The number of shootings in the US has continued to escalate with multiple mass casualty events causing a flurry of debate, congressional hearings, and other sensitive issues. With this rise, comes a concern for what happens if the worst-case scenario happens, and your business or property is subject to an active shooter/assailant situation.
The numbers are telling, and it has become an epidemic. Counting the recent shooting in Highland Park there have been over 300 mass shootings since the beginning of 2022, if one takes the definition proposed by the Gun Violence Archive, which is three or more deaths caused by a gunman. Most of these were small but no less traumatizing as the victims and locations differs in every event. (1)
Who needs this type of coverage and what it should cover depends on their location and the type of business or property you own. According to the Department of Homeland Security and the FBI, shooters are most likely to target crowded areas and so-called soft targets. Soft targets are typically ones that are open to the public and limited police presence. According to recent data from the FBI, properties within the following industries are common targets for active shooter incidents:
- Commerce/retail (52.4%)
- Government (4.9%)
- Education (3.3%)
- Religious organizations (1.6%)
- Health care (1.6%)
Apart from these properties, the FBI found that 33.1% of active shooter incidents occur within open spaces, while 4.9% take place at private residences. Regardless of location, however, these incidents can have detrimental effects on impacted parties.(2)
In insurance terms, Active Shooter coverage is a separate coverage and not typically covered by a standard general liability policy. As a rule, most employers have an obligation to protect their employees and safeguard their facilities. As seen with COVID 19, employers should take appropriate precautions to ensure a safe working environment such shutting down the office to prevent the virus from affecting their employees. In the case of workplace shootings, it is the same concept. It is the employer’s responsibility to provide a safe and secure workplace. Having proper safeguards in place is essential to the quiet enjoyment of a workplace or public building. If your employees felt you did not do your due diligence in protecting the office, an employer or building owner can be held liable.(3)
There are many things that an active shooter coverage may cover if the unfortunate happens. Property damage is among the most obvious, as bullets rip through the holes in your business and your equipment. Some of the more common coverages include the following:
- General Liability
- Property Damage
- Business Interruption
- Third Party Liability
- Crisis Management
- Psychological Counseling
- Funeral Expenses
- Risk Assessment and Training
- Medical Expenses
- Monetary compensation for victims
One common concern with a property insurance policy is that many coverages such as business income only trigger if there is property damage. Even if there is property damage, business income coverage ceases once the damage is repaired. In a case like the Pulse Nightclub shooting in Orlando that killed 53 people, it never reopened. The damage was repaired, but losses continued. Without an active shooter policy in place, no business income coverage would be afforded after the physical damage repaired.
In the case of the Virginia Tech shooting, which killed 32 people and injured 32 more there were many issues to consider including burial costs, potential lost income because of students withdrawing along with PR and risk training costs. A potential estimate of $48 million did not include damages and psychological counseling. All of these types of costs are addressed in an active shooter policy. (4)
In most jurisdictions, businesses are not liable for the acts of a criminal party, unless the criminal act was foreseeable. Even so, businesses may face significant risks and liability. In 2019, for example, MGM Resorts International agreed to pay up to $800 million to settle thousands of liability claims stemming from the 2017 mass shooting in Las Vegas and announced that its insurers would contribute up to $751 million toward the settlement.
Many commercial insurers specifically offer active shooter or active assailant coverages. These policies may include coverage for crisis management, victim counseling, medical disability, funeral expenses and death benefits, business interruption, property costs, third-party litigation, and prevention costs to aid businesses in assessing potential risk, training employees, and developing response plans. No reported decision has addressed coverage under such a policy.(5)
More incidents are happening daily and or weekly, and it is a very serious concern. Coverages and needs vary from company to company. Consult your broker to discuss the right risk solution for your business.