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Can a police settlement paid by insurance inspire change?

The money that police departments shell out for misconduct settlements may be mitigated by insurance companies forcing policy change.

IDAHO SPRINGS, Colo. — The $7 million Idaho Springs will pay to a man Tased by an officer in 2020 represents more than five times the budget the city sets aside for its police department.

It’s representative of a trend in larger reported police settlements in the era after the murder of George Floyd.  

Joanna Schwartz, a law professor at UCLA who has researched police settlements across the country, said it’s hard to tell if police settlements really are getting larger because many of the details of them aren’t publicly released.

“Public sentiment, public skepticism about policing post George Floyd’s murder is partly what’s inspiring [larger settlements], and that may lead juries to award more in damages, and it may lead local governments and insurers to offer more in settlements,” Schwartz said.

When insurance companies pay out these settlements, Schwartz said they can often influence change within a department.

“Insurance companies that are actually paying the dollars in these cases can require changes in policies and procedures under the condition of continued coverage or as a condition of not increasing premiums,” she said. “An insurer, they can say you need to change those policies or at least take a closer look at those policies. Introduce additional training. Reflect on what happened in this case to ensure it doesn’t happen again.”

In her research of settlements across the country, she found when these cases are settled, police departments themselves rarely feel the financial burden. If an insurance company doesn’t pay the claim, a city government will usually pay to settle a case from a general fund.

In those cases, it’s often up to local political leaders to push for change in a department, which may create a difficult political decision.

“Insurance companies have the ability to say we don’t want to cover you anymore and can make that decision apart from the kinds of political pressures that you can imagine would be in play if it was the city council making that kinds of decisions,” Schwartz said.

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