Facing Litigation, Organizations Buy into Active Shooter Insurance
More lawsuits are being filed against employers after active shooter incidents. According to Claudia Costa, a partner with Gordon Rees Scully Mansukhani LLP, during a presentation at the Professional Liability Underwriting Society’s conference earlier this month, as the number of active shooter events increases dramatically, “more and more lawsuits are being brought against employers” in their wake.
According to a Business Insurance report, “The U.S. Occupational Health and Safety Administration’s general duty clause states employers must have a place free of recognized hazards, and active shooting incidents are considered such a hazard.” Claims filed against employers in these situations include negligence and failure to train workers, Costa says, as well as negligent hiring and retention.
In the 2013 Naval Yard shooting in Washington DC, which left 12 dead, there had been complaints against the shooter from fellow employees, and there had been a prior incident in which the shooter had shot through his ceiling to the apartment of a neighbor. Bullying was cited as a factor in the 2015 San Bernardino shooting.
The lawsuits are making enterprises consider additional insurance coverage specifically for active shooter incidents, including counseling, medical disability expenses for victims, funeral expenses, death benefits and “loss of attraction” coverage (loss of revenue because people are no longer coming to the location of an incident), Business Insurance reports. Other coverages can include the cost of upgrading a building or its security, damages to the building, relocation costs and even the cost of a teardown.
Active shooter incidents are some of the most significant financial exposures organizations face. According to Risk Management magazine, 2007 Virginia Tech shooting produced an estimated $48.2 million in litigation and recovery costs; it cost $50 million to build a new Sandy Hook Elementary School; Broward County spent $1.2 million so far after the 2017 shooting at Fort Lauderdale-Hollywood International Airport to reunite travelers with luggage, replace carpet and tiles and for an assessment of the crisis response.
According to Insurance Business Magazine, active shooter or active assailant insurance is considered gap coverage, and annual premiums cost from $1,800 to $1 million for small school systems and about $175,000 to $20 million in coverage for larger ones.
Risk Management notes that organizations considering active assailant insurance should carefully consider exclusions: some policies do not cover employees – only guests or visitors; policies may have specific casualty thresholds or exclusions for terrorist incidents; vehicle-borne attacks may not be covered; coverage may be confined to firearms and bladed weapons, excluding improvised explosives or other items.
Are you considering active shooter insurance for your school or business? What key factors did you look for? Let us know in the comments below.