Buyers Guide to the Emerging – Active Shooter / Workplace Violence Insurance Protection

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Firestorm Chief Intelligence Officer Karen Masullo recently had the opportunity to interview Paul Marshall, Managing Director of McGowan Program Administrators Active Shooter Insurance Program. Paul provides an Active Shooter Insurance Program Buyer (beware) Guide for Business and School Professionals through this Q&A interview.

Paul Marshall, McGowan Program Administrators

Paul R. Marshall has almost 25 years of insurance and risk management experience, beginning with retail agency sales and moving into underwriting, claims and program management.

Since joining McGowan Programs Administrators, Marshall has developed several new innovative underwriting facilities and has been named one of the Top influencers, innovators and games-changers in America’s insurance industry by Insurance Business America Magazine.

Paul Marshall’s most recent market innovations, was highlighted in recent IBA article as the “Next Cyber” is Active Shooter Insurance Protection. There are significant challenges to securing places of business, particularly ones where visitors who “come and go” frequently. These organizations are particularly susceptible to “lone attackers” who can enter buildings unchallenged.

The increase of mass shooting threats along with the ensuing litigation has created public awareness, need and demand for this new line of coverage.  Marshall’s program fills this need and provides 3rd Party Liability, Property and Business Interruption coverage. This program offers crisis response services and is offered to any class of business.

Masullo: Thanks for the time today Paul. Can you tell us a little about The McGowan Companies to get us started?

Paul Marshall: Founded more than half a century ago, McGowan Program Administrators (MPA) is America’s leading writer of innovative insurance programs.   MPA is a Managing General Underwriter and Program Manager. MPA designs, administers and markets highly-specialized programs of insurance. These programs are available exclusively through MPA. They are offered on “A” Rated, Admitted Paper and are available in all 50 states.  For the past 6 decades, we have dedicated ourselves to program business.  Our philosophy has always been to deliver products and allow them to distinguish themselves from their competition, from both a pricing and coverage perspective.  We currently manage insurance programs that include coverage for Senior Care, Community Associations, Restaurants, Hospitality, Municipalities, Amusement Parks, School Systems and the Active Shooter / Workplace Violence Insurance Protection program.

Masullo: We’ve had several conversations regarding the growing threat of school and workplace violence and active shooter incidents. What is your perspective?

Paul Marshall: The mere mention of Washington State, St Cloud, South Carolina, Houston, Charleston, Orlando, Colorado Springs, San Bernardino, blend in with the not too distant past event(s) at Columbine, Blacksburg, Newtown. The names of towns and cities this year have joined the ranks of American mass shooting locations in seemingly increased progression.

Thanks to a nonprofit, nonpartisan project known as the Gun Violence Archive, data on gun incidents is now available well before the federal government releases its statistics. The Gun Violence Archive is an online archive of gun violence incidents collected from over 2,000 media, law enforcement, government and commercial sources daily to provide near-real time data about the results of gun violence.

The numbers as of December 12th, 2016, are a bit staggering with record–high mass shootings reaching 366 so far, this year, surpassing the total 333 mass shootings in 2015, and representing a significant increase over the 227 recorded events in 2014.  The details are just as concerning when you consider total gun-related incidents of 54,412, an average of over 4,500 events per month. By the time this interview is published, the numbers are likely to be outdated just as quickly.

Masullo: this leads us to Active Shooter / Workplace Violence Insurance Protection. Is this a relatively new offering or is it well-known?

Paul Marshall: Business and school professionals don’t have to look very hard to find insurance-focused, risk management related articles regarding Active Shooter or Deadly Weapon protection. Recent examples of the subject appeared in various high-profile Insurance journals, including IRL.

The mainstream media is also increasing its awareness of Deadly Weapon and Active Shooter Insurance associated with these types of reporting events:

  • CBS News – Mass shootings have insurers going on offense
  • Fortune Mag – Mass Shootings Convince Companies to Explore ‘Active Shooter’ Insurance
  • CNBC – Interest in active shooter insurance grows

Masullo: Do the litigation stories that follow these events add additional pressure on businesses and organizations to look to risk management, loss prevention for mitigation techniques?

Paul Marshall: We’ve read headlines such as in the San Bernardino Shooting case, the victim’s family seeking $58 million, or jury awards such as $3.7 million to estate of Munch bar shooting victim, a Washington girl receiving $1.2 million in a school shooting settlement, and Cinemark spending $700,000 in defense and seeking legal bill recompense from massacre plaintiffs.

A variety of organizations have a duty of care to maintain a safe environment for staff and visitors.  In the event of an active shooter attack, they could be liable not only for civil action but regulatory action as well.  There are significant challenges to organizations in securing their place of business while managing a vast throughput of people. These organizations are particularly at risk from a lone attacker who could enter a business unchallenged. Despite security measures, by design and necessity they remain very open places. They reality of the needs of these buildings directly oppose much of what the security measures look to achieve.

