There were 371 mass shootings in the first seven months of 2022—a 36% increase from 2014. Due to this surge in mass shootings, it’s no longer safe to assume your standard business liability coverage adequately protects your company.
As active assailant insurance policies vary wildly between insurers, we have seen substantial shortcomings in policies that leave organizations unprotected in the aftermath of an incident. Policies may exclude gun-related violence entirely or otherwise miss crucial protections for your business.
While researching active assailant incidents, Paul Marshall, Managing Director of McGowan Program Administrators’ Active Assailant/Workplace Violence Division, found that “there are extreme risks and costs to the businesses and victims that occur immediately after an attack. In addition, legal fees, judgments, or settlements may occur years later.”
Important coverage considerations
Organizations must know what to look for when purchasing adequate active assailant insurance. As pioneers of active assailant/workplace violence insurance programs, the experts at MPA have compiled ten key aspects to keep in mind when approaching insurers.
Coverage Definitions
Organizations should ensure their coverage is not limited to merely gunfire. Knives, vehicle attacks, homemade bombs, and other weapons are just as deadly. A comprehensive active assailant insurance policy must account for the following:
- Deadly weapon protection
- Workplace violence
- Active assailant
Primary Coverage
Active assailant incidents require rapid responses to save lives, reduce injuries, and potentially mitigate the severity of damage awards.
In this way, primary coverage serves the same function as an EMT rushing to the scene of an emergency. Providing urgent activation of policies without having to wait for other coverage to be exhausted can make a massive difference for organizations and victims following an incident.
Property Damage
Often active assailant incidents do not merely result in loss of life; they can also cause significant structural damage. For instance, your fire-suppression system may be activated, causing damage to property such as:
- Computers
- Desks
- Carpeting
- Files
- Flooring
- Servers
As a result, companies must not overlook property-damage coverage when searching for active assailant insurance.
Read more: Property Damage Liability: The Cost of Civil Unrest
Business income
Organizations should be aware of policies that link lost business income to physical property damage.
Standard Business policies often require lost profits from property damage before they are triggered. However, businesses that do not incur much property damage are vulnerable to loss of business income, even though there may be significant injuries or loss of life involved.
Third-party liability
While general liability policies may cover an employer and its workforce, they are likely to exclude third parties such as customers, bystanders, or visitors.
This exclusion is a substantial oversight because active assailant insurance must account for the randomness of incidents that often involve third-party victims.
Also read: Combat violence with threat assessments in schools
Coverage triggers
Policies may have certain thresholds for activation that limit whether they pay. They may require at least three or more casualties, or that the casualty count cannot exceed 50 victims.
With these policies, companies will have significant gaps in coverage for small-scale active assailant incidents and large-scale attacks, such as at the Pulse nightclub in Florida in 2016. Having broader coverage with no limits ensures companies do not face crippling lawsuits from a potential incident.
Lawsuit coverage beyond defense costs
Gunshot wounds that cause loss of life or permanent injury may result in six- or seven-figure damage awards. Despite these high costs, many policies only pay the defense costs of a lawsuit.
As a result, organizations are at risk of incurring significant expenses following an active assailant incident and should seek coverage that extends beyond simple defense costs.
Crisis-response coverage
Skilled crisis-response assistance is a must for organizations experiencing an active assailant emergency. Having a team of professionals ready to address the crisis is far superior to speaking with untrained staff over the phone.
Ensure your active assailant insurance covers risk management, media relations, post-event hotlines, counseling, and funerals. It will pay dividends in the case of an incident.
Also read: How active shooter/workplace violence response has evolved in recent decades
Medical/death benefits
Active assailant incidents are incredibly traumatic, often requiring coverage beyond basic medical expenses. Organizations should ensure their active assailant insurance will help people close to the victims, like surviving beneficiaries.
No terrorism exclusion
To activate the Terrorism Risk Insurance Act (TRIA), the U.S. Government must certify an incident as an “act of terrorism.” The complexity of this process may mean companies believe they have coverage when they don’t.
To classify as an “act of terrorism,” an attack must:
- Cause damage in the United States or to U.S. property.
- Cause expected minimum losses of at least $50 million.
- Be an effort to coerce U.S. civilians or the U.S. government.
- Be violent or dangerous to human life, property, or infrastructure.
In truth, the U.S. government has not certified any terrorist attacks on U.S. soil since September 11, 2001. Organizations should not rely on TRIA paying out in most active assailant/workplace violence incidents and instead rely on their insurance to protect them.
Read more: Active Shooter and Terrorism Insurance Coverage
The right active assailant insurance for you
There hasn’t just been a surge in mass shootings in recent years. The cost of active assailant insurance has grown by more than 10% in the United States in 2022. Now more than ever, businesses need to be sure that the policy they decide on is the right fit for them.
Through careful review and analysis, McGowan Program Administrators has found the best ways to address risks while ensuring adequate care for victims and organizations following a mass shooter incident. If you are looking for Active Shooter and Workplace Violence Insurance coverage that meets the unique needs of your business, contact us today.
