Risk Adviser
No Place to Hide
As active assailant attacks occur in numerous venues, the focus must be on prevention and new coverages.
- Peter Bransden
- December 2019
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As the number of active assailant incidents rises, the targets of attacks become ever broader. Alongside such higher-profile locations, we have seen incidents at nightclubs, supermarkets and apartment complexes. Those businesses that believe themselves to be immune need only be reminded of the mass shooting at the Gilroy Garlic Festival earlier this year—nowhere and no one is without risk.
Organizations are poorly protected by traditional insurance policies against the modern-day terror of an active assailant. Many may hope that their terrorism policy would step in when the unthinkable occurs. However, this coverage is generally triggered only when there is a clear political, ideological and/or religious motive on the part of the assailant. Most acts of workplace violence show no such motive. The motive behind the deadliest shooting in American history—in Las Vegas—is still unknown.
Standard P/C forms may provide business interruption coverage only until the damaged property is restored. The goal of an active assailant is not to damage a building, but to cause injury and death to as many people as possible. Hoping that general liability insurance provides coverage is an increasingly unrealistic strategy in the wake of multimillion-dollar lawsuits following these incidents—the largest being a reported $800 million settlement following the Las Vegas MGM attack. Many carriers now have explicit firearms and assault and battery exclusions for this reason, a trend we expect will continue.
Businesses must look for a solution that goes beyond relying on coverages that inadequately treat the symptoms of these attacks, and instead focus on preventing the cause itself—taking a proactive role in preventing, mitigating and responding to these incidents.
The consequences of failing to do so can be devastating, and the aftermath of a mass shooting can shut down businesses entirely. The Pulse Nightclub in Orlando never reopened after the 2016 shooting. For those companies that survive, they may suffer reputational damage for many months to come.
In trying to solve the problem of what businesses can do to prevent these attacks, the specialty insurance industry has created active assailant policies. The coverage mitigates their outcomes, and responds in a manner that cares for victims, protects reputations and gets operations back up and running.
These policies provide experienced professionals who can implement such risk control measures as threat assessments, social media monitoring and staff training. Crisis management structures can also be put in place to navigate through the immediate aftermath of an attack. Providing victim benefits (e.g., medical expenses, long-term psychiatric treatment), brand rehabilitation costs and access to crisis consultancy expertise, combined with procuring temporary security and alternative premises can help to mitigate future lawsuits and minimize downtime.
Finally, first-dollar, dedicated coverage to protect against liabilities, defense costs, property damage and business interruption also can be provided. A risk management strategy that not only fills gaps left by traditional policies, but assists in preventing these tragedies from unfolding in the first place.
In light of the emerging risk of active assailants, best-practice preparation now reflects a broader understanding within risk management. The goal is no longer simply to transfer financial risk down the line; rather it is about having access to the right services from the right people, at the right time.
Best’s Review contributor Peter Bransden is vice president, crisis management, at Aspen Insurance. He can be reached at peter.bransden@aspen-insurance.com.
