Police Controversies Affecting Coverage
Fatal police shootings of unarmed citizens and other recent examples of officers using lethal force in the U.S. are fueling controversy, making headlines and creating tension between law enforcement agencies and the communities they serve.
The national spotlight on officer-involved shootings hasn’t prompted carriers to dramatically change insurance pricing or policies for municipalities; however, risk managers and underwriters are absolutely paying careful attention.
“It leads the discussion, and we have to answer a lot more questions,” said John Chino, Irvine, Calif.-based area senior vice president and leader of Arthur J. Gallagher & Co.’s public entity practice.
Chino said that underwriters may be less likely to write a new law enforcement risk, and that police departments with any history of officer-involved shootings may not be a fit for some carriers.
Underwriters may be less likely to write a new law enforcement risk, and that police departments with any history of officer-involved shootings may not be a fit for some carriers.
“Some insurance companies may restrict limits of coverage, or you may be looking at an increase in deductibles,” said Bill Brouillard, executive vice president at HUB International in Wilmington, Mass.
He said the law enforcement sector as a whole saw claims activity increase and loss ratios creep up over several years driven by the types of claims most prevalent among police departments, including workers’ comp and losses involving patrol cars.
Instances of police using lethal force on unarmed suspects, while highly publicized, remain rare and are not causing a spike in claims.
Michael G. Fann, director of loss control, TML Risk Management, acknowledged that the police departments he works with are concerned that public opinion about law enforcement will grow increasingly negative and could erode their communities’ trust in police.
TML is a nonprofit insurance pool program sponsored by the Tennessee Municipal League to provide all lines of coverage to more than 500 towns, cities and municipal agencies.
“The subject of community engagement is important not only for police, but also for every aspect of city government. We need to engage communities before they have an experience that would create a negative,” said Fann. “A first encounter with law enforcement in a neighborhood needs to not be when they’re [police] chasing me.”
“Law enforcement claims are going to be way more expensive to defend.” — John Chino, senior vice president and leader of Arthur J. Gallagher & Co.’s public entity practice
Reputational risk alone can be a factor in claims and losses, even in communities that haven’t experienced a shooting.
“Law enforcement claims are going to be way more expensive to defend,” said Chino, who recommended that his clients work with experienced attorneys to help determine whether to litigate or settle claims in a climate of negative public sentiment toward police.
“Clients will want to settle as quickly and quietly as they can because they’re not going to get a fair day in court.”
Chino’s municipal clients are budgeting in anticipation of settling more claims than they have in the recent past. Many set their claims administration reserves higher compared to 24 months ago, he said.
Fann counsels his insured on strategies to help their police departments “put credits in the bank,” or act to build a foundation of trust and emotional equity with the community, a relationship that will pay dividends when something negative happens.
Fann said that every law enforcement department can be more successful avoiding losses by focusing on policies, training, supervision and discipline for police officers.
Ken Wallentine, senior legal advisor and VP at Lexipol, a company that provides defensible policies and training for public safety organizations, said that some risk pools make it a condition of insurance coverage for cities to work with a consultant like Lexipol to set policies and train officers.
“First, make sure that rock-solid policies are in place. You need ultimate confidence in your policies; make sure they are performing,” said Wallentine. “Officer training should map to policies. Then verify that they were trained on the policies.”
Cities can pay for their loss control training programs with grants targeted for training, and with cost-sharing programs offered by reinsurers.
“As you enter into renewal, look for reinsurance and excess liability partners that know a lot about what works. If you get the police to implement training, reinsurers will help you pick the right training and will share the cost with you,” said Chino, who helps his clients navigate loss control issues, including the emerging issue of whether or not to require officers use body-worn cameras.
“The feeling from our risk managers is very positive,” said Chino. “They would like to implement body-worn cameras because they believe it makes the officer accountable, and it can be used as a training device.”
Brouillard agreed that cameras can give officers a reason to think rather than just act, and he said that early research has found that use-of-force incidents as well as police misconduct claims decreased when cameras were worn.
Police departments are evaluating policies, procedures and the price tag for cameras along with the cost of specialized employees to coordinate the storage and usage of video evidence, said Brouillard.
Camera use also raises concerns about invasion of privacy and potentially creates a chilling effect on people who need the police’s help. A victim of crime or abuse may not call police if he or she fears being filmed during a crisis or moment of vulnerability.
Brokers and insurance experts advise police departments to apply solid risk management principles and best practices to all aspects of running their organizations, including their evaluation and adoption of new technology.
A strategic, long-term approach to loss control will serve cities and counties well no matter what types of risk management challenges are making headlines.