October 30, 2019

Active Shooter – the New Cyber

Much as cybercrime exploded worldwide to staggering impact, workplace violence in the form of active shooter incidents has now emerged as a threat that cannot be ignored or minimized. Although it’s a difficult subject, it is important for businesses to consider active shooter/workplace violence insurance to cover gaps and grey areas that exist in standard coverage insurance. Here’s why.

According to data from the Gun Violence Archive (GVA), which compiles data from shooting incidents, America is averaging almost one mass shooting a day. GVA considers a mass shooting any incident in which a gunman shoots or kills four or more people in the same general time and location. It recorded 337 mass shootings in 2018 and as of the date of this article, 25 in 2019.  

FBI data surveying a period of 18 years shows that casualties from active shooter incidents have increased from one in 2000 to 27 in 2018, a total of 2,430 killed and wounded in that 18-year period. Incidents are most common in educational settings (21%) and commercial enterprises open to pedestrian traffic (44%). Retailers and offices open to the public are at the highest risk of an active shooting and liability for both civil and regulatory action.

As these numbers continue to increase at a stunning rate, businesses and organizations have begun to consider that their risk management program must include ensuring a safe environment for staff and visitors. Additionally, mitigating the risk of a violent incident of this magnitude would not have been imagined just a few years ago.

Active Shooter and Workplace Violence Insurance

Understandably, as this new class of risk has emerged, there is a misconception that a general liability insurance policy covers an active shooter event. The reality is that standard coverage – even terrorism insurance – cannot be depended on to respond to active shooter situations.

Many incident-generated expenses can be anticipated but many are often unexpected. Independent crisis management and security, employee counseling, public relations, salaries for victim employees and replacement employees, and medical care and/or rest and rehabilitation for employees – these are often unforeseen.

Today, there are a number of underwriters offering active shooter or workplace violence insurance. There may be some differentiation between active shooter and workplace violence programs and providers; for example, you will want to compare triggering events, third-party liability coverage, first-party coverage for losses, as well as expenses and post-event services.

In addition to premium cost, consider the following when deciding what is best for your business:

  • Limit Amount
  • Claims Expense Coverage (damages, monetary awards, settlements)
  • Crisis Response Service
  • Funeral Expense Reimbursement
  • Security Review Audit & Vulnerability Testing

Additionally, carefully read the policy to determine if there is anything that may restrict coverage. Some of the common issues are related to:

  • Coverage Triggers – For instance, the policy could require a specific number of casualties before it will kick in.
  • Terrorism – The best protection is for the policy to NOT exclude terrorism.
  • Weapons – Make sure the firearms or deadly weapons definition is clear and understandable as to the type of weapons covered.

Crisis Management Services

One thing to pay specific attention to in relation to crisis management services is any policy wording that states prior approval or review is required. Because post-incident crisis management is a crucial step in protecting the organization’s reputation and mitigating future claims, make sure the company can respond immediately. Approval language may cause a delay in response.

Additional items that should be clearly defined and provided for by your coverage include:

  • Investigation – Conduct an independent investigation into the active shooter event. The results can help drive crisis response planning as well as identify possible third-party liability exposures.
  • Crisis Management Support – Provide advice and support on managing the issue, including a response hotline, crisis counseling, public relations and other crisis communications.
  • Temporary Security Measures – If needed, arrange for armed or unarmed security personnel to enhance security.

Risk Management – Not Solely Insurance

Heightened security concerns have focused significant attention on crisis response plans, and more firms now have plans in place for cyber crime, terrorism, bomb threats, fires and natural disasters than at any point in modern history. Conspicuous by its absence from many of these plans is a workplace violence response plan.

A true insurance partner will provide value-added risk management services such as a security review. This should include a risk assessment to identify any security gaps followed up with a risk management plan to address those gaps. The risk advisor should also have a variety of resources available to help prevent and mitigate risk instances, as well as to help educate and train personnel.

Additional Resources:

Seven Steps to Implementing a Workplace Violence Response Plan, LPM Insider.

Active Shooter Emergency Action Plan Guide and Template, Homeland Security.

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