Over the last several years, there has been a rise in the need for active shooter or incident coverage for various industries ranging from healthcare to retail. What these policies cover and what people should be looking for can be overwhelming.
Paul Marshall, Managing Director of McGowan Companies Active Shooter/Workplace Violence Insurance Programs, breaks down important information to understand differences in coverages.
Active Shooter / Deadly Weapon / Active Assailant / Workplace Violence vs. Terrorism insurance policy?
Unfortunately, these threats and other acts of mass violence are ever-present. Whether impacted directly or indirectly, when these acts do occur, they can significantly impact a company’s property, employees, and ability to trade.
Insurance can play a role in mitigating the fallout from these malicious events. The standard policies available for businesses are Active Shooter / Active Assailant / Workplace Violence and Terrorism insurance.
We can typically group Active Shooter / Active Assailant / Workplace violence policies into one group and Terrorism into the other due to similarities.
The purpose of each type of policy
Standalone terrorism & sabotage policies have been common since the 9/11 terrorist attacks. Their primary purpose is to protect a company’s assets and income in the event their business is the target of – or impacted by – an act of terrorism.
While similar in some respects, Active Shooter / Active Assailant insurance has emerged in recent years to offer coverage for malicious incidents not designated as acts of terror. It focuses on incident response costs, victim coverages, business interruption, and potential legal liabilities. Workplace Violence can be added to this group, as well.
Defining an act of terrorism, sabotage, or active assailant attack
In short, an act of terrorism or sabotage is a violent or subversive act committed for political, religious, ideological or similar purposes.
Alternatively, an active assailant event is considered any physical attack intended to kill or cause bodily harm, including attacks using any handheld weapon, explosive device, acid, or vehicle.
Active Shooter / Deadly Weapon / Active assailant / Workplace Violence events aren’t restricted to political, religious, or ideological events.
Coverages: terrorism and sabotage vs. active assailant
The difference in cover between a terrorism & sabotage insurance policy and an active assailant insurance policy largely comes down to the likely impact of each type of event.
or instance, a traditional terrorism & sabotage insurance policy will focus primarily on property damage and business interruption cover. The assumption is that an act of terror will most likely cause damage to a business’s assets or property or impact their ability to trade for a sustained period.
It has a narrower scope of what events will trigger the policy. Still, it allows for more in-depth protection of the insured’s assets and income, reflecting the more significant loss from physical damage that can occur in a traditional terrorism event.
A good policy will offer sub limited cover for the restriction of access to premises and contingent business interruption and utilities, cover to help protect the business if an attack impacts its trading partners or critical services.
In the case of an active assailant/workplace violence/active shooter event, the cover is designed to respond to a much broader definition of events. Still, it offers more limited cover for property damage and business interruption.
Instead, workplace violence/active assailant insurance products assume the primary impact of an attack on the victims, customers, and employees. It is designed to provide cover for victim and organization support costs and crisis management costs, as well as the insured’s legal liabilities. Loss of attraction can also be included within the provided business interruption cover to help the insured recover from any prolonged impact to revenue.
What does McGowan offer?
McGowan Program Administrator is one of the largest underwriters of these Crisis Risk related policies in the United States.
For the last five years, we have quoted thousands of risks. We are one of the first insurance providers to offer Workplace Violence / Active Shooter/Active Assailant/Workplace Violence type coverage.