Article written by Robert Crosby, Executive Director of Independent Insurance Agents of San Antonio
It seems that every week we hear of another incident of violence in our society. Most recently, the shooting at the First Baptist Church in Sutherland Springs, Texas, reminded us that no place is safe from acts of violence. The frequency of these incidents seems to be increasing and the statistics are frightening and sobering.
According to the Bureau of Labor Statistics, workplace violence is the second leading cause of death in the workplace. This can be one of the most frightening exposures for a company and just one incident can threaten the very survival of the company. The FBI reports that from 2000 and 2015 the number of annual active shooter incidents increased by 2000 percent. With these types of statistics, business owners must consider the ramifications of an incident in their place of business.
According to CHUBB Insurance, there are several factors to consider when you are deciding whether or not to add workplace violence expense insurance coverage to your insurance portfolio. Expenses incurred in the aftermath of a workplace violence incident are often staggering and unforeseen. These expenses can include crisis management, independent security, employee counseling, public relations, and salaries for victim employees and for replacement employees, medical care, and rest & rehabilitation for employees.
Additionally, loss of business income is a very real concern. Many business owners may believe that they have adequate insurance coverage with their General Liability insurance policy. However, Commercial General Liability may only respond if the business is considered legally liable for the incident. Business Interruption coverage will only respond if there is damage to your building. If you have to close your doors for a period of time while your staff recovers emotionally or physically, you may not be able to rely on Business Interruption coverage as a source of income replacement while your doors are shut. Workmen’s Compensation coverage very possibly will not cover a non-job-related injury in the workplace. The expenses to add temporary or new permanent employees is another non-covered expense.
Terrorism Coverage only covers events that generate at least $5 million in Property and Casualty losses and a terrorist attack certified by the U.S. Secretary of the Treasury, the Attorney General and the U.S. Secretary of Homeland Security. The September 11 attacks are the only incidents to date that meet those parameters. Most policies do not provide coverage event crisis response teams, victim counseling or funeral costs for employees, customers, visitors, and others.
Every business should consider assessing the risks that their specific type of business may have but there are certain businesses that have an increased risk of violence. Any company that deals with the public, exchanges money, delivers goods and services, works with unstable or violent persons, operates at night, or plans to reduce their workforce with layoffs or outsourcing of operations have an increased chance of a violent incident.
There are policies in place through various carriers that provide for coverage in areas of third-party liability, crisis mental health specialists, independent forensic analysis's, funeral expenses, public relations, victim employees’ salaries and replacement employees’ salaries, informant rewards, risk assessment and response training and business interruption just to name a few.
A comprehensive risk assessment of your specific business is critical as coverages can vary widely. Some policies have limitations depending on employee size, types of weapons and other incident specific particulars.
So where do you start? – take time to review your current coverages with your independent insurance agent and have your agent do a complete assessment of your company’s hiring and training practices, and workplace protection policies.
Recovery from any workplace violence incident is very difficult. The better prepared a company is the more quickly the recovery process becomes and a return to normal operations is more successfully accomplished.