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Insurance Law

Law Enforcement Liability Insurance – New Appleman on Insurance Law Library Edition, Chapter 33

By William G. Beck, Ian Hale, Sarah E. Millin and Jennifer M. McAdam, Attorneys, Lathrop & Gage LLP

Insurance law as it relates to most areas of law enforcement liability is developed enough to understand the risks that are covered under any given policy.  This law developed in a very traditional sense, in the context of cases seeking a remedy for very specific and readily identifiable injuries arising from single or linear acts and events. Innocence cases break from the law enforcement liability paradigm, presenting themselves as a fusion of traditional tort claims and state and federal civil rights claims, often asserted against numerous defendants and alleging multiple injuries from discrete and successive acts occurring over decades.

Innocence cases thus resist traditional insurance analysis developed under Commercial General Liability (“CGL”) insurance policies purchased by the private sector, and bring to the fore the language and operation of the special-risk Law Enforcement Liability (”LEL”) and Public Official Liability (“POL”) policies issued to law enforcement.

Judge Ruling on Case

Section 33.02 examines the ever-growing frequency of exonerations and subsequent innocence cases and recent studies estimating between 23,000 and 115,000 currently incarcerated people are innocent.  This section also discusses the average length of time served by these people—12 to13 years—and awards handed out to these people in innocence cases—$1 million per year in compensatory damages alone.  This section also notes the longstanding awareness of the possibility of these systemic failures in our system, and Insurers historic marketing and selling of LEL and POL policies to cover this exact risk without ever accounting for the technological developments such as DNA testing and the impact this might have on the calculus for the risks being written.

The types of policies that might be implicated in a typical innocence case are discussed in Section 33.03, as are the efforts that should be undertaken to locate all such historical policies in effect from the time of the first alleged misconduct through exoneration and the filing of the innocence case.

Section 33.04 and 33.05 examine the various language, provisions and operation of the most common of these special-risk policies, including both coverage and exclusionary language, and how they can differ from CGL policies.  This includes a discussion of the few decisions interpreting LEL, POL and, where instructive, CGL policies.

In Section 33.06 the chapter introduces the various trigger of coverage theories, which courts sometimes employ to determine when a progressive or continuing injury will be deemed to occur for insurance purposes, as well as how these theories can effect coverage for claims under policies with injury-based, but not act-based, Insuring Agreements.  Section 33.07 goes on to explore claims commonly asserted in innocence cases, and examines the existing insurance law on these claims under LEL, POL and CGL policies, as well as an examination of the elements of each of these claims and the impact those may have on coverage determinations.

Section 33.08 examines the various State Defense Acts, which typically provide defense of and some amount of capped indemnity for claims against State employees, and the ways these Acts can affect coverage.  Section 33.09 reviews the unanimous rule that State tort caps will not apply to 42 U.S.C. section 1983 claims for civil rights violations, and the rationale underlying this rule.

The chapter concludes with a review of state law on insurance coverage for both punitive damages and attorney’s fees awarded to a successful section 1983 claimant.  Section 33.10 also overviews the State and federal statutory Compensation Acts enacted to provide some monetary compensation to exonerees.

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William G. Beck, Ian Hale, Sarah E. Millin and Jennifer M. McAdam practice in the insurance recovery group of Lathrop & Gage LLP and have significant experience in obtaining insurance recoveries for innocence and other civil rights cases.

The authors would like to thank Jordan Bergsten and Amanda Sisney for their contributions to this chapter, and would also like to thank the attorneys at Neufeld Scheck & Brustin LLP for their many contributions to the authors’ understanding of this fast-developing area of insurance law.

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