The cop paid $35,000? Or the taxpayers shelled it over?
Great question. I suspect the latter.
per story: The lawsuit was forwarded to the townships insurer.
The insurance company paid, as it says in the article. The premiums were part of the normal expenses of operations. The premiums on the policy were likely taxpayer paid as part of the operations of the police department, since the officer was acting in the course and scope of his duties as a LEO.
Any lawsuit proceeds against the party sued and then the insurance pays out. In most cases, insurance cannot be noted as involved during trial (if it gets that far).