Public entities insurance is in a league of its own when it comes to commercial accounts. But while this line of business differs significantly from other commercial markets, public entities will face some familiar new challenges as the insurance world becomes more and more technologically advanced.

Here are three emerging risks that will impact your public entities clients in the near future—if they’re not making waves already.

Cyber: “Like a lot of businesses, public entities are targets of hackers,” says Chuck Wright, president of Travelers Public Sector Services. “They hold a lot of private information. They are targets not only for those that want that information to sell, but there also could be a political motivation to a hack for a public entity. Next year is an election year. Who knows what that’s going to do?”

And while data breach remains a huge concern, plenty of other cyber exposures pose a threat to public entities as well. “So much equipment now—waste treatment systems and other types of utilities—can be accessed through the network or Internet,” says E. Stuart Powell, Jr., vice president of technical affairs at the Independent Insurance Agents of North Carolina, whose sister corporation brokers insurance for the state. “You could shut down systems, you could shut down automobiles, you could do all kinds of things.”

In response to these risks, Brendan Falvey, product line director for public entities for Markel Corporation, has noticed more requests for $1-2 million cyber liability limits. “Evaluation of in-house cyber controls is key in pricing, since cyber liability is a relatively new line of coverage without credible historical loss experience as a basis to price product,” he notes.

Further complicating matters is the fact that public entities are subject to the Freedom of Information Act, which means they must comply with legal requests for information. While many agents and their clients are concerned about a hacker illegally accessing public entity systems and stealing information, “their biggest concern is actually the failure to redact,” Wright says. “A public entity may have an obligation to release some report, but they also have an obligation to protect privacy. Public entities are very much afraid of responding to a legal request for a release and voluntarily putting information out that they shouldn’t be.”

Drones: Like many of their commercial counterparts, public entities may have a variety of uses for drones: surveillance, inspections, search and rescue missions and more.

Although the Federal Aviation Administration (FAA) has filed proposed rules for using commercial drones, “we don’t know what kind of exceptions there may be for governmental use,” Powell says. “They’ve already issued several hundred exceptions or waivers from the proposed rules for municipal and governmental usages. You have public safety involved and a number of other considerations that will allow the FAA to give governmental entities a little more latitude than it might be willing to give commercial entities.”

Falvey, who works primarily with public entity pools, says Markel asks upon every renewal whether the client knows which members are using drones, and if so, for what purpose? “We’re not seeing them on a huge scale yet,” he says. “The FAA’s final regulations are not expected until mid-2016, but many states have adopted [their own] drone legislation.”

A handful of drone issues may bleed over into cyber, as well. “Most of these drones are controlled by a data link, and someone could interloop into that data link and commandeer one of the drones,” Powell points out. “Another thing is invasion of privacy—flying drones over areas where people think their privacy has been violated.”

Law enforcement: If you insure public entities, you’re no stranger to this risk category. But law enforcement has become a major hot-button issue for public entities over the last two years as incidents like the Baltimore riots continue to push police behavior into the spotlight. “In public entities, professional liability is very important,” Wright says. “A public entity with law enforcement exposure can’t afford to go bare.”

According to Travelers, in December 2014, the Obama Administration called for $263 million in federal funding for police training—$75 million of which will specifically fund body-worn cameras for law enforcement personnel in order to provide a definitive record of police activities. But purchasing the cameras is “only part of the expense,” Wright points out. “Buying it is one thing—maintaining it and setting up the practices you need to properly handle those recordings is important and expensive.”

Travelers reports that body-worn cameras generally consist of closed-circuit video recording devices that law enforcement personnel wear on the front of their shirt, hat or glasses. Once recorded, digital files are protected from deletion or editing, and most have a unique identifier with time- and date-stamped recordings.

Implementing the cameras requires public entities to set procedures for storing data, as well as setting guidelines for who has access to that data and how they can use it. “Those protocols are in place to protect even just the chain of evidence,” Wright explains. “Who can take custody of that camera?”

After researching the topic extensively, Travelers recommends public entities that implement body-worn cameras maintain ownership of the equipment. “They don’t want the police officer buying their own, because they don’t want to be in that situation where after an incident, there is a dispute about who gets to maintain control of the camera itself,” says Wright, who notes that approximately two-thirds of public entities currently either have body-worn cameras programs in place or are seriously considering it.

“The body camera issue is going to affect all types of law enforcement, whether it be a state policeman or a highway patrolmen or whoever. I think the situation in Baltimore would have probably been quite different if that officer had been wearing a body camera,” Powell says. “When it’s a single law enforcement officer and a single person perpetrator or whatever suspect, it’s just one word against another. Having some kind of verification as to what happens, some kind of audio or visual record of what took place, is getting to be extremely important.”

Powell adds that he has seen similar liability issues with enforcement officers in North Carolina’s state and prison systems. “Whether it translates into tighter terms and conditions or price increases, I think you can anticipate some movement in the law enforcement professional liability arena, simply because of all the issues that are going on culturally,” he says.

Jacquelyn Connelly is IA senior editor.