U.S. Municipalities Little Exposed to Riot Risk
BY STEVE TUCKEY, who has written on insurance issues for a decade for several national media outlets
With the eyes of the world on the London upheavals, many municipal risk managers may ask themselves what liabilities their employers have in such situations, which have not happened on such scale since the 1992 Rodney King riots in Los Angeles.
"There is not much," said Mark Willard, Dallas area-based vice president for Public Risk Underwriters of Texas.
Law enforcement liability policies in the U.S. fall into two categories: so-called "failure to protect" claims filed by merchants and residents harmed by the riots, and wrongful arrest and excessive force claims against police filed by alleged wrongdoers.
Willard said the courts will hold any "failure to protect" claimants to a very high standard. "The system will more than likely favor law enforcement agencies in such situations," he said.
Where law enforcement agencies face exposure, Dillard said, is in the area of wrongful arrests and excessive use of force that can sometimes result when situations get out of hand.
The exposure can increase if such policies, as they often do, exclude "wars, riots, civil commotion, upheaval and insurrection" incidents from coverage.
When an incident crosses that threshold could present some thorny coverage issues, but Dillard said he did not know of any cases in which it was in question.
"I suppose you could have a gang of hoodlums that by most definitions would not constitute a riot, but it remains to be seen what the exact line is," he said.
Karen Graham, Denver-based broker for Arthur Gallagher & Co., said pollution exclusions could also apply. "When you are thinking about a riot you are thinking about tear gas, mace, etc., and municipalities may not always be covered from such damages, particularly on claims from third parties such as passersby and the like."
Other exposures municipalities could face stem from property damage incurred by law enforcers in controlling a riot. And coverage could also vary depending on whether police were controlling a riot in their own jurisdiction, or were responding to assistance calls from nearby municipalities, she said.
David Parker, risk manager for the Pima County Sheriff's Department in Tucson, Ariz., said failure to either protect, train or supervise "are all difficult claims to prove, but they are very time-consuming and difficult to defend."
Even with "failure to protect" claims, the more levels there are to the claim the greater the likelihood you can end up in front of a jury when anything can happen, Parker said.
"They may decide they want to send a message," he said. "So there is a great risk to every claim, even though the threshold is much higher in the failure to protect instance."
Risk managers would be wise to shop for policies without the riot exclusion since incidents stemming from labor disputes, and even sports events, might fall into that category, Parker said.
And while the Arab Spring may not seem all that relevant in this country, it did underscore the power of social media to escalate tensions to the breaking point in a manner law enforcement officials are only beginning to understand, he added.
August 23, 2011
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