Years of lawsuits and insurance claims against the city police department, among other city departments, has left Hyattsville with some of the worst insurance statistics in the state across a number of categories, according to data released by city officials last week.
"We need to make some changes internally to be better," acknowledged Acting City Administrator and City Treasurer Elaine Stookey in an interview earlier this week. "We may need to think about doing business differently than we have done in the past."
Police Liability Insurance Pays Out Frequently
The data showed that the city's law enforcement liability insurance was paying claims at an alarming rate. Out of the 83 statewide members of the Local Government Insurance Trust with police departments, Hyattsville has the fourth worst law enforcement liability insurance loss ratio.
Over the last three years, the city has paid a total of $62,600 in law enforcement liability insurance premiums. But in that time, city insurers have had to pay out $407,000 in claims against the Hyattsville police department. That leaves the city with a three-year loss ratio trend of 618 percent, a ratio more than 1,785 percent above the 83 other LGIT (pronounced 'legit') law enforcement liability insurance policy holders.
To put it another way, if the city police department's average insurance claims over the last three years were split between each of the city's 43 officers, they would each be responsible for an annual average claim cost of roughly $3,000 per officer. That's 100 times more than the $300 average claim per officer among the rest of the LGIT insurance pool.
Some city council members were visibly flabberghasted by the numbers.
"So we're right on the edge of being uninsurable?" asked Council President David Hiles (Ward 2) at last week's meeting.
Not really, responded Stookey, but LGIT officials have privately encouraged city officials to take action to reduce their law enforcement insurance risks.
"That's why LGIT is there. Some cities were in danger of losing insurance," said Stookey. "There are inherent risks to having a police department, too."
Since 2003, the law enforcement insurance has paid $1.5 million in claims. Of that, $535,000 has been paid out in relation to 112 auto insurance claims. The remaining $953,800 comes from 48 law enforcement liability claims against the city's policy.
Insurance Costs and Uses
These insurance claims can used to pay for a number of different things, including legal services and damages rendered when the city police department is sued in court, and medical costs arising out of police incidents, among others.
Over the last 10 years, the city police department has been sued seven times in federal court. Three of those cases have been dismissed. The other four, including a recently filed federal sexual harassment lawsuit, are still open. The costs for legal teams to sort through the cases for the city is paid for through the city's law enforcement liability insurance.
The insurance issues are not without other, hidden costs.
"When you have police and other staff spending time in court, even just in preparation for court, it's lost productivity time," said Stookey. "There are indirect costs that we can't really talk about because we didn't capture them."
Despite the high loss ratios for the city's law enforcement liability insurance, the city's law enforcement liability premiums have not risen by much over the last three years, staying at an average of $20,800 per year.
Auto Liability Payouts Exceed Averages
The city is also ranked low on LGIT's auto liability loss category, with an 89 percent loss ratio trend over the last three years. That puts the city at rank 112 out of the 124 members of LGIT's auto liability insurance pool. During that time, the city paid an average of $63,336 in auto liability insurance premiums while LGIT had to pay an annual average of $35,142 in auto liability insurance claims.
Thus, if the average auto insurance liability claims against the city were split equally among the roughly 105 vehicles in the city fleet, each car would be responsible for an average $330 in insurance claims per year over the last three years. That's more than three times the average auto-liability claim cost per vehicle in the statewide LGIT insurance pool.
Stookey said that the city could go a long way towards remedying the issue by more directly addressing insurance risk in city operations.
"We need to take a good look at our risk management and how we handle that," said Stookey to city council last week.
The city has already appointed a 10 member safety committee consisting of municipal department officials and a council liaison.
Another idea is to add a section addressing risk management into staff evaluations.
"Personnel evaluations have nothing right now which address an employees risk management concerns," said Stookey.