Active Shooter Incident Insurance
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Active Shooter Incident Insurance
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The mere mention of Washington State, St. Cloud and Charleston, South Carolina, San Bernardino, California, Houston, Orlando and Colorado Springs blend in with the not too distant past event(s) at Columbine, Blacksburg, Newtown. The names of towns and cities this year have joined the ranks of American mass shooting locations in seemingly increased progression.
Thanks to a nonprofit, nonpartisan project known as the Gun Violence Archive, data on gun incidents is now available well before the federal government releases its statistics.
The Gun Violence Archive is an online archive of gun violence incidents collected from more than 1,500 media, law enforcement, government and commercial sources daily in an effort to provide near-real time data about the results of gun violence.
The data includes shooting incident details broken down by Deaths, Injuries or Mass Shooting (4+ involved) as well as several other categories including Home Invasion or Defensive use.
Disaster Recovery Solution
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The litigation stories that follow these events become readily available to the public adding additional pressure on business and organizations to look to risk management, loss prevention and mitigation techniques.
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• San Bernadino Shooting: Victim’s family seeks $58 million. • Munchbar Shooting: Jury awards $3.7 million to the victim’s estate.
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• Virginia Tech Shootings: Judge approves an $11 million settlement.
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• Washington School Shooting: Girl receives $1.2 million. • Cinemark: Spends $700,000 in defense and wants massacre plaintiffs to pay legal bills.
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A variety of organizations have a duty of care to maintain a safe environment for staff and visitors. In the event of an active shooter attack, they could be liable not only for civil action but regulatory action as well. There are significant challenges to organizations in securing their place of business while managing a vast throughput of people. These organizations are particularly at risk from a lone attacker who could enter a business unchallenged. Despite security measures, by design and necessity these places remain very open places. The reality of the needs of these buildings directly oppose much of what the security measures look to achieve.
Organizations have been successfully sued for negligent security. For example, a student of a university is not able to provide adequate security measures at his dormitory, and so the college has a substantial duty to provide adequate security measures. Similarly, a retail business at a mall, seemingly both the mall and the tenant may have a duty to protect those that shop at the business from foreseeable criminal attacks.
Business Impact Analysis
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While our initial response would assume that the “standard” insurance policies would respond there are plenty of “grey” areas that one should be made aware.
The Commercial General Liability may not respond unless the insured is deemed to be “liable” for the event. Typically, there are stated exclusions in the policy which may include employee as perpetrator, damage to property, business interruption or terrorism. In general, a policy may not include an event triggered, crisis management component which provides precontracted crisis response, including public relations, coverage for victim counseling services and unfortunately, funeral expenses.
Business Income loss is inevitable for retail, restaurant and hospitality type risks and this coverage may not respond unless the event results in actual “damage” to your Building or Contents. The business may need to close solely due to injuries or death. If your business needs to relocate after an attack, your Property policy may not pay unless there was some actual “damage” to your Building or Contents.
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Workers Compensation may not respond to a personal attack on an employee with a clear motive that is not related to the workplace. This cover typically does not cover extra expenses to recruit, replace or train new employees present during an attack who are unable to continue working after the event.
Regarding Terrorism Coverage, the event must generate at least $5 million in Property and Casualty losses and also be deemed “a Certified Terrorist Attack” by the U.S. Secretary of the Treasury, the Attorney General and the U.S. Secretary of Homeland Security. At this time, there has never been an event certified since 9/11/2001 (the Boston Bombings were not certified, and were not covered under TRIPRA).
Most policies do not provide response for an Active Shooter Crisis Event, which includes but is not limited to, event crisis response team, victim counseling or funeral costs for your employees, customers, visitors, students, patients, etc., or any increased security that may be needed after an Active Shooter/ Active Assailant event.