Insurers' Influence: Regulating Public Police And Privacy

A string of deadly police-citizen encounters has brought American policing into the spotlight, with legislators introducing a wide array of reform proposals. However, optimism is elusive as the police are notoriously resistant to change. One powerful policy lever that has been overlooked is police liability insurance. Assistant Professor John Rappaport's paper, published in the Harvard Law Review, examines the role that municipal liability insurance plays in regulating police behaviour. The paper reveals how the insurance industry helps shape police behaviour, what it means for a private company to regulate a public entity, and how this relationship could offer lawmakers additional tools for legal reform. The paper also discusses the ways in which insurers perform a traditionally governmental regulatory role as they work to manage risk, such as getting police agencies to adopt or amend written departmental policies on subjects like the use of force and strip searches, and even influencing personnel decisions.

Police liability insurance as a policy lever

Police liability insurance is a powerful policy lever that can drive meaningful change within police agencies. It is a form of professional liability insurance that protects law enforcement professionals from financial risks and liability arising from accidents, incidents, claims, and lawsuits.

Police liability insurance provides coverage for bodily injury, personal injury, and property damage caused by a wrongful act committed by a public entity during law enforcement activities. It covers defense costs, attorney fees, court costs, and settlements or judgments that must be paid to the injured party.

Who does it cover?

Police liability insurance can be purchased by law enforcement agencies and municipalities to protect police officers, departments, and municipalities from lawsuits. It is applicable to various law enforcement agencies, including sheriff's departments, college or university police, and port or airport authorities.

By having police liability insurance, law enforcement professionals can have peace of mind knowing that they are financially protected in difficult situations. It helps mitigate the financial losses resulting from litigation, allowing officers and departments to focus on community safety without burdening taxpayers.

Insurers influence police agencies in several ways. They shape departmental policies on high-speed pursuits and the use of force, training methods and duration, and even personnel decisions. Insurers may encourage agencies to obtain accreditation and implement risk-management strategies to reduce liability and control losses.

One concern is the "moral hazard," where insurance coverage may create an incentive for police to behave badly. To mitigate this, insurers ensure police agencies have skin in the game through policy limits, higher deductibles, and risk-management programs. Another challenge is the interpretation of the law by private, for-profit companies. Insurers may insist on certain policies or practices, such as those regarding the use of force, which raises questions about the appropriateness of extrajudicial interpretation.

The role of insurers in shaping police behaviour

Insurers play a significant role in shaping police behaviour, particularly when it comes to liability insurance. By offering financial incentives such as coverage, lower premiums, and other perks, insurers can encourage law enforcement agencies to adopt policies that reduce incidents of police misconduct. This dynamic is similar to the influence insurers have on environmental risks and employment arrangements.

Liability insurance is common among small and mid-sized municipalities, and insurers have a hand in shaping departmental policies on high-speed pursuits, the use of force, and strip searches. They influence how officers are trained and can encourage agencies to obtain accreditation or even intervene in personnel decisions. Insurers may also have a say in the choice of police chief and can pressure police departments to terminate officers deemed too risky to insure.

Insurers create financial incentives for better police behaviour by framing constraints as part of a risk-management strategy to reduce liability and free up funds for equipment and salaries. This approach may be more effective than solely appealing to morality. The rank-and-file officers understand their city's interest in reducing liability payouts, and in some cases, are incentivised with better equipment and training.

The insurance industry's role in regulating public entities, such as police departments, is unique. While public and private actors often work together, it is less common for a private actor to give an ultimatum to a public entity, saying "do this or else." This dynamic has implications for legal reform, as it suggests that regulating insurers could be a way to indirectly regulate the police.

In conclusion, insurers have a significant influence on police behaviour and can be a powerful tool for reform. By managing risk and creating financial incentives, insurers can shape departmental policies, training, and personnel decisions, ultimately contributing to a comprehensive program of police reform.

The influence of insurers on police training

Insurers have a significant influence on police training, from the content of training programs to the methods used. They support and influence police training efforts by providing video libraries, online training systems, and classroom instruction. Insurers also subsidise the use of otherwise expensive use-of-force virtual reality simulators, which have been shown to increase the number of preventative actions officers take and decrease the number of unjustified shootings.

Insurers also have a hand in deciding how officers are trained, how much training they receive, and how that training is delivered. They may encourage the adoption of new approaches to training that have been empirically proven to improve outcomes. For example, a combination of lectures, theoretical classroom discussions, and practical application of knowledge in a simulated training environment has been shown to improve learning, health promotion, job performance, and officers' capacity to translate theoretical knowledge into police practice.

Insurers can also put pressure on agencies to "correct" or terminate officers they view as heightening liability exposure. This can range from officers on the beat to the police chief.

Insurers create incentives for police departments to seek accreditation from recognised accreditation agencies, which perform policy reviews and audits. They may also work closely with the police to promulgate and update departmental policies, bringing in outside consultants or retired officers to do so.

Insurers' power to intervene in personnel decisions

Assistant Professor John Rappaport's paper, "How Private Insurers Regulate Public Police", examines the role of municipal liability insurance in regulating police behaviour. The paper, published in the Harvard Law Review, highlights the influence of the insurance industry on police behaviour, particularly through financial incentives such as the availability of coverage, lower premiums, and other perks.

One aspect of this dynamic is the insurer's power to intervene in personnel decisions within police departments. While this is a delicate area, insurers can choose to not cover a department that employs a particular officer if they deem them to be a "bad apple". In such cases, insurers may request the termination of these officers, and there have been instances where police departments have complied with these requests. In some cases, insurers may even influence the choice of police chief.

The insurance industry's role in shaping police behaviour is significant, as it creates financial incentives for better police conduct. By framing constraints as part of risk management, insurers may make it easier for police departments to accept and implement changes. This dynamic also provides lawmakers with additional tools for legal reform and police regulation.

The paper also explores the potential for policymakers to regulate police conduct indirectly by regulating insurers. For example, requiring deductibles in police liability policies or mandating that all municipalities purchase insurance coverage could be strategies to reduce police misconduct.

The impact of insurance on police misconduct cases

Police liability insurance is a powerful tool that can bring about meaningful change within police agencies. By offering financial incentives such as the availability of coverage, lower premiums, and other perks, insurance companies can curb incidents of police misconduct and regulate police behaviour.

Insurers can also influence the cost and availability of policies, which can impact the city's budget and trickle down to the supervisory structure of the police department. For example, if an insurer raises premiums due to a police department's high-risk behaviour, the city manager may pressure the police chief to implement changes to reduce costs. This complex chain of influence can lead to changes in policies, training, and personnel within the department.

Additionally, insurance companies can play a role in shaping departmental policies on sensitive issues such as the use of force, strip searches, and high-speed pursuits. They can encourage the adoption of new training approaches that have been empirically shown to improve outcomes. Insurers can also conduct audits of police departments and encourage them to obtain accreditation, further shaping their practices and policies.

The insurance industry's role in regulating public police is a unique dynamic, as it involves private companies essentially regulating public entities. This dynamic has led to concerns about the interpretation and enforcement of constitutional rights, as well as the potential for a "code of silence" within police departments to minimise the risk of losing insurance coverage.

In conclusion, the impact of insurance on police misconduct cases is far-reaching. Insurance companies play a crucial role in shaping police behaviour and policies, often creating financial incentives for departments to adopt reforms and reduce misconduct claims. This dynamic has the potential to bring about meaningful change within police agencies and contribute to the broader goal of police reform.

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