An Arresting Fact: Municipalities Bear Growing Risk for Police Actions

Allegations of police officers’ excessive use of force reached a flashpoint in 2020, igniting massive protests and riots across the nation. As officers in several cities face criminal charges in fatal interactions with suspects, one might expect civil liability claims against those individuals to follow. In fact, that is not the case. For various reasons, public entities bear the liability risk for police department actions. And that exposure is becoming more difficult to transfer.


Broad support for several policing policies, including making it a crime for police to use chokeholds6 % of respondents Strongly oppose Somewhat oppose NET 7 3 10 3 24 9 25 7 25 8 Somewhat favor Strongly favor 75 74 74      Require police to be trained in nonviolent alternatives to deadly force NET 92 90      4 22 71      Create a federal government database to track officers accused of misconduct Give civilian oversight boards power to investigate and discipline officers accused of inappropriate use of force or other misconduct Require officers to live in the places they police Make it a crime for police to use chokeholds or strangleholds    7 27 62      32 43 15      39 35 18      17 25 49 Note: No answer responses not shown. Source: Survey of U.S. adults conducted June 16-22, 2020. PEW RESEARCH CENTER

Both the Senate and House of Representatives have introduced legislation to pare back or eliminate qualified immunity in bills proposing sweeping police reforms.1 In July, New York introduced a bill that would require police officers to carry personal liability insurance for civil suits over their use of excessive force and misconduct.2

The legal doctrine of qualified immunity shields state and local officials, including police officers, from lawsuits over actions performed in their official capacities. In 1967, the U.S. Supreme Court established the concept of qualified immunity, which initially applied to arrests made under unconstitutional statutes. In subsequent rulings, the high court extended a general “good-faith” defense for government officials. The effect of this doctrine was that plaintiffs could not recover damages for violations of their rights under the Constitution or other federal laws.

As a result of qualified immunity, there is no legal mechanism for bringing civil charges against individual police officers. Even if plaintiffs wanted to pursue civil liability claims, the doctrine effectively bars such actions. Their only recourse, until the law changes, is to seek compensation from the public entities that oversee the police departments. Ultimately the cost of verdicts and settlements is borne by the tax payers.

In addition, personal liability insurance is highly unlikely to cover police officers for actions performed in their official duties. The main forms offering personal liability coverage, homeowners and personal umbrella policies, contain exclusions for intentional acts.

An additional obstacle to plaintiffs suing police officers – and it also would apply to insurers underwriting personal liability products if qualified immunity is eliminated – is the secrecy of police misconduct records.3 Police unions strongly oppose access to such records, and few if any underwriters would issue liability coverage without the ability to look at prior conduct. For this reason, the New York legislation includes a provision that would repeal a longstanding rule that seals police disciplinary records.


A survey by Pew Research in mid-June found that two-thirds of Americans believe individual officers should be held liable for excessive use of force. A similar survey four years earlier found that public attitudes toward police are shifting. For example, 58% of respondents in the 2020 survey said police do a good to excellent job of protecting the public from crime. In Pew’s 2016 survey, 62% rated police that way. In the current survey, 66% agreed that “civilians should have the power to sue police officers in order to hold them accountable for excessive use of force or misconduct.” Few respondents, however, said they would support cutting police budgets, despite protestors’ calls to “defund the police.” Pew found survey respondents overwhelmingly support some reforms, such as banning certain holds during arrests and requiring additional training.4

Declining shares of Americans give police forces positive ratings for using force appropriately, treating racial groups equally and holding officers accountable6 % of respondents    Protecting people from crime Using the right amount of force for each situation 45 NET 62 Excellent Good Only fair Poor 10 NET 37 41 Holding officers accountable when misconduct occurs 44 Treating racial and ethnic groups equally 47 11 34 54 53 56    58  16  15  35    10 89 31 9 69 Sept June '16 '20       46 43 12    35 36  27 25 32 22          27 26 32 28 26 26 26 27        Sept June '16 '20 64 Sept June '16 '20 65 Sept June '16 '20 15  22 36 27 39 30 42    Note: No answer responses not shown. Source: Survey of U.S. adults conducted June 16-22, 2020. PEW RESEARCH CENTER


The ubiquity of cameras – from cell phones to body cameras to dashboard cameras – has meant that more interactions with police are recorded and shared. The broadcasting of police misconduct via social media is contributing to calls for reform and prompting some plaintiffs to litigate. As a result, public entities will continue to face more and larger lawsuits, and feel increased pressure to avoid litigation, leading to bigger settlements.

Litigation over police activity is only one factor that is squeezing public entities, however. Many municipalities continue to struggle with claims of sexual harassment, abuse and molestation since the #MeToo movement heightened awareness of such misconduct. Social services provided by public entities, such as parks and recreation programs and camps for children, and public schools, are exposed to current as well as older claims. Several states have increased the statute of limitations or opened “lookback windows” for sexual abuse lawsuits.

