Addressing today’s emerging risks.

GJS Re has been analyzing Active Shooter insurance policies since they first appeared on the scene and we can offer advice on both stand-alone coverage as well as bolt-on endorsements. Give us a call!

Violent attacks at educational institutions and places of business & public gatherings are becoming a very disturbing worldwide social behavior, resulting in the loss of lives, serious injury to innocent bystanders, and significant financial loss. Whether these attacks involve firearms, vehicles, knives, or other weapons, the frequency and severity are growing.

The insurance industry began drafting policies to protect educational institutions and business owners from these events more than three years ago.  The insurance products currently offered bear a variety of labels and differ in important ways.  As this coverage has evolved, GJS Re has analyzed each policy and updated our coverage comparisons to help clients navigate the various offerings available in the marketplace.  

Background

The U.S. Secret Service reports that in calendar year 2017, there were 28 incidents of mass attacks that occurred in the United States. The F.B.I. defines a “mass killing” as the killing of three or more people in a public place.  These incidents took place at 31 different locations, resulting in the loss of 147 lives and injury to nearly 700 others (https://www.secretservice.gov/protection/ntac/).  Through May 15, 2018, there have already been 33 active shooting incidents.

Nearly half of all incidents (46%) took place at a business location (bank, restaurant, office, etc.) while 82% involved the use of a firearm. While the motive for these shootings is predominantly a personal grievance of some type, the reality is that workplace violence exposes a business owner to significant financial loss.  The financial impact to the business owner can include business interruption, extra expenses to reopen the business premises, death benefits for employees, loss of customers, property damage, etc. However, the business owner can also incur significant financial costs associated with third party claims, such as defense and indemnity costs, judgments, settlements, etc.

Exposure

Not knowing where or when an Active Shooter might strike, it is important that business owners protect themselves with an insurance policy that best fits their potential financial exposure.

If one follows the aftermath of these shooting tragedies, the net of litigation being cast is quickly widening to include all potential parties who are in any way connected to the shooter: parents, current & former teachers, school administrators, healthcare workers, employers, landlords, security firms, gun manufacturers, and others alleging that not enough was done to prevent the incident, or to protect the victims during the incident.  It is just a matter of time before this litigation also finds insurance agents and brokers for not advising their commercial clients that there is coverage available to cover the cost of these horrific incidents.

Looking at three notable active shooter incidents demonstrates the financial exposure to a business owner.

• 2007 Virginia Tech Shooting – total cost to the University = $48.2 million.
  (Source: Washington Post)
• 2016 Pulse Night Club Shooting – total cost estimated between $385 – $390 million.
  (Source: NPR)
• 2017 Las Vegas Shooting – total cost predicted to reach $600 million.
  (Source: US News)