This past year we have seen major companies, sports teams, and individuals making a splash by trying to push for social justice activities through their dollars, actions or statements. The one industry that has been relatively quiet in the arena—and the one that has been quiet force around justice, safety, and responsibility for decadeshas been insurance. 

We joke around about the safety notices on pharmacy commercials, product warnings, and so on. And yet those notices are in place to improve product safety and protect the public, and their creation was primarily driven by insurance companies and loss engineers. What is less well known is that insurance has also quietly pushed companies to have programs for fair and equal employment, age discrimination, or sexual harassment prevention programs, by either requiring companies to have good programs in place in order to get insurance or by providing incentives to be in compliance. 

Carriers have done this, not because they are overly altruistic, but because it makes good financial sense to encourage companies to have good worker safety and human resource practices that protect workers and help prevent wrongful lawsuits. Insurance carriers also insure police. This can be done through policies with individual departments or with groups of towns and municipalities for smaller police units. 

Historically, carriers have worked with police units to take actions to curb losses and lawsuits. But perhaps now, similar to when equal opportunity laws and sexual harassment laws went into effect, its time to quietly take a more active role. If carriers can push to new underwriting standards designed to improve policing relations with their community and drive more equitable treatment to reduce lawsuits, they can continue to provide insurance to communities that are meeting the need. Those that aren’t willing to meet or make movement toward the new standards will be faced with either higher rates or a need to self-insure. Some of the key practices to consider: 

  • Hiring practices that consider the full conduct history of officers, similar to how medical hiring considers a doctor’s malpractice history and truck driving considers a driver driving history. Communities or states that maintain this information might be considered for preferential underwriting. 
  • Incident plans that lay out the agreedto steps on how various government institutions plan to work together to resolve and address various types of incidents should they occur so that there is a well-defined playbook. This is like the various hazard business interruption and business continuity plans a carrier would expect companies to have. 
  • Scope of services that the department performs. This would be similar to how other service organizations are evaluatedthe more things they specialize in, the less equipped they are to do all of them well. Police have a specific responsibility to protect and serve the community, but maybe less well equipped to deal with other community issues such as homelessness, mental illness, or hunger. Is the department being asked to do too much? 
  • Community relations that consider the department’s relation to its community. Its well known that companies that have better relations with their customers and with their employees are generally the better risk to write. Its time to consider whether departments that have better relations with all of the groups in their communities are also better risks. 
  • Training practices and proceduresare they appropriate to provide and maintain the skills of the officers in all their key responsibilities? Do they cover de-escalation, community policing, and interactions with different social or ethical differences, or are they less balanced? This is similar to the analysis carriers do in looking at other businesses to see if they are training on the full specialization for their services. 

In short, while other industries have been making the big splash, carriers can have just as much influence if not more quietly. Isn’t it time to rethink the underwriting and loss control standards for police departments to reduce liability exposure by driving loss prevention and policing practices that are more equitable for everyone?  

Special thanks to Desiree Emmanuel who helped research this topic.

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