Why Insurance Providers and Security Professionals Should Work Together on Active Shooter Risks

With today’s mounting tragic events, it’s more important than ever for businesses to protect themselves, their employees and their customers. According to the Fatal Occupational Injuries report conducted by the Bureau of Labor Statistics, there has been a reported 43 percent increase in homicides in the workplace. On average, about 46 percent of all homicides in the workplace occur due to shooting deaths.

The most recent FBI study (www.fbi.gov/news/stories/fbi-releases-study-on-active-shooter-incidents), shows 160 active shooter situations in the United States between the years of 2000-2013. Those active shooter situations have resulted in 486 deaths and 557 injured.

These numbers will increase since this report does not include recent events such as San Bernardino, Pulse Night Club, Las Vegas and Texas.

The number of shooting events, those killed and those injured has steadily increased from 2014-2017, according to the website ShootingTracker.com. Since 2014 through October 7, 2017, there have been a total of 1,242 shootings resulting in 1,436 deaths and another 5,570 injured. Current year-to-date totals through Oct. 7, 2017, reveals 250 shooting events resulting in 347 deaths and 1,597 injured.

Confirmed acts of terrorism are also on the rise, according to the Johnson Archive. From 2014 through Oct. 7, 2017, there have been 39 events resulting in 205 deaths and 792 injured. There have been seven confirmed terrorist attack incidents as of Oct. 7, 2017, leading to 69 deaths and 585 injured.

While many businesses are concerned about violent acts at the workplace, many believe they are not properly prepared for an active shooter situation, according to a 2016 survey by Everbridge, a global software company that provides software applications to automate and accelerate an organization’s operational response to critical events, and Emergency Management and Safety Solutions, a provider of professional consulting services in the area of incident management.

The survey was given to 888 organizations, of which 58 percent had more than 500 employees and 44 percent had more than 1,000 employees.

There are a number of threats that organizations prepare for, according to the survey. The top five threats that organizations face are, in order:

Despite active shooter, workplace violence and terrorism ranking in the top five, 79 percent of those surveyed stated that they are, at best, somewhat prepared. Only 7 percent stated they were very much prepared and 20 percent said they were not prepared at all.

Minimize Exposures

Annually, more than two million U.S. workers report being victims of workplace violence. This comes at the estimated cost of $120 billion a year, according to 2014 estimates by the National Institute for Occupational Safety and Health. So, why are organizations not doing more to minimize this exposure for their business, their employees and their clients? In my opinion, the main reason stems from the belief that organizations just don’t have to.

In my experience, organizations assume that insurance will cover any costs associated with these types of tragic events. I have also recognized that there is a critical disconnect among insurance companies and security professionals. Security professionals could help advise insurance companies on what mitigating factors should be established to minimize exposures to loss.

There is a strong relationship between the Society of Human Resource Management (SHRM) and the American Society of Industrial Security (ASIS) regarding recommendations for policies on all issues as they relate to human resources and security. However, what appears to be missing, even within organizations such as the Risk Management Society (RIMS) is informing and relaying how those recommendations can help the insurance providers.

Before active shooter or terrorism policies are issued, there are mandatory questions that need to be asked. These questions should not result in a simple yes or no answer. However once questions are asked, those seeking coverage should be required to provide documentation as proof to support their answer. While insurance underwriters may not know how to fully examine the requested documents, a qualified security professional will.

There are certain policies and procedures an organization should have in place which address and mitigate the potential for loss. Some of those policies and procedures that should be verified include, but are not limited to, the following:

• Do they have a workplace violence program and is it up to date?
• What is their hiring process? Do they conduct background checks?
• What is their termination process?
• Do they have a hostile termination policy and procedure?
• Do they have a crisis management plan and is it current?
• Do they have a reporting process for “see something, say something” in place?
• Do they have a business continuity plan?
• What type of access control measures do they utilize?
• Do they have a training program for their staff on company policy and procedures and is it documented?
• Do they utilize any form of security in-house or is it contracted?
• What is the standard operating procedure for the security?

Most active shooter and workplace violence incidents occur because organizations fail to have or adhere to one or more of these policies. Being able to answer and validate these questions can potentially lead to reducing risk exposure.

There is also a list of security specific questions that should be asked of any organization that has security officers on site. Those questions would include, but are not limited to, the following:

• Are the guards armed or unarmed?
• What are the rules of engagement (ROE)?
• If they are armed guards, are the hiring clients aware of the ROE?
• Are there specific post-orders given to each location they provide security for?
• Have the guards been trained on situation de-escalation?
• Are the guards instructed to “observe and report” only and if so, are the clients aware of the guard’s response responsibilities?
• What types of weapons and retention holsters are being utilized?
• Have they been trained on handcuffing?

By not ensuring these types of questions are answered and verified, organizations are open to legal exposure which ultimately is paid for by insurance. The goal is to diminish as much liability as possible thus reducing financial losses. By being proactive and having updated policies, procedures and training in place, the potential award amounts could be greatly reduced.

Legal exposures, in general, fall within the charges of:

• Violation of OSHA’s general duty clause;
• Negligence or often gross negligence;
• Respondent superior – circumstances when an employer is liable for the acts of employees performed within the course of their employment. This rule is also called the master-servant rule, recognized in both common law and civil law jurisdictions;
• Wrongful death;
• Loss of parental consortium – the law that refers to the deprivation of the benefits of a family relationship due to injuries caused by another;
• Premise liability;
• Voluntary assumption of duty to protect;
• Pain and suffering;
• Emotional suffering.

These losses can and have cost insurers tens of millions of dollars in court awarded compensation.

One such case is Beneke v. Accent Signage Sys., No. 27 MCV-13-2275 (Min. 4 D.C. 2013). This was an active shooter and workplace violence case where Accent Signage was sued by the surving members of an individual who was killed in the workplace. It was found that the company knew the shooter posed a threat, and they were warned ample times that he was unstable. The company had no security cameras, no security guards and clearly no program in place to address this type of situation. The day the shooter was to be terminated, the company took no precautions. The shooter was informed that he was to be terminated, but then left unsupervised. During that time, the terminated employee retrieved a weapon from his vehicle. This case settled for an undisclosed amount of money. However, estimates claim that the settlement was close to seven figures.

Another example is a case against U.S. Security Associates, a security firm hired by Kraft Foods Inc. In this situation, a Kraft employee was suspended for causing a “fracas.” Security was instructed to escort the employee off the premises, which they did not do. Instead, security only escorted the employee to the gate. This employee then went to her vehicle, retrieved a gun and drove to the gate and demanded entrance. Upon gaining access, the employee went to the break room and shot three co-workers, killing two people. The security guards witnessed the incident, ran away and failed to warn others despite a duty to do so. In this instance, U.S. Security Associates was ordered to pay $38.5 million in punitive damages and another $8 million in compensatory damages. The appeal of the judgement was dismissed in 2016 and the award stands. Masciantonio v. United States Sec. Assocs., (Pa. 1 D. 2016). See Also Wilson v. United States Sec. Assocs., (Pa. 1 D. 2016).

What steps can your clients take and how can security professionals and risk managers help? As insurance providers, there should be a developed partnership, with verifiable, security professionals.

Critical areas that they can immediately assist with include:

• Assist insurers with developing new emerging business opportunities such as “active shooter” and “terrorism” policies.
• Help understand your current client portfolio and assign levels of risk such as high, medium and low, and develop a list of required action items for each.
• Assist insurers in understanding what organizations should be doing to mitigate their risk and exposure.
• Make recommendations on policy, procedures and programs organizations should be developing, implementing, improving and maintaining.
• Security professionals should also be used to audit current insureds’ programs, policies and procedures
• Lastly, security professionals can conduct training for the insured.

Working with security professionals or risk managers to help insurance companies understand the gaps in a client’s security processes is not only critical to save employee lives. But better collaboration between both industries will help to reduce the potential for legal liability in the future, while also helping to reduce the chances of an incident ever occurring.