Episode 15 - Active Shooter Insurance

this is Lisa Miller and Associates Florida Insurance Roundup your podcast on the people issues and regulations shaping Florida's Insurance market now here's Lisa Miller Welcome Friends it seems that not a week goes by without us hearing of another tragic shooting event in the United States the latest was this awful mass shooting in late October at the Tree of Life synagogue in Pittsburgh Pennsylvania where a gunman killed 11 people and injured six those within schools and universities often get the most press attention but businesses places of worship and government buildings have all been Targets in recent years if you feel like these shootings are becoming more and more common you would be right data from the FBI show the average number of active shooter events in the US has doubled over the past 8 years compared with the previous eight years there were 30 such events in 2017 more than any other year since 2000 in Florida we need no reminding of these atrocities in February an attacker killed 14 students and three staff members and injured 17 others at margerie Stoneman Douglas High School in Broward county in later months shootings occurred in two high school football games in our state leaving two dead and four other people with injuries and finally in August a video game tournament in Jacksonville was the sight of a shoot shooting that led to three deaths and 11 injuries the list just seems to go on and on while lawmakers in Tallahasse and Washington grapple with how to confront this problem we should ask ourselves just what is available in the insurance Market to protect individuals and businesses in a previous edition of our Florida Insurance Roundup we spoke with Robin Wilkinson of air worldwide about how insurers and reinsurance companies can model potential aggregate liability losses arising from shootings across a portfolio we now turn to some of the insurance coverages available to policy holders that are specifically designed to react to these events joining us on today's podcast is Peter bransden an underwriter for Aspen Insurance Peter leads Aspen's crisis management team in Miami whose product site includes terrorism kidnap and Ransom and product contamination he's also the only underwriter in Florida who specializes in what is called active as salent insurance Peter welcome to the Florida Insurance Roundup hi Lisa thanks for having me I'm a big fan of your podcast so really pleased to be here absolutely and tell us about Aspen I know they've been in the market quite a while but what's a little background Aspen is a specialty insurer and reinsurer and our Niche is to really find emerging threats and create um specialty Insurance products to to face them I think our crisis management team exemplifies this and to give you just one example uh we took a pioneering role in responding to the Somali piracy crisis and we're still a leader in that market what an amazing company and I think their passion and dedication in this particular Niche speaks for itself um would you tell me about this active as salent insurance product and what is an active as salent and how is it different from what we commonly hear called an active shooter well active as salent insurance has been designed to protect policyholders against a wider range of attacks involving a weapon it's often referred to as active shooter insurance but these events are by no means limited to Firearms we've seen vehicle ramming such as the van attack in Manhattan last year or knife attacks such as the London Bridge attack uh a year ago equally suicide bombings around the world show how terrorism has evolved and you can imagine there's a real Demand by policyholders to be protected against these threats so in active as salent insurance the market has created a broad coverage which we believe does just that so walk me through what the policy includes most active asent policies will include five main categories of cover so let me go through them and and I arrang these in kind of increasing order of importance I think first is the property damage caused by these events clearly in shootings this can be quite limited but for instance a suicide bomb or a vehicle attack can cause significant structural damage to a building and this damage can close a business for an extended period of time which of course can generate income losses so there's a second head of cover business Interruption uh besides being closed for repair businesses can also be shut by the authorities while investigations go on for hotels department stores you know restaurants bars and manufacturing plants these revenue losses can quickly get into the millions of dollars in the case of the pulse night club in Orlando Florida the business actually never recovered after the attack and remains closed a policy may also allow for business Interruption even if the event happened at a neighboring business think of when the police shut down a whole block and we call this denial of access coverage there are even some carriers out there ourselves included who are working on a coverage that would cover loss of Revenue even after a business has reopened following an attack we call this loss of Attraction the third main section of the policy is legal liability and defense costs almost the next day after the Jacksonville Video Game tournament shooting in August this year there were reports of lawsuits citing lack security and we see the same thing happening with most school shootings Lisa in your conversation with Robin at a you mentioned that the margerie stonan Douglas safety act which sets the bar for school security and failure to comply with best practice may open up schools for lawsuits yet further it can seem quite strange to think that there may be liability arising on the part of a policy holder for events that may at first seem to be completely out of control how can a hotel or restaurant be liable for a shooter entering but remember we're not only talking about breaches of reasonable security but also having for example insufficient exit routes or a failure to respond correctly your listeners might remember the shooting in a cinema in aora in Aurora Colorado in 2012 the cinema defended itself successfully against the lawsuit but the legal fees have racked up to somewhere around $700,000 so this is really a serious issue I remember that shooting it was tragic and I remember that lawsuit this is incredible coverage I want to know what else it does what other kinds of coverages does it offer well in addition to those we have extra expenses uh this provides for a broad range of protection most policies will offer victim medical costs and and funeral expenses and the broadest forms will also provide temporary staffing security and temporary premises and even brand Rehabilitation expenses but what I think is really the key tenant of this product is the crisis management coverage and this is the final aspect by this we mean 24/7 access that policy holders will have to a specialist team of active assent response Consultants to help guide them through this frankly awful and alien experience in Aspen's case we've partnered with gor uh who are the world's largest privately owned security company guard world not only has a specialist team comprised of X FBI active shooter response agents but also has access to a Nationwide network of Professionals in fields such as media relations and family liaison services so our policy holders get immediate access to guard World via an emergency telephone number