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Chuck Eckert
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July 12, 2017
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Commercial Terrorism Insurance

You don’t have to watch the news for long to know that gun violence is a serious problem in the United States. What many people aren’t aware of is that nearly half of all active shooter events occur in a place of business. This alarming statistic should serve as a wake-up call for business owners. Does your business have terrorism insurance in the event of workplace violence?

The SilverLink recently featured a three-part series on workplace violence that covered regulatory and accepted standards, threat assessment and management, and response and recovery strategies. It focused on the employer’s obligation to provide a safe workplace for their employees, and provided tips and resources to help achieve that goal. While employee safety should always be a top priority, it’s also important that employers consider the potential damage to business assets following a workplace violence event. Companies can suffer greatly from business interruption, third-party liability claims, property restoration costs and more. However, terrorism insurance options are available to help minimize these costs and protect the viability of a company.

active-shooter-risk

Taking Cover
Most business insurance policies exclude coverage for terrorism or active shooter events. Typically, general liability, workers’ compensation, business income and business interruption policies have gaps that leave business owners exposed when workplace violence occurs. Business owners have access to limited coverage provided by the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA), which stems from the 9/11 terrorist attacks and provides coverage for certain certified acts of terror. However, affordable insurance options are available that can provide more thorough coverage to help fill these gaps.

Commercial terrorism insurance can provide the following benefits to employers following a workplace violence event:

  • Coverage does not require that an employer be deemed “liable.”*
  • Liability coverage can be included for personal attacks against customers or other third parties.*
  • Policies can cover targeted personal attacks on employees with a clear motive, even when not related to the workplace.**
  • Coverage can be provided for loss of business income if law enforcement or civil authorities determine a business must remain closed for a specified time.
  • Policies can include coverage for counseling / psychiatric costs that are often incurred.**
  • Coverage can be provided for security consulting or increased security that may be needed.*

Commercial policies can also provide property damage coverage, and some policies even provide risk assessments of insured locations and safety seminars to help educate employers and employees.

Commercial vs. Government-Provided Insurance
Even though business owners have access to government-provided insurance through TRIPRA, that coverage differs dramatically when compared to commercial policies. Business owners need to be aware of these differences to avoid a false sense of security. The table at below outlines several key differences between commercial terrorism insurance and TRIPRA coverage.

terrorism-insurance-coverage-options

Commercial terrorism insurance policies not only offer more thorough and inclusive coverage, but they have become much more affordable during the last decade. Since 9/11, the insurance marketplace has adapted and pricing has significantly improved, making this an easier line item to add to the business expense sheet.

Preparation is Key
As with any unexpected loss, the key to a quick and successful recovery is preparation. Business owners can help minimize the negative impact of a workplace violence event by exploring coverage options and customizing policies based on their specific needs. SilverStone Group’s risk management experts can provide independent guidance to help business owners obtain comprehensive coverage that will effectively respond after a violent attack. If you’ve been counting on TRIPRA or have thought commercial insurance was cost prohibitive, it’s time to reevaluate your options and speak with one of our professionals today.

* Currently excluded on most general liability policies
** Currently excluded on most workers’ compensation policies
1 “A Study of Active Shooter Incidents in the United States Between 2000 and 2013.” September 16, 2013.
U.S. Department of Justice Federal Bureau of Investigation. Accessed on March 17, 2017 at www.fbi.gov/file-repository/active-shooter-study-2000-2013-1.pdf

This article originally appeared in the 2017 | ISSUE ONE of the SilverLink magazine under the title “Shots Fired”. To receive a complimentary subscription to the SilverLink magazine, sign up here.

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