreement between the Borough and a third party that would otherwise provide for the indemnification or defense of an employee. Nothing in this section or any other indemnity/defense agreement shall be construed as waiving the defense of governmental immunity otherwise available to the Borough or its employees.
G. Whether or not the Borough is obligated to indemnify, hold harmless or defend shall be determined by the Risk Manager. The Risk Manager may assume the defense under a reservation of rights. The Borough’s decision to indemnify, hold harmless, or defend a claim does not require the Borough to continue to indemnify, hold harmless or defend the claim, nor does it require that the Borough indemnify or hold harmless an employee against any resulting judgment, fine or amount paid in settlement. No assumption by the Borough of the indemnification or defense of a claim shall be construed as a waiver by the Borough of any right, condition or limitation of this section nor shall it preclude the Borough from taking any disciplinary or other employment action against the employee.
H. The Borough shall have no duty to defend, indemnify or hold harmless if the employee fails to reasonably cooperate in the defense and settlement of a claim. Reasonable cooperation includes, without limitation, the following:
1. Promptly giving the Risk Manager written notice of any incident potentially giving rise to a claim against the employee that includes all information concerning the incident known to the employee.
2. Promptly delivering to the Risk Manager any claim, demand, notice, summons or other process received by the employee and relating to the claim.
3. Cooperating with the Borough Attorney or attorney retained by the Borough in defending the claim including without limitation attending interviews, depositions, hearings and trials, responding to discovery requests and assisting in securing and giving evidence and obtaining the attendance of witnesses.
4. Assisting the Borough in recovering any award for subrogation, contribution or indemnity against any third person that may arise from the claim from which the Borough indemnifies or defends the employee.
5. The employee shall not, except at their own cost, voluntarily make any payment, assume any liability or obligation or incur any expense other than for the first aid to others at the time of an accident.
6. Provide and/or authorize the Borough to obtain records and information reasonably relevant to a proper defense of the claim.
I. The Borough shall have the sole right to control the defense and settlement of the claim. The Borough may, in its sole discretion, and without the consent or participation of the employee, compromise or settle the claim on any terms that impose no legal or financial obligation upon the employee. Defense of the claim shall be provided by the Borough Attorney or other attorney designated by the Borough in its sole discretion; provided, that where a conflict of interest between the Borough and the employee would cause the representation by designated counsel to violate applicable rules of professional conduct, the employee may select other counsel subject to the Risk Manager’s reasonable approval.
J. After notice by the Borough to an employee of the Borough’s assumption of the obligation to indemnify, defend or hold harmless an employee with respect to a claim, the Borough shall not be liable to an employee for any legal or other expenses subsequently incurred by the employee with respect to the claim. If, however, the employee selects counsel as permitted by this section, the Borough shall pay the reasonable fees and costs of such counsel for defense of the employee.
K. To the extent the Borough makes payments for defense or indemnity of the employee, the employee must transfer to the Borough the employee’s rights of recovery against others related to the claim or loss including the right to recover attorney fees and other costs incurred in the defense of the claim. (Ord. 2015-34 § 12, 2015. 2004 Code § 2.24.341.)