Coupled with the current push to hold police accountable, public entities’ growing liability exposure has led many insurance markets to introduce countermeasures.


The insurance marketplace is continuing to harden across many casualty lines. For public entity liability risks, many insurance carriers are reducing capacity, and some are exiting this business outright. Beyond increases in deductibles and sharply higher rates from carriers still willing to quote, it is becoming more challenging to fill out insurance programs.

For example, to fill out a public entity excess liability tower a few years ago, it was possible for public entities to obtain $25 million in limits from only one or two markets. That same tower today may require 6 markets or more at a significantly higher premium.

Insurers anticipate large liability claims from public entity accounts, and many have increased their reserves. Insurers also are requiring public entities to bear more of the risk. In at least one instance during a recent renewal, an insurer insisted on raising a self-insured retention from $250,000 to $5 million.


Much like private businesses, public entities come in vastly different sizes, with budget challenges large and small. Census Bureau data shows the United States is a nation of small towns, with more than three-quarters of the country’s nearly 19,500 incorporated places representing cities and towns of fewer than 5,000 people. Four percent of U.S. cities have populations exceeding 50,000. From a risk transfer perspective, public entities vary widely.5

About 76% of the approximately 19,500 incorporated places had fewer than 5,000 people. Of those, almost 42%% had fewer than 500 people.

While public entity budgets and funds for insurance programs generally come from taxpayers, three predominant risk financing approaches are used:

  • Small-deductible and guaranteed-cost programs. Smaller and midsize municipalities are the main buyers of insurance written with these terms.
  • Self-insured retentions. Larger cities and towns that can afford to take on more of their risk tend to use SIRs to access higher limits from commercial insurers.
  • Risk pools. Governments of varying sizes band together to share risks and best practices in risk pools. A large percentage of public entities belong to such pools. The United States has hundreds of risk pools, which generally self-insure their risks through captives or risk retention groups and purchase reinsurance above the level of desired self-insurance.


Retail agents play an important role in advising public entities on insurance and risk mitigation. Those agents working with municipalities that don't belong to risk pools can take several steps to help their insureds obtain appropriate coverage. These steps include:

  • Start renewals much earlier. Renewing policies in the public entity sector can take far longer than for other types of casualty business. Part of the reason is municipal boards and councils must approve insurance purchases, and to consider such matters, they must publish their agendas ahead of each meeting. Therefore, retailers should start renewals for public entity accounts at least 150 days before policy expiration. Many agents wrongly assume insurers will not quote accounts that far out, but in fact insurers experienced in writing public entities recognize the need for this timing. Insureds should also strive to put together more comprehensive submissions, including up-to-date policies and procedures and updates that relate to their emerging exposures.
  • Communicate with insureds. Retailers should communicate frequently with their insureds ahead of renewal periods, especially when market conditions are hardening. Insurers’ reaction to increased liability exposure for public entities, from rate hikes, steep increases in deductibles, and reduction in capacity can be an unpleasant surprise to public entities already feeling financial pressures from the impact of the coronavirus, public demonstrations and past claims.
  • Focus on exposure mitigation. Are public entities implementing additional training for police officers and municipal employees to reduce liability exposure? If so, discuss the details with insureds so this information can be presented to underwriters.
  • Work with a wholesale specialist. Working with a wholesale broker who specializes in the public entity sector is the surest way to obtain the best available coverage. Knowledge of the sector and the insurers that serve it offers insureds the best opportunity to reduce risks that can erode budgets and force cutbacks in other critical community services.


Public entities are facing higher liability risks and coming under scrutiny, as the nation focuses on misconduct by police and other public employees. Because the legal doctrine of qualified immunity shields individual government employees from civil liability, the cost of defending and settling civil lawsuits will fall on public entities. Having appropriate insurance in place and programs to mitigate liability exposures will be increasingly important. To obtain the best coverage available in the hardening market, public entities and their retail risk advisers should work with an experienced wholesale specialist with deep knowledge of the public sector. Contact your CRC Group producer for more information.


  • Ben Merris is Senior Vice President and Director of Public Entity at CRC, based in Chicago.
  • Bob Greenebaum is Executive Vice President, Central Regional Director and Casualty Practice leader for CRC Group, based in Chicago.


  1. “As Congress debates police reform, qualified immunity emerges as a key dividing issue,” USA Today, June 16, 2020;
  2. “New bill would require NY cops to have personal insurance for liability suits,” New York Post, July 7, 2020;
  3. “Police misconduct records are largely kept secret in US,” ABC News, June 12, 2020;
  4. “Majority of Public Favors Giving Civilians the Power to Sue Police Officer for Misconduct,” Pew Research Center, July 9, 2020;
  5. “America: A Nation of Small Towns,” U.S. Census Bureau, May 21, 2020;
  6. “Majority of Public Favors Giving Civilians the Power to Sue Police Officers for Misconduct,” Pew Research, July 9, 2020;