Organizations have been successfully sued for negligent security. For example, a student or staff of a university is not able to provide adequate security measures at the campus or dormitory, and so the college has a substantial duty to provide adequate security measures. Similarly, a retail business at a mall, seemingly both the mall and the tenant may have a duty to protect employees and those that shop at the business from foreseeable criminal attacks.

Masullo: Isn’t Standard Coverage the answer?

Paul Marshall: While our initial response would assume that the “standard” insurance policies would respond there are plenty of “gray” of which to be aware:

Commercial General Liability may not respond unless the insured is deemed to be “liable” for the event. Typically, there are stated exclusions in the policy which may include employee as perpetrator, damage to property, business interruption, or terrorism. In general, a policy may not include an event triggered crisis management component which provides pre-contracted crisis response including crisis communication, coverage for victim counseling services and unfortunately, funeral expenses.

Business Income loss is inevitable for retail, restaurant and hospitality type risks and this coverage may not respond unless the event results in actual “damage” to a Building or Contents.  The business may need to close solely due to injuries or death.  If a business needs to relocate after an attack, the Property policy may not pay unless there was some actual “damage” to the Building or Contents.

Workers Compensation may not respond to a personal attack on an employee with a clear motive that is not related to the workplace.  This cover typically does not cover extra expenses to recruit, replace or train new employees present during an attack who are unable to continue working after the event.

Regarding Terrorism Coverage, the event must generate at least $5 million in Property and Casualty losses and be deemed “a Certified Terrorist Attack” by the U.S. Secretary of the Treasury, the Attorney General and the U.S. Secretary of Homeland Security. To-date, there has been no event certified since 9/11/2001 (the Boston Bombings were not certified, and were not covered under TRIPRA).

Most policies do not provide response for an Active Shooter Crisis Event which includes but is not limited to an event crisis response team, victim counseling or funeral costs for employees, customers, visitors, students, patients, etc. or any increased security that may be needed after an Active Shooter event.

Masullo: So what are Active Shooter and Deadly Weapon Insurance coverage basics?Paul Marshall McGowan Award

Paul Marshall: Most Active Shooter insurance programs available on the market today provide Primary Third Party Liability and Business Interruption with limits up to $25 million per event.  Some will include crisis response services, victim counseling services and pay for funeral expenses. The underwriting is by class and location of risk and exposures that would include number of employees, patrons, visitors etc.

The Active Shooter insurance programs are marketed under various brand names such as: Active Shooter Protection, Deadly Weapon Protection, Workplace Violence, Active Assailant, Threat Protect, with some targeting a specific Risk Industry such as Healthcare / Education / Government and some having the ability to quote virtually anything from Rodeos to Roller Rinks to Political National Conventions.

Some Examples of Risk and Pricing would be:

  • University with 10,000 Employees. 50,000 Student Premium $69,500 for $5m limit.
  • Annual event taking place over 2 weeks with 1.1M visitors 1.1m. Premium $65,500 for $5m limit.
  • Retail store with 500 locations throughout US. Premium $145,500 for $5m limit
  • High school with 12 Employees and 165 students.  Premium $3,000 for $1m limit
  • Hotel in NJ with 180 Employees, 320 Rooms. Premium $6,500 for $1m limit.


Masullo: What are some key findings and comparisons regarding this coverage that your team has surfaced?

Paul Marshall: For key coverage comparisons or “the good, the bad and the ugly” aka Buyers Beware, the below list represents a broad overview. Also, policy wordings on the market could present possible coverage gap issues if not explained or understood correctly.

We start with the Liability Coverage Form and Claim Expenses versus Liability Expenses. This is a basic item. We want to make sure the Policy will cover claim expenses, including: Damages, Monetary Awards, and Settlements.

Buyers beware…There are policies out on the market that include liability expenses only.

Next, look closely at Coverage Triggers or the Definition of Event. Most event definitions are similar; “Act of potentially deadly force involving the use of a Weapon on the Premises” or “Threat of deadly force involving the display of a Weapon on the Premises.”

Buyers beware… some policies require specific number of casualties or persons affected such as three (3) or more persons or under 50 persons.

Masullo:  How about Terrorism exclusions?

Paul Marshall: I would prefer that the policy does not contain any Terrorism exclusions.

Buyers beware… Policies will define Terrorism differently.  Some use wording like: “threat of any person, committed for political, religious, ideological or similar purposes including the intention to put the public, or any section of the public, in fear.” Others define an act of Terrorism as an event with Fifty or more persons sustaining death or serious physical injury.

Again, I would suggest the policy does not contain Terrorism exclusion.

Masullo: What is the Definition of Firearm or Deadly Weapon in this context?

