If you are on any insurance e-mail lists like I am, and likely even if you aren’t, you probably have seen or come across information on insurance for active shooter events. Given today’s climate on gun control advocacy, whatever your politics are, understanding the insurance coverage for such events is critical. Initially, upon seeing information on exclusive insurance products for active shooter events, my thought was this is a good idea and makes a lot of sense; however, after further contemplation, I started questioning the benefit of this coverage.
Commercial general liability policies provide liability coverage for bodily injury and property damage claims arising from an insured’s negligence. Unless a particular cause of loss is specifically excluded on the policy, it is deemed to be covered, even if a policy is silent on the matter. For example, liability arising from war, nuclear activity or pollution are often excluded causes of loss on general liability policies. On the other hand, I can’t recall a single time in recent memory that I came across an exclusion for active shooter events. Thus, it is extremely rare to come across standard general liability policies that contain a specific exclusion for an active shooter. Given that reality, liability arising from such events should be covered and a separate policy specifically addressing this exposure would be superfluous and unnecessary.
Having said that, there are two important caveats to that as well as one benefit to the active shooter coverage that is generally not afforded on standard general liability policies. First, the two caveats… I can envision two coverage forms on a general liability policy that may restrict or completely preclude one’s ability to recover damages from an active shooter event. If a policy contains an exclusion for assault and battery, which are rare, but not completely uncommon in certain industries, that exclusion will likely be invoked by a carrier at the time of a loss from an active shooter event. Secondly, a policy that does not include terrorism coverage, can impact coverage in an active shooter scenario. In today’s world with religious fanatics committing extreme acts of violence in the name of religion, such scenarios can be declared acts of terrorism and if a general liability policy were to exclude terrorism coverage, an insured would be left without insurance protection. As an aside, I often encounter clients and insureds reluctant to include terrorism coverage on general liability policies as they don’t see a reason for it. They often don’t believe that their employees are capable of committing such acts of terror and even if they are correct in their judgement, they are neglecting the potential of a non-employee coming on premises and committing an act of “terror.”
All is not negative about active shooter coverage. There are a number of ancillary coverages provided on such policies that may not be available on standard policies and can be of benefit to an insured. Some of those coverages include: crisis management services, post-event counseling services, business interruption (although I am seeing property carriers starting to include this on their policies with sub-limits), public relations, etc. If some of these ancillary coverages are of importance to an organization, it may be worthwhile for them to investigate the coverage further. Keep in mind, however, that the “other insurance” clause on policies may come into conflict with this policy and would need to be addressed in order to avoid unnecessary and avoidable complications at the time of a loss.