So far in 2022, the U.S. has experienced multiple tragic mass shootings. One only needs to see the images on the news following the shooting at Robb Elementary School in Uvalde, Tex., or the attack during the Fourth of July parade in Highland Park, Ill., to be reminded of the heart-breaking, human impact these incidents have.

There are varying ways to define an active assailant shooting incident. The FBI version is “an individual actively engaged in killing or attempting to kill people in a populated area.” The Gun Violence Archive, a Washington, D.C.-based non-profit that collects gun violence incidents from over 7,500 law enforcement, media, government, and commercial sources, defines a mass shooting as “a minimum of four victims shot, either injured or killed, not including any shooter.” This same group reported there have been 518 mass shootings so far in 2022, with 33,752 deaths linked to firearms (as of Oct. 4, 2022).

The FBI also reported that the number of active shooter incidents identified in 2021 represented a 52.5% increase from 2020, and a 96.8% increase from 2017. Whichever data source you consider, the stats show a clear trend that mass shootings are increasing and becoming more severe.

The Insurance Products

This risk does not only impact individuals, but also businesses. To respond to this emerging risk, the insurance industry has created a new class of products, commonly referred to as “active assailant” or “active shooter.” Unlike many insurance products, which were designed to indemnify the policyholder in the event of a loss, these products were designed to provide holistic coverage solutions while giving the policyholder access to world-class response consultants. Broadly speaking, the coverage can be broken down into three segments:

  1. People protection
  2. Balance sheet protection
  3. Reputation protection

People protection. Many active assailant products give the policyholder access to response consultants, which are typically third-party vendors who partner with the insurer. These consultants are experts in the field of crisis response and prevention training and can provide immediate assistance following an attack. No one incident is the same, so the response will vary depending on the attack. However, a crisis response will usually consist of the following elements: muster point organization and tasking, law enforcement liaison and coordination, media messaging, crisis communication, trauma risk management, and staff and family assistance.

The other aspect of the response element of the product is the free prevention training. This can be tailor made to each client’s need, but the underlying principle is educating and training the policyholder so that if an attack were to happen, the people impacted are equipped with the knowledge they need to try and protect themselves. The training ranges from direct employee education, simulated incident assessment, review of the client’s security arrangement, through to tabletop exercises from the management team.

However, should an incident unfortunately occur, the policies will seek to ensure the victims have the care they need. For example, this can be in the form of funding medical expenses for up to a year after the attack or by giving the victims and/or their family members access to psychiatric care.

Balance sheet protection. An active assailant incident can trigger a range of financial implications for businesses, even if they are not the direct victim. In the immediate aftermath of an attack, it is likely the client’s premise will be closed while law enforcement conducts their investigation and repairs are made to the site before a business can reopen. Even after the site can reopen, customers may be wary about returning. Active Assailant policies provide indemnity for this in the form of business interruption coverage and loss of attraction. These coverages also may be extended to cover denial of access if a nearby attack (or threat of attack) triggers a lockdown of the road or the property.

That said, the most severe financial implication from an attack can be litigation. Even if the client is not directly negligent or responsible for the active assailant’s actions, it is possible that either the victims or the victims’ families may seek damages. Some, but not all, Active Assailant policies will indemnify the policyholder for legal damages and attorney fees. This is a vital part of the coverage which often gets overlooked, as businesses may feel they have this coverage from their general liability policy. While that may be the case for some clients, these policies are often silent on the coverage for active assailant incidents, which can lead to ambiguity in the event of an incident. Affirmative coverage is always better than silent coverage.

Reputation protection. Even if a policyholder was not responsible for the attack, their business will likely be linked to the event. In a social media dominated world, where images and opinions are shared in real time, correctly managing a client’s brand and reputation during and after an attack can have lasting implications. Through an Active Assailant policy, the insured will have access to public relations or brand rehabilitation experts who are on hand to help minimize the potential harm to the policyholder’s image.

The Marketplace

In tandem with this tragically growing trend, the active assailant market is still emerging, with each insurer in this space offering their own variations of the products and access to difference response consultants. Depending on the type of coverage required, market capacity can range from US$25 million to US$200 million.

As with many insurance contracts, the devil is in the details. It is important that clients scrutinize the policies they are buying and, crucially, meet with their response consultants. Some package policies may include “active assailant” cover, but with sublimits of US$25,000 and either very limited coverage or restrictive policy trigger. If the worst were to happen, clients need to know that their response consultants are up to the task and that their carriers will help them through the aftermath.

Key Takeaways

The active assailant marketplace is growing, and the importance of the product is becoming even more established. Between 2014 to 2020, there was an average of one mass shooting every 4.2 days; in the first half of 2022, this number has grown to an average of more than one incident per day. This is a shocking reminder of the prevalence and ever-growing risk that businesses are facing from active assailant events.