Paul Marshall: With the recent Mall stabbings, France truck attacks and NJ /NYC pressure cooker bombs we need to understand what a policy defines as a Deadly Weapon.  Some policies are broad in definition such as, “an instrument or explosive device which is specifically intended to be used for and used to injure, kill or incapacitate a person.”  Then there are some policies that are very specific: “Deadly weapon means any firearm (whether loaded or unloaded), explosive device, knife, syringe, medical instrument, liquid acid and or any other device or instrument which has been designed, made and constructed to be a weapon capable of producing death or bodily injury by the manner in which it is used or intended to be used.”

Buyers beware… make sure you understand what type of weapon is covered.

Masullo: What is Primary or Excess Clause wording?

Paul Marshall: As we review the “Other Insurance Clause” we want this policy to be primary and want to see policy wording such as, “This policy will act as primary insurance to any other insurance carried by or available to the Named insured.”  But again, there is a Buyer beware… some policy wording names the policy as excess, “If any loss under this Coverage Part is insured under any other valid and collectible insurance policy, this Coverage Part shall be excess of and shall not contribute with such other insurance.”   Again, understand exactly what is being purchased.

Masullo:  At Firestorm, we partner to provide Post Event, Pre-Contracted Crisis Management Services. Do all policies offer this benefit?

Paul Marshall: Many of these policies do offer some type of Event Crisis Management services that provide coverage for specific post-Active Shooter event services such as the provision of a Crisis Coach or Public Relations consultant.   Post-event support and Crisis Communications management is critical to manage the situation and protect an organization’s reputation while mitigating any future claims.

Buyer beware… some of the polices require prior review and approval before any of these Fees and Expenses are incurred “with the prior authorization of the Company”; any other reasonable fees and expenses incurred by the Named Insured or Insured Person(s) with the prior approval of the Company.  I feel this has a potential for delaying the response as most of these events do not happening during regular business working hours but rather on holidays, weekends and evenings.

I strongly encourage the program to include pre-contracted Crisis Management Services that are clearly defined and spelled out in the policy.

These services should be available directly to the insured, 24/7/365 and immediately after an Active Shooter Event with a dedicated crisis hotline.  If properly worded, the insured will have guaranteed access to the Crisis Management Response Team in the event of an Active Shooter Event. These Crisis Management Services fall into three main categories:

  • Investigation, the event responder will conduct an independent investigation into the Active Shooter Event for sole use by the insured in determining the facts of the Active Shooter Event, informing crisis response plans and identifying any potential third party liability exposures as soon as possible.
  • Crisis Management Support, the event responder will provide advice and support to the Named Insured on the management of the situation and the applicable crisis communication strategies post the Active Shooter Event.
  • Temporary Security Measures, the event responder will (if required) arrange for armed or unarmed agents to provide temporary security enhancements as required by the response strategies.

Masullo: How does Risk Management fit into this offering?

Paul Marshall: Similar to Cyber Liability prevention, it is important to have a security review audit and vulnerability assessment.  Some polices provide these services and some do not.  I prefer these services are provided immediately after the policy is purchased to help the insured feel that they are getting an added value for the premiums.  I also would recommend that the post-bind risk management firm be the post-event crisis management firm.

The Security Review should include, risk assessment identification of security gaps and mitigation plans for identified risks. Document Plans should include documented, agreed upon strategies including, crisis management structure, clear lines of escalation and communication. Exercise and implementation awareness and scenario training for all employees to build knowledge of plans including Event stress testing with realistic simulations to test plans and systems will help your people develop skills to manage crises and should also be included. Additionally included should be Workplace violence prevention that includes screening practices, policy and procedures review, prevention team training, incident response protocol and post critical incident response.

Masullo: This has been very educational Paul.  Any closing thoughts?

Paul Marshall: I hope this coverage guide will assist your readers.  To recap, below is a quick summary of what to look for in an Active Shooter Workplace Violence Insurance Program:

  • 3rd Party Liability Coverage that includes damages, monetary awards, settlements
  • Primary Other Insurance Clause
  • Property Coverage
  • Business Interruption
  • No Exclusion for Terrorism
  • No Exclusion for under 3 casualties
  • No Exclusion for over 50 casualties
  • No Exclusion for Act of Burglary/Theft
  • Crisis Response Services pre-approved and paid by carrier
  • Security Vulnerability Assessment included
  • Safety Action Plan Seminar / Webinar included
  • Crisis Response Management Hot Line included
  • Crisis Counseling included
  • Funeral Expense included

For additional information, please contact:

Paul Marshall

Managing Director – Active Shooter / Deadly Weapon Protection Insurance Division

McGowan Program Administrators
P: 937.949.5816 x5951 | C: 937-241-6423

[email protected]


Additional information at:

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