On August 18 the Immigration and Customs Enforcement (ICE) agency announced a plan to provide subsidized personal liability insurance for state and local police working with ICE in immigration enforcement. The plan would shield rogue agents from legal expenses they are obligated to pay when they are sued for improper excessive use of force, wrongful arrests and unlawful search and seizure.
The program would also cover legal expenses for officers facing criminal investigations. The program would provide eligible policyholders with $500,000 of liability limit. The premium is government-subsidized by $250 per year. Government-provided or subsidized insurance has a poor track record, as it weakens incentives for risk management. The ICE proposal is a bad idea for this and more reasons.
First, it would stoke moral hazard. Local police may be less restrained from violating immigration laws if they know that insurance will shield them from financial consequences when they are sued for violating immigration laws. When police do not bear accountability for their actions, the door is opened to violate immigration laws with impunity, as there are no financial consequences to the errant agents.
Second, there are already structures for state and local police to cooperate with ICE in immigration raids and detentions. Section 287(g) of the Immigration and Nationality Act allows state and local police to partner with ICE.
Third, covering officers who face criminal examinations crosses the line separating civil tort law from criminal law. Insurance is not meant to cover criminal or intentional acts. Policies can be voided if defendants seek to cover their criminal acts with insurance.
In addition to the above drawbacks, there are unanswered questions regarding ICE’s proposed program. How is underwriting done – is there data on agents with a history of using unnecessary force? What private insurers will the government work with? Who devised the program? What is the targeted loss ratio? It was also unclear if the policy is a personal liability insurance policy or a professional liability (a/k/a errors and omissions) liability policy. If it is an E&O policy, is there a standard of care for those in the immigration enforcement business? We reached out to ICE for answers to these questions, but received no response.
Above and beyond the inherent folly of subsidized or free ICE personal liability insurance for immigration enforcers, it is noted that this proposal was one of several misguided programs in 2026 where the federal government would get directly involved in the business of insurance.
The flurry of proposed insurance-related programs started with the release of the Brookings Institution’s Hamilton Project in April. This premise of the Brookings plan was that reinsurance has become too scarce and too expensive. Brookings’ solution is the creation of a federal reinsurance program. The second proposed insurance program, introduced by the Vanderbilt Policy Accelerator in May, maintained that insurance companies have been overcharging their customers for many decades. The solution proposed is the introduction of a minimum loss ratio. The third bad insurance-related paper of 2026 came from the Leon Levy Economics Institute at Bard College in April. It maintained that the main cause of rising personal insurance premiums is climate change. This is not backed by analysis of loss costs. What is more, the Bard report fails to note that in the current soft market premiums are falling, not rising.
The ICE/police personal liability insurance program shares the same weaknesses as the above trifecta of proposed intrusions in insurance markets. It crowds out the private insurance market; it weakens incentives for risk management; and it causes cross-subsidization, where those with the most risk subsidize those with the least risk.
It appears that wherever there is a hue and a cry about insurance being unaffordable, the government calls on the usual suspects in academia or consumer advocacy to invent programs for underpriced insurance or reinsurance. And as other government insurance programs, such as flood insurance and crop insurance have demonstrated, the inevitable result of selling government-produced underpriced (re)insurance is growth in the national debt.
The proposed ICE program could backfire in other unintended ways. If it becomes widely known that immigration enforcers carry $500,000 of insurance, enterprising personal injury lawyers could create a new profit center banked by frivolous, unmerited allegations. Liability insurers have always been thought of as “deep pockets.” To the extent the pockets are the government itself, strap yourself in to another round of litigation gone wild.
Photo: AP Photo/Yuki Iwamura, File
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