Active assailants continue to threaten businesses, houses of worship, schools and public events across the United States.
Reported instances of workplace violence, ranging from threats to physical assaults and homicides, impact nearly 2 million Americans each year (source). In addition to injuries and emotional trauma, violent incidents may inflict lasting damage on a business or organization. The location may be shut down for days or weeks; employees may struggle with the psychological impact, and customers may shun a place where an attack has occurred.
Active assailant or workplace violence coverage can help clients to address the risk of violent incidents beforehand and to provide a more effective response for the people impacted — and the organization — should one occur.
Violence is all too common in the workplace and at public venues. The most terrifying instances involve active assailants, intent on harming co-workers or random people.
Source: Active Shooter Incidents in the United States in 2016
and 2017, Federal Bureau of Investigation, April 2018.
Among instances in 2018, a gunman killed 12 people at a Los Angeles area bar in November; five people were killed in a Maryland newsroom in June; in October 11 people were killed at a Pennsylvania synagogue; and 17 students and teachers died in a shooting at a Florida school in February.
While acts of violence may be seemingly random, employers still have a duty to provide a safe workplace under the Occupational Safety and Health Act. Those that fail to prevent or abate a recognized violence hazard can be cited. Employees and their families may also turn to the courts seeking compensation, although Workers Compensation laws may limit those actions somewhat. Active assailant or workplace violence coverage can help protect an organization financially.
The insurance options available in the marketplace may be difficult to navigate, given that the standalone, or monoline, products are relatively new. Further, there may be confusion about where one coverage ends and another begins. An existing property policy may not provide the business interruption coverage an insured might expect if certain physical damage triggers are not met. While a general liability policy may provide medical coverage for non-employees, the necessary scope of coverage for employees and non-employees may not be available.
Active assailant or workplace violence policies are intended to provide more comprehensive coverage for the wide ranging exposures associated with such an event, with limits available up to and above $20 million. In addition, active assailant or workplace violence policies may provide a number of coverage extensions that are unique to these policy forms, such as post event forensic costs, and crisis management consultants.
Newer, non-standardized, insurance products can be confusing. Workplace violence coverage, both as a standalone policy or as an endorsement, is usually associated with management liability coverage and may focus less on property damage than the extra expense coverage providing balance sheet protection. Active assailant coverage, as a standalone policy or via endorsement, is more often sold alongside property policies and may be available from different insurers in the market.
Some potential buyers may expect their traditional Terrorism policy to respond to an active assailant or workplace violence situation. Terrorism remains a real threat, but policies designed to cover terrorist attacks generally require the event to be classified by the federal government as a terrorist attack with property damage in the millions of dollars. Stand-alone workplace violence and active assailant policies provide coverage for terrorist-like acts without the need for federal certification or the dollar threshold for property damage.
Potential buyers should always review a policy in its entirety, and workplace violence and active assailant policies are no exception. There may be certain exclusions that impact coverage; for example, the use of a vehicle or an explosive device may bar coverage. Also, most policies will not cover robberies or gang related incidents. In addition, insureds should consider broadening the scope of the individuals covered, as the policy wording might not address guests, volunteers, students and patrons who may be impacted by a covered event.
HIGH RISK INDUSTRIES
Some industries are more at risk. Violence is the third-leading cause of death for workers in the healthcare, education, law and media industries, according to the National Safety Council. Workplace violence-related deaths are particularly common in retail, leisure and hospitality, and transportation as well. The shooting deaths of 59 people at a Las Vegas music festival dramatically underscore the risks for concert venues.
The current market conditions for insureds are favorable as it relates to premiums. These policies or endorsements are generally considered fairly inexpensive. However, it is important to note that underwriters will contemplate the extensions of coverage, scope of the policy, and risk profile of the insured in the underwriting and rating of the risk. Premiums will rise depending on how comprehensive the coverage is and what the risks are for the specific organization, whether it be educational institutions, houses of worship, restaurants or concert venues, for instance. Organizations should seek the coverage that best matches their specific exposures and needs.
While some clients may be at a greater risk, any organization can be a target. Talk to your clients about how these coverages can help them manage this widespread threat, help them understand how active assailant or workplace violence coverage differs from their existing coverages, and ensure they are covered should a tragic event happen at their business.
Daniel Lazarz is an ExecPro broker with CRC based in the Dallas, TX (Tollway) office.
Paul Martin is a Property broker with CRC based in the Birmingham, AL office.