The city of Idaho Falls this month agreed to pay $11.7 million to a man who spent more than 20 years in prison for a 1996 murder he didn’t commit.
But it’s mostly insurance money—not taxpayer dollars—that’s footing the bill, thanks to a strategy championed by a Kansas City, Missouri law firm.
The Lathrop GPM strategy encourages municipalities to settle civil rights claims in part because case law established by the firm shows cities can stick insurers for the bill.
The approach has forced insurers to pay more than $217 million in the last two decades, according to the firm. Lathrop GPM is poised to add to the total with successes in Idaho and Pittsburgh this month and ongoing cases in roughly a dozen other states.
Insurers have responded by raising the cost of premiums for what’s known as public entity liability insurance policies. Underwriters are also excluding some behaviors under the policies from coverage to prevent future payouts.
But such steps don’t prevent payouts under policies put in place decades ago.
“There’s nothing you can do about claims from the 1990s,” said John Chino, area senior vice president for insurance broker Arthur J. Gallagher & Co. “That’s what makes it a tough business.”
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