Earlier quoted context omitted.
It's turtles all the way down though. If police need to carry malpractice insurance then the cost will have to be built into salary which is paid by the taxpayers. It might be cheaper to just have the state pay out then pay for a bunch of individual insurance policies.
The only difference I can see is that, like your car policy, if you have to pay a claim your rates go up. That would cause someone not to want a claim filed against them because their salary goes down (assuming the department doesn't just raise their salary to compensate). Still, I think you're right, the tax costs would just go up.
Noone (neither police nor citizens) want them on the force as they make everyone's life more difficult. But right now there is zero incentive to remove them, and only a union fighting to back them no matter what.
I'm assuming if you have a stream of 20-30+ excessive force complaints against you over the past two years, based on past behavior you are very likely to have them in the future and be the cause of a terrible situation leading to a lawsuit.