Insurance as a Risk Management Mechanism for Local Communities: An Analytical Study of the Civil Liability Insurance Contract of the Municipality of Sétif with the Algerian Insurance Company (CAAT)

Abstract

Local communities in Algeria, represented by the wilaya and the municipality, face a wide and heterogeneous portfolio of risks arising from their multiple administrative, social, and technical functions. These risks translate into direct financial losses on municipal assets and third-party claims that strain local budgets. This study examines insurance as a structured risk management tool for local authorities. Drawing on the theoretical framework of risk and insurance, it conducts an in-depth analysis of the general civil liability insurance contract concluded between the municipality of Sétif and the Algerian Insurance Company (CAAT), and situates the case within the broader context of the Algerian insurance market as reported in the 2024 Activity Report of the Directorate of Insurance. Findings confirm that insurance provides an effective mechanism for risk transfer, financial protection, and indirect support to local development.