General Discussion

If the damage was during the course recognized and lawful operations, then the property owners insurance is on the hook for it. Doesn't matter if the person was innocent or not, or not even directly involved with the situation. If its a legitimate operation, then it falls under public necessity. If the police were negligent, reckless, or otherwise acting outside the scope of a lawful police action, then they can be held liable for the damages. In practice though, it's a mixed bag on getting courts to side with the property owners or insurance company.