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.