The Stafford Act
The Stafford Act requires any organization that has received Public Assistance funding from the Federal Emergency Management Agency (FEMA) to obtain and maintain insurance coverage equal to or greater than the amount of eligible damage to the facility that receives Public Assistance - and that the insurance coverage be for the peril that caused the damage in order to protect against future loss. This is known as the Obtain and Maintain, or O & M, Requirement.
However, due to market conditions, insurance costs or other factors, an organization may not be able to obtain and maintain the insurance coverage to the full amount of the FEMA Public Assistance Grant. If this is the case, the Stafford Act entitles the organization to apply to the Commissioner of Insurance for an “Insurance Commissioner’s Certification” (ICC) to reduce the full O & M requirement. To facilitate this process, the Louisiana Department of Insurance (LDI) and the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) worked together to establish objective criteria that an organization must meet in order to be eligible for an ICC.
If granted, an ICC declares that, due to market conditions, insurance costs or other factors, some portion of the O & M requirement is not reasonably available to the organization, but that the organization has obtained the best insurance coverage it can under the circumstances such that the organization is still eligible for future FEMA Public Assistance.
Once an organization obtains an ICC, it must maintain the same level of insurance coverage that it acquired at the time of the issuance of the ICC in order to remain eligible for future FEMA Public Assistance funding in the event the facility is damaged by a subsequent presidentially declared disaster.
It is important to know that FEMA Public Assistance does not replace your private insurance benefits but rather supplements those insurance benefits in the event of a subsequent presidentially declared disaster.