The officer was last year awarded $743,780 after a court found NSW Police Force failed to conduct a thorough mental health assessment of the officer from May 2007.
She was medically discharged in 2010 after an 18-year career, which included seeing a man's suicide, unsuccessfully trying to help save a car crash victim and seeing a decomposed body on a tree.
The NSW Court of Appeal this week rejected a state government appeal that claimed it didn't breach its duty of care.
But the court did overturn a finding that the officer had contributed to the breach by failing to mention her depressive condition to a police psychologist in 2007.
The psychologist should have inquired whether the officer had symptoms of PTSD when she hadn't answered a question on a form about the disorder, the court said.
That increased the payout to $858,000.
One of the traumatic incidents occurred in 2005 when the woman attended a "grizzly spectacle" of a decomposed body with an "overwhelming stench" hanging in the bush.
She had to remove the body and clean fluids off his wallet.
Four months earlier, she'd clambered into the wrecked vehicle of a deceased young man, and then been tasked to inform his mother.
Police did not organise critical incident debriefings after either incident, meaning no records existed of any psychological difficulties when she faced challenges later.
The woman took stress leave in March and May 2007.
When her commander suggested she might return to frontline policing work in 2007, she told him she was "sick of being physically and psychologically injured at work".
Then in June and September 2007, two colleagues she was friendly with killed themselves.
The police organised a psychologist to attend the police station, encouraged staff to use an Employee Assistance Program and organised a presentation from the Black Dog Institute.
There was a queue of other officers to see the psychologist when she had a session.
The primary judge, Alister Abadee, found the police force had a responsibility to identify officers it thought were at risk of suffering psychological harm from their duties, take steps to ensure they were getting treatment and help them return to work safely if they could.
He found that her commander should have organised for the officer's mental health to be fully assessed in 2007 before suggesting she return to frontline duties.
His failure to do so "set in train a sequence of events which exacerbated (her) psychological condition ... until her ultimate medical discharge," the judge said.
Her total loss was calculated as $1.9 million, before reductions for workers compensation payouts already received and the potential she'd have developed depression through other means.
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