US religious centers are at the mercy of many risks, from their members’ information being targeted by cybercriminals to steep increases in auto premiums and exclusions for multi-passenger church vans. In the midst of these developments, one relatively new insurance coverage is increasingly becoming a necessity for these institutions.
As acts of violence against religious organizations instigated by active shooters have been growing over recent years, more congregations are considering purchasing insurance to protect themselves.
“The marketplace for active shooter or active threat insurance is growing and we’ve seen interest in that from churches,” said Andy Lott, managing partner at the Insurance Office of America. “A lot of times, it comes down to budget – can they afford the coverage if they are interested in it, and then also what does the coverage actually provide. Because there are so many differences in the marketplace, it’s something that an experienced agent needs to handle and address.”
This insurance coverage is still a newcomer to the industry, unlike general liability or other coverages that have been in existence for a long time, added Lott, which means educating insureds about it is key. After all, the threat of active assailants and workplace violence is one that many businesses have to think about today.
“It’s evolved from the standpoint that most businesses took the approach that it’s not going to happen,” said Eric Bossard, president of Commonwealth Insurance Advantage. “Now what’s happening as [these events] are occurring, they’re taking the position that since the probability is there as a number, if it does happen to us, are we prepared to mitigate the impact and how do we handle it from a financial standpoint going forward.”
Brokers and agents need to help their clients understand the importance of coverage for this risk. Insureds should consider buying a standalone active shooter policy on top of their commercial general liability policy because many ‘standard’ insurance policies have gray areas when it comes to active shooter or workplace violence-related incidents, especially when it comes to compensating victims.
“Part of the problem is that within the insurance environment, a lot of people think that the general liability policy would cover any acts of workplace violence or active shooter,” said Bossard, adding that businesses could be left to foot the bill for additional costs, like funeral and crisis management expenses related to the event. He pointed to a hostage incident at a Trader Joe’s in California where after the fact, the company had to spend in excess of a million dollars to cover the cost of counselling services for employees who were in the building at the time of the shooting.
Additionally, active shooter policies can cover physical damage, legal liability and litigation, business interruption coverage, medical expenses, death benefits, and loss of attraction. Insurance brokers need to, however, look out for the exposures, such as terrorism exclusions, employee exclusions, vehicle exclusions, and mental anguish exclusions.
Read more: What is active shooter insurance coverage?
Brokers and agents can be on the frontlines in making sure that their clients understand the full scope of active shooter options available on the marketplace right now.
“The biggest hole that we have right now is the education part to make sure that insureds understand that the general liability doesn’t necessarily cover for workplace violence,” said Bossard. “It’s one where you have to be deemed liable in order for the coverage to be triggered under your general liability policy. That can take years and that can take litigation, whereas in policies like ours, there is a response on the first policy basis, so that if you have a situation as simple as brandishing a weapon, that activates cover under our active threat solution.”