What is Active Shooter/Active Assailant Insurance and Should my District Consider it?

By Rob Thompson, CSRM, ARM
Assistant Vice President and Public Entity Practice Group Leader
EHD

The proliferation of intentional violent events perpetrated at public places, including school districts, is both frightening, and saddening.  Unfortunately, these events continue to occur with increasing frequency.  The PASBO safety committee is constantly trying to educate the membership on the issue, and the State of PA has responded with the implementation of Act 44, and the various grants for security upgrades and programs that fall under the Act.  All schools have responded in various ways from the hardening of buildings, to hiring of police.  Everyone is making the best effort to prevent these events at our schools.

Unfortunately, the human and emotional costs of these events are incalculable, but we do know that these events can, and do cause a significant financial impact to the entities they are perpetrated on.    Each event can have both direct and indirect costs associated with it.  Direct costs can include costs for counseling, funeral expenses, property repair; refurbishing or reconstruction, litigation, and increased security measures.  Indirect costs include reputational damage, and increased employee turnover.  Overall the costs associated with these events can easily breach the $1,000,000 mark.  In many cases the data suggests that these events cost tens of millions of dollars.

As these events have continued at schools, churches, businesses and other venues, the insurance industry has developed a specialized policy to help deal with the financial aftermath of a violent event.  Should your district consider adding a specialized policy to deal with these costs?  Does your existing insurance program cover these issues?

Most school insurance programs provide some limited coverage for these types of events, but what is covered and when, are important questions for any business manager to ask.  Most leading insurance programs include a small limit of coverage designed to provide funds to pay for funeral expenses, counseling costs, and sometimes even costs to hire a PR firm to manage the crisis.  What typical school insurance programs won’t include are costs to refurbish a building, and there is growing concern about post event litigation and whether the “standard” general liability policy will respond to defend the insured and pay any damages awarded.  The insurance carrier’s response will be dependent on the allegations made in the complaint.

The applicability of the Political Subdivision Tort Claims Act also plays into the discussion of the value of these policies.  Should an event occur, will governmental immunity be upheld or will the allegations fall within one of the exceptions to governmental immunity?  These are all good questions for your solicitors.

The best way to ensure that your district has the broadest possible coverage available for a tragic violent event is to consider the addition of an active shooter/assailant policy to your insurance and risk management program.  These policies are typically designed to fill the gaps that standard general liability and property programs don’t cover.  They are also designed to be the primary source of liability coverage in the event that an attack happens at your district.  In addition to the insurance response, many programs include an evaluation by a third party security team to understand the school’s current security and response plan and make suggestions for improvement, while providing a crisis coach to turn to help manage the event post crisis.  However, not all policies and program provide the same coverage.  It’s important to evaluate any program you consider as many programs have language that can limit their response to certain events or situations.

The insurance industry constantly evolves to meet the needs of its customers.  As an example, several years ago, many schools didn’t have coverage for cyber liability.  As the risk evolved and schools were increasingly targeted, the industry responded and now many schools do purchase cyber coverage as part of their programs.  I believe that in 5-10 years most schools and/or insurance programs will include some version of active shooter/assailant coverage as a “standard” part of their insurance and risk management programs.

Due to the unpredictable nature of post event litigation and the individualized characteristics of each potential event we would recommend that business managers consider reviewing their existing coverage with their advisors and solicitors to determine if active shooter/assailant coverage should be considered for your district.

About Rob: Rob primarily helps PA public school districts manage their “total cost of risk”. He is a Certified School Risk Manager and is a member of the PASBO Safety Committee. He can be reached at 570-872-7000 or rbthompson@ehd-ins.com

The original article first appeared in the August 2019 PASBO Magazine. Their website can be found here.

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