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Municipal Technical Advisory Service (MTAS)

Governmental Liability Caps

Reference Number: MTAS-275
Reviewed Date: 12/21/2021

The act caps at specified dollar amounts the liability exposure of local governments for tort claims. Every policy or insurance contract purchased by a governmental entity must provide these minimum coverage amounts. The caps (or minimum coverage amounts) in the chart below apply in each accident.  T.C.A. § 29-20-403.

Governmental vehicles may be considered uninsured motor vehicles. However, the applicable limits of liability for cities for claims arising out of the operation of a government vehicle are equal only to the limits of T.C.A. § 29-20-311, T.C.A. § 56-7-1201(d), and T.C.A. § 56-7-1202(b).

The law is comprehensive, but it does not affect certain statutes. Any action in eminent domain initiated by a landowner (inverse condemnation) under T.C.A. § 29-16-123 and T.C.A. § 29-16-124 is explicitly exempted from the caps. T.C.A. § 29-20-105. Similarly, the caps do not apply to any action brought by an employee under Tennessee’s workers’ compensation laws. T.C.A. § 29-20-106.


  Date Cause of Action Arose  

  Liability cap for Death or Injury to One Person     Liability Cap for Death or Injury to All Persons     Liability Cap for Property Damage  
  On or after July 1, 1987, but before July 1, 2002.      $130,000    $350,000   $50,000 (applies to causes of action arising on or after July 1, 1992)  
  On or after July 1, 2002, but before July 1, 2007.      $250,000    $600,000   $85,000
  On or after July 1, 2007      $300,000    $700,000   $100,000