By Parker Rains
It’s a disheartening reality that mass shootings have reached record levels in the United States, with the worst mass shooting in U.S. history occurring in June 2016 at a packed Orlando nightclub. In 2016, there were 385 mass shootings total – a marked increase of 40 percent since 2014, according to GunViolenceArchive.org.
As the threat of violence looms, business owners are reviewing their general liability insurance policies and finding that business or property damages caused by an active shooter may not be covered unless the insured is deemed to be “liable” for the event.
Standard coverage may not apply in a crisis. Even personal attacks against customers or other third parties may not be covered with general liability insurance. Additionally, if law enforcement determines your business should remain closed after an incident, your policy may not cover loss of business income.
These events fall into “gray areas” within your general liability insurance policy, because it may not explicitly include nor exclude active shooter incidents, which makes it difficult – if not impossible – for you to make a claim if a mass shooting were to occur. That means your policy may not provide extra expenses to recruit, hire or train new employees needed as a result of staff unable to continue working after such a catastrophic event. It means your business may not qualify for workers’ compensation if the attack on employees was without a clear motive related to the workplace. And it means you may be responsible for paying emergency response teams, victim counseling or funeral costs for your employees, customers or any other third parties involved in the event.
Insurance companies have developed policies to cover instances like those involving an active shooting incident. With premiums starting at $500 and coverage available up to $25 million, active shooter insurance protects businesses from paying out of pocket fees for large settlements, such as the $58 million being sought by a victim’s family from the 2015 San Bernardino shooting at the Inland Regional Center.
Insurance policies can also now cover crisis response teams, victim counseling and funeral expenses – as well as property damages, monetary awards and settlements. With these new insurance policies, businesses often receive a security review and vulnerability assessment to mitigate potential damages.
There are few items to take note of when choosing active shooter insurance:
- Pick a policy which doesn’t have any terrorism exclusions – some policies define terrorism differently.
- Ensure the deadly force and weapon is clearly defined.
- Finally, look to see if crisis management services are made available to your business post-event.
Active shooter insurance eliminates the “gray areas” found in other policies. Many insurance agencies are beginning to offer this type of insurance, and you should speak with your broker if you’re interested in protecting your business from liability in a mass shooting incident.
Parker Rains, based in Nashville, Tenn., is vice president of middle market business insurance firm Fisher Brown Bottrell Insurance, which is a wholly owned subsidiary of Trustmark National Bank, a publicly traded financial services company with over 200 locations and over 3000 associates in Mississippi, Florida, Tennessee, Alabama and Texas. You can reach him at prains@fbbins.com or 615-761-6332, and visit Fisher Brown Bottrell Insurance online at www.fbbins.com.
