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Active Shooter Coverage: What It Entails and Whether Brands Should Consider
Active Shooter Coverage: What It Entails and Whether Brands Should Consider

When a brand isn’t determined to be legally liable for a mass shooting, its options under standard insurance are limited, potentially leaving them exposed.

The FBI defines an active shooter as “an individual or individuals actively engaged in killing or attempting to kill people in a populated area.” Under these parameters, the agency reported there were 30 active shootings in 2017. The FBI also defines mass killings as single incidents with four or more fatalities.

While an all-encompassing official definition of ‘mass shooting’ does not exist, these definitions served as a guide for independent research and data group Gun Violence Archive's definition of a mass shooting: a single incident where four or more people are shot or killed. Based purely on that numerical threshold, the group’s data indicates there were 346 mass shootings in 2017.

Amid the tragedy of these events, their financial implications for the schools, theaters, concert venues, churches, stores and other public places involved can get buried, despite their seriousness. “Statistics like these raise some important questions for companies, especially retail businesses that operate in public spaces,” EZ CERT President Doug Groves said, “most important being, what is your duty to protect customers on your premises?”

Most businesses are already equipped with general liability and workers compensation insurance, Groves explained. “General liability only comes into play when a business is deemed liable for an event, such as someone slipping on water on the floor of your establishment. The problem, as this pertains to active shooters, is there’s a chance you're not legally liable for someone coming to your place of business and firing a weapon,” he added.

The same thing can be said for workers compensation, which only comes into play when an employee is injured at work through their work duty. “When someone is injured in a shooting, that has nothing to do with the act of working,” Groves pointed out. Ashley Ganne, brokerage director at Burns & Wilcox, also noted that workers compensation insurance varies by state and typically excludes property damage and any injuries to a third party, like customers. These policies also don’t necessarily cover the cost of hiring new employees that are needed to take the place of employees who can't work after a mass shooting, Small Biz Daily noted.

“Companies may not be aware of the gaps in their coverage and there’s no telling how big some of these claims would be, which could prove extremely tough for a business to withstand,” Groves said.

To fill these gaps as mass shootings have become more prevalent, the market has responded to the limitation of general liability and workers comp coverage with active shooter coverage, which Groves noted has risen in visibility over the last five to ten years. “Standalone active shooter coverage includes things like emergency response team costs, crisis management in the form of counseling services and funeral expenses, property damage, business interruption expenses, and settlements,” he said.

When selecting an active shooter insurance policy, businesses must be sure to thoroughly understand how each defines terrorism, deadly force, weaponry and the types of crisis management that is included in order to ensure they are receiving the protection they are seeking, Small Biz Daily cautioned. Though numbers vary by policy, coverage is available up to about $20 million, according to the Wall Street Journal.

With these new insurance policies, businesses often receive a security review and vulnerability assessment to mitigate potential damages. “EZ CERT does a lot of work with franchises and when I look at a restaurant chain with 150 units, I now see 150 chances where a catastrophe can happen,” Groves said. “We are advising our customers by making it known there are gaps in these existing policies that leave them open to serious vulnerability. We want them to be aware that the option for active shooter coverage is out there and that we can send someone to assess their premises to provide feedback and give you a quote.”

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