Insurers Getting More Business After Mass Shootings

Worried schools, private firms, stadiums and government agencies are buying active shooter policies to protect themselves from big damage bills.

After every mass shooting, more calls come in to insurers, from private companies, from large stadiums, and from government agencies and public schools, reports Governing. “We probably have seen a tenfold increase in inquiries since Parkland,” says Paul Marshall, an insurance broker for Ohio-based McGowan Program Administrators. “People just feel vulnerable when [a shooting] happens.” Since the Parkland, Fl., school attack, at least seven South Florida school districts have purchased $3 million worth of “active shooter” coverage from McGowan. The FBI says the average number of active shooter events per year jumped from 6.4 between 2000 and 2006 to 16.4 in the period from 2007 to 2013. The FBI defines them as cases in which an individual is actively engaged in attempting to kill people in a populated area. They claimed 1,043 lives between 2000 and 2013. More than one third of incidents occurred on government property, including schools.

Aside from the loss of life and the pain these events inflict on a community, deadly shootings have financial costs that can be difficult for governments, especially small or struggling municipalities, to bear. The tangible costs alone can overwhelm a government: litigation, compensating victims, paying for funerals, providing trauma counseling, reconstructing or refurbishing buildings, and investing in new security measures to prevent another attack, to name a few. The impact of intangible costs to a community — reputational damage, loss of tourism revenue and high turnover among workers — is impossible to measure. Insurer Marshall says general liability policies typically have a “duty to defend” clause, meaning that they require a lawsuit to activate coverage.  In contrast, active shooter policies go into effect as soon as a person commits a targeted attack. Coverage pays for a host of associated expenses, including victim expenses, particularly medical bills; agency costs, like extra security and business income losses; and liability costs for lawsuits.