How Active Assailant Insurance Can Help Your Business Survive after a Mass Casualty Event

Co-authored by Chantal Roberts, CPCU, AIC, RPA

Are those firecrackers? Is a car backfiring? Perhaps there’s a disturbance of some kind. Today’s managers and owners rarely consider if an active shooter incident can occur on their property. Unfortunately, active shooter or active assailant incidents are more prevalent in the United States than ever before. Due to the increasing occurrence of this type of loss, a business that faces this situation may find itself without coverage for many claims that arise post-event. These uncovered losses can include posttraumatic stress (PTSD) treatment, structural improvements of buildings, post-event security, or the inability to handle the onslaught of media post-event.

This article outlines typical policies most businesses buy and describes additional coverage business owners should consider to protect their business, employees and customers/guests if the unthinkable event occurs. It discusses active assailant policies along with other risk prevention techniques. This article helps business owners understand the liability products available and provides some pricing examples. Active assailant coverage is surprisingly affordable, and while not right for every business, certain owners will want to obtain a quote for this important coverage.

Definitions Matter

According to Vox, the week of January 5, 2014, is the only full calendar week without a mass shooting since January 1, 2013. As of April 27, 2019, 104 mass shootings killed 124 people and wounded 375. The Gun Violence Archive defines “mass shootings” as “events in which four or more people, excluding the shooter, were shot.”[i] So ubiquitous are mass shootings that the shooting on the last day of Passover, 2019, in a Poway synagogue did not make the front page in most major newspapers.

The U.S. Department of Justice and the Federal Bureau of Investigation (FBI) outlined active assailant incidents in 2016 and 2017. The FBI found 20 occurrences in 2016; the number increased to 30 in 2017. Unlike the Gun Violence Archive, the FBI excludes gang- and drug- related activities as well as gun-related activities that do not harm others. All 50 shooters were males who acted alone, and the majority of them were in their 20s.[ii] Active assailants focus on soft targets – locations with a high number of people and low security. The events usually occur in businesses (45%), schools (25%) and government facilities (10%).[iii]

The U.S. Department of Homeland Security defines an active shooter as “an individual actively engaged in killing or attempting to kill people in a confined and populated area, typically through the use of firearms.”[iv]

This definition may be important because not all active assailant insurance policies define an active assailant event in the same way. An active assailant incident can range from a shooting, a stabbing, or an explosion such as the Boston Marathon bombing, to individuals driving automobiles into a crowd.

Insuring agreements (the insurer’s promise to pay), definitions and exclusions differ among policies. Historically, active assailant policies stemmed from terrorism and kidnap and ransom policies. However, as these horrific events escalated and the types of damages began to increase, underwriters and claims professionals recognized that these policy forms failed to meet their clients’ needs.

The public and employees began placing more expectations on business owners to protect them from harm. Often business owners failed to recognize their standard commercial policies could leave them with large, uncovered losses, losses that would exceed their policy limits and litigation costs that could devastate a small-to-medium sized company.

Overview of Standard Commercial Insurance Policies

Most business owners buy several insurance policies, such as commercial property and liability, worker’s compensation and business interruption coverages. Attempts by the insurance industry to modify current business policies to cover these events still left coverage gaps for active-assailant incidents. Clearly, society needed more protection.

During an active assailant incident, bullets, explosions, or the police knocking down doors to gain access to the interior will damage the building. Provided the business has the “special” cause of loss form, the insurer would probably cover the damages if the insured meets all other insurance provisions.

The general liability (GL) policy responds when the business owner is “legally liable” for an accident and has breached a duty or standard of care. The business owes an invitee, its customer, a high duty of care to provide an environment free of hidden risks or perils. However, when an active assailant strikes with little or no apparent connection to the property, how can the business’ customers and employees find liability against that owner? While the general liability policy should provide a defense, it may provide few if any benefits to injured customers or employees.

This is where active assailant policies can be invaluable. Paul Marshall, the Managing Director of the Active Shooter/Workplace Violence Division Team at McGowan Programs, one of the premier writers of this coverage, likened the coverage to a “go-fund me account.” The policy will provide immediate benefits, without the wait to determine liability, according to Marshall.

Additionally, while the GL policy provides medical, funeral and death benefits for the customer, regardless of fault, payable amounts are usually $1,000 or $5,000, which may not cover all personal expenses resulting from an active assailant incident. Additionally, costs for an active assailant event, such as cleanup, media control and other costs not faced by a typical injury on a business’ premises can be expensive.

The Occupational Safety and Health Administration (OSHA) Act of 1970 mandates a business ensure the “safety, (health) and security of employees.” As a general standard of care, OSHA can find employers responsible if employees receive “reasonably foreseeable” injuries.[v] While worker’s compensation policies are necessary to provide for the health and well-being of employees injured at work, policies usually extend coverage for the employee while in the course and scope of the job. What about workers who have left their post and are injured as they walk away from the job site? Would they find coverage under workers compensation? Court decisions are still rare regarding these types of events.

Similarly, if an incident arises out of a personal quarrel such as domestic violence, coverage may not apply since the incident does not result from employment. Because workers compensation courts are state-specific, no federal standard applies. One state may find a connection to employment that another state does not.

Business interruption policies are important for the continuation of a commercial endeavor after a loss, but the policy responds only when “direct physical loss of or damage to property at premises…” occurs.[vi]

An employer’s current business policies may leave the owner with significant coverage gaps after an active shooter event. As society changes, insurers respond. Beginning in London and now firmly entrenched in the U.S., specialty insurers in the surplus lines market developed policies to meet the needs of business owners should an active assailant event occur.

Why Every Business Owner Should Consider Active Assailant Coverage

While business owners have many reasons to want active assailant coverage, the most important reason is that the policy helps them avoid large uncovered losses from an active assailant event, losses that would cause the business financial hardship.

A standard commercial property coverage policy will pay to restore the property to its state prior to the loss. However, if the business wants to tighten security by reconfiguring entrances and exits, the property policy would not cover such renovation costs. School administrators rebuilt Sandy Hook Elementary School after the shootings not only to focus on increased security but also to rearrange the school in response to those suffering from PTSD.[vii] The rebuilding of the Sandy Hook elementary school cost Connecticut taxpayers $50 million. A standard commercial property policy would not provide that coverage, even given actual damage to the premises itself. Some active assailant forms will provide that coverage.

Liability policies respond if the active assailant event meets the definition of an “occurrence” as defined by the policy. If an active shooter or other event causes multiple injuries or fatalities and a court rules the event is one occurrence, an owner’s liability policy limits will quickly erode. While it may seem beneficial for the court to determine that such an event constitutes more than one occurrence, this, too, can harm a business that has a large self-insured retention or a high deductible.[viii] Finally, liability policies generally have assault and battery exclusions and terrorism exclusions. It is possible the insurer could invoke these exclusions and deny the damages.

As mentioned previously, a workers compensation policy may not respond to employees’ medical needs if the employees are not in the scope and course of their employment when the event occurs and if the attack on employees is unrelated to the workplace.[ix] For example, an administrative law judge may not find a purely personal quarrel between spouses or intimate partners work-related. Many workplace fatalities arise from domestic quarrels. In workplace shootings between 2003 and 2008, a current or former partner killed nearly 33% of the female decedents.[x]

Other Insurance Considerations

If the business did not sustain direct physical damage from an active assailant event, the business interruption policy would not respond. However, if police quarantine the area during investigation and the business cannot reopen during that time, coverage for civil authority may apply. Business owners should discuss this important item with their current brokers to determine if they have coverage and if their limits are appropriate.

The “Other Insurance” clause appears in nearly every policy (except life insurance) and is most prevalent in property and liability policies. This clause establishes how multiple insurers will pay a loss where the event triggers more than one policy. Depending on policy language, the policy will provide no coverage if there is another insurer that covers the same risk; or it will provide a proportionate share of the damages with the other insurer; or it will be in excess of the other insurer. Policies include this language to prohibit a business from profiting by submitting a loss as the same claim to more than one insurer. Check this clause in the active assailant policy to ensure these policies are primary, not excess, of other liability coverage.

Finally, an insurer could consider an active assailant occurrence as an act of terrorism, which a business’ policy purchased under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA) could exclude.[xi] The incident must meet certain criteria, such as property and casualty losses of more than $5 million. Additionally, the U.S. Secretary of the Treasury, the Attorney General and the US Secretary of Homeland Security must declare the loss a “Certified Terrorist Attack.” The government did not certify the Boston bombing event because damages did not exceed the $5 million threshold.[xii] In addition, for insurers to consider the active assailant event as an act of terror, the act must be a part of “an effort to coerce the civilian population of the United States or to influence a [U.S. government’s] policy…”[xiii]

What Is Active Assailant Insurance?

After an agent or broker reviews the current coverages of a business, the agent may offer active assailant insurance as a separate policy. Active assailant coverage can help fill coverage gaps so the business does not face uncovered losses that are potentially bankrupting. Coverages encompass crisis management aid, off-site/international attacks, loss of attraction losses and prevention techniques.

Indirect loss costs arise unexpectedly after active shooter events, and active assailant policies help to stem those costs. For example, after a 2017 airport attack in Florida, Broward County spent over $500,000 to return luggage abandoned by passengers.

Unlike standard business policies, most active assailant policies offer crisis management both pre-event to help plan for an active shooter and post event. Hiscox’s terrorism policy evolved to encompass active assailant coverage, according to Jennifer Rubin, head of Hiscox’s terrorism, war and political violence division. Hiscox partners with a public relations company to provide crisis management services, both firms working with the media to ensure that communication flows smoothly post event.[xiv]

Post event, experts reassure families and demonstrate to the public that the business is handling the assault with competence and