By Melissa Steward, Western MM, and Lorie Dorsey, CUO
From San Bernardino, California, to Ft. Hood, Texas, to Newtown, Connecticut, tragic shooting incidents have no geographic boundaries and no rational motives. And businesses and property owners across the country should be aware that most of these incidents occur in commercial or educational environments. Knowing that, some primary considerations include:
- How will this situation impact my organization should it occur at my place of business?
- What if innocent bystanders, customers and clientele are injured?
- How will my insurance company respond to the crisis and the aftermath?
- Will my business and its reputation survive such a tragedy?
By understanding and planning for these unexpected scenarios, business owners can keep their business protected if the worst should happen. Read on to learn more.
The active shooter threat
“Active shooter” is a term used by law enforcement to describe a situation in which:
- A shooting is in progress, and;
- An aspect of the crime may affect the protocols used in responding to and reacting at the scene of the incident.
Unlike a “defined crime,” such as a murder or mass homicide, the active nature of these events implies that both law enforcement and citizens have the potential to affect the outcome of the situation based on their responses.
With advance planning, there are ways to help mitigate the impact from an active shooter event. One is to develop an emergency action plan, which can help protect customers and employees at companies of all sizes. The Emergency Management Institute of the U.S. Federal Management Agency offers interactive web-based courses and valuable materials for preparedness training2. Other components of an action plan include:
- Establishing two emergency evacuation routes and posting them in clearly marked locations;
- Developing a process to communicate with employees and customers after an evacuation;
- Placing removable floor plans near entrances and exits as a reference for emergency responders;
- Ensuring that the commercial building is accessible for individuals with disabilities and in compliance with Americans with Disabilities Act requirements;
- Ensuring that emergency action plans and evacuation instructions address individuals with access and functional needs;
- Creating a clear strategy for how employees will communicate with each other, customers, security and law enforcement;
- Conducting active shooter training exercises to prepare employees to react to an active shooter scenario and other emergencies;
- Coordinating with local law enforcement, emergency responders, SWAT teams, canine teams and bomb squads in conducting exercises;
- Performing effective background checks for new employees; and
- Creating a system to report potentially violent behavior.
Coverage for active shooter events
In addition to having a detailed emergency action plan, business and property owners can minimize the impact of an active shooter event through proper insurance protection.
Currently, only one carrier (Willis) offers active shooter insurance, with a maximum liability limit of $5 million, through an affiliate of Lloyd’s of London1. Active shooter insurance covers the liability that companies or institutions have if it is found they have not taken the needed precautions to prevent violent rampages. It also covers the on-the-scene costs of a shooting incident, as well as the expense of counseling or consulting needed after a tragic event.
Fortunately, workers’ compensation insurance policies at Westfield Insurance have long covered the medical costs of employees injured at their workplace. In most states and in most cases, these policies traditionally cover individuals shot on the job, whether it was an accident or part of a premeditated mass shooting. That is true even if the company itself isn’t found to be liable, although, there are exceptions that may apply in some jurisdictions, such as:
- Targeted personal attacks on an employee with a clear motive unrelated to the workplace – for example, an attack by a spouse;
- Negligence, reckless behavior or intentional acts by employers that could expose them to additional civil litigation under employer liability laws – for example, failure to respond to a specific threat prior to an incident.
From a general liability standpoint, if a customer, student or other third party is injured or killed in a shooting on an insured’s premises, a commercial general liability (CGL) policy may respond to provide coverage for medical care, bodily injury, property damage and defense of lawsuits alleging negligence. Coverage will depend on whether the insured is deemed legally liable for the event. Umbrella or excess liability policy coverage may also kick in, depending upon the size of a loss. Many excess policies contain crisis response endorsements which provide, among other things, expenses for crisis management and public relations assistance, funerals, grief counseling and travel.
Finally, Property and Business Interruption losses may be triggered due to damage to physical property or the closure of the business during/after the investigation.
Societal changes will always bring new concerns about shooter threats, but being prepared will provide some peace of mind if those concerns become reality.
Discuss your coverage options
If you have questions or would like more information about how your current policy or policies will cover an active shooter incident, contact your local Westfield independent insurance agent. Your agent can review your coverage and advise you of any new industry coverages that may better protect your employees and your business.