and within 24 hours these Consultants will be on the ground at the site of event assembling a crisis response team and providing really vital guidance incredible coverage and I think to recap it I see all the facets of what is needed surrounding an active as salent event property damage liability defense cost any extra expenses and like you said the most differentiating coverage is the crisis management team that does more than just write a a policy check or a claim check it really is the entire Suite of services after one of these events well done is there some type of um traditional property or liability policies that are out there that might duplicate this coverage what is already on the market well that's a really important point we're very conscious that you know policy holders don't have unlimited budgets and we don't want to be unnecessarily doubling up existing coverage so so let me address it most liability and property policies are actually silent on the question of shooting events um on this point again I thought your podcast of Robin AI was really interesting my takeaway from that was that she said you know clearly insurance companies should be concerned with potentially huge liability exposures as a result of shootings and in many cases that these haven't been included in how normal GL policies are rated for and in some case and this is really a result of 911 GL policies specifically exclude terrorist attacks I personally expect these exclusions to get broader and more prevalent as shootings continue to unfortunately occur and I fear that the Tipping Point as is often the case with insurance will be a Court ruling by that time we'll have on the one hand uh a policy holder facing the Fallout from an active as salent attack and on the other hand an insurance company denying claim and ultimately the losers are the victims of that attack so active as salent policies give policyholders peace of mind that when it comes to claiming there is no ambiguity this is generally a primary coverage and the intention here is that the product should be the policyholders first Port of Call for losses but to be clear the key difference between what we are offering and what the general liability Market offers is that we provide a range of expense coverages that the policy holder can draw upon immediately be it medical costs for victims fu expenses or a well-managed median for that family liaison response often policy holders just won't have the resources time or skills to put these interaction themselves and that's where we add real value that is wonderful news and I'm assuming uh that there's interest all over the world but what are you seeing in Florida in terms of those that are expressing interest in either purchasing this or working with you through the agency Network sure well Florida has actually been the state where we have seen the most interest and unfortunately I think I think this follows the trend of Florida being one of the highest risk States for these events Hospitality healthc care and education are probably the industries where we see the most interest from single bars and restaurants in Miami to Resorts in Orlando small private schools to some of the state's largest public universities nursing homes and hospitals were some of the earliest adopters of the coverage but really any organization has an exposure and therefore we've seen some inquiries from some places that frankly I wasn't expecting condo associations golf and country clubs for example so any really organization that has exposure is the perfect customer for you what are you doing to incentivize organizations to mitigate or deflect the risk of an active as salent event well that's such an important aspect of this we will provide significant discounts to policy holders that can demonstrate that they have taken steps to mitigate this risk and that can be anything from installing cameras to carrying out new higher screenings and even in some is monitoring social media but often policy holders don't necessarily know what they should be doing and that's okay we will put our clients in contact with G world right from the beginning so that they can take advice from experienced professionals on what risk mitigation techniques will be most effective we even provide further reimbursement credit to pay for things like online active shooter training courses all the way to on-site two-day surveys and tabletop simulation exercises that is exactly what I think needs to be done is that Hands-On on leadership and helping people protect themselves from these types of events in closing I'm just curious what policy holders or their agents to do to to receive a quote and how should they look at the market to see what's best for them in terms of choosing an insurance carrier or getting access to this coverage can you give us some advice sure well the number of carriers offering this is is still fairly limited we imagine more will come onto the scene shortly um I think the most important thing and my biggest advice to holders is that they should really when picking a carrier ensure that their response partners are experienced uh and that they're robust enough to be able to guarantee that they will be available in person on the door quickly at the time of need policy holders can uh can ask their broker to contact me or any one of my team we're always really delighted to help and and pride ourselves on our quick response times you have been an incredible guest today Peter and this coverage is very very important to so many organizations that have exposure and to know that it's available we're pleased to help you spread the word I'm going to close with thanking you Peter for taking the time you know giving us your ideas and raising the awareness of this product I know being in the Miami Aspen office you give a lot of thought to what types of things you can do to help make people feel safer and covered for these types of events so thank you again for being with us and on our show notes page um we'll leave a lot of great information about how people can contact you and access this product so thanks again Peter thank you very much for having me on as the world becomes more complex we have to adapt the products and services we offer to fit customers changing needs scenario-based modeling for casualty events and the Practical Insurance products that result such as this active as salent insurance policy are good examples of innovation in Insurance while no one's got a crystal ball and we cannot predict human behavior that's reflected in these horrible tragedies technology and Actuarial science are improving how we quantify that risk and price it accordingly it's all about helping people and their organizations and companies become whole again in the event of the unimaginable we would love to hear from you you can call us and leave your comment or question for our later reply on air right here on the Florida Insurance Roundup by calling 850 388 80002 again our calling number is 8503 8882 or drop us an email at Lisa Miller Lisa Miller associates.com that's it for the Florida Insurance Roundup thank you for being a part of it remember at Lisa Miller and Associates we have a passion for policy and client success I'm Lisa Miller until next time be safe this has been Lisa Miller and Associates Florida Insurance Roundup your podcast on the people issues and regulations shaping Florida's Insurance Market for more information on today's program please visit us on the web at www. lamiller associates.com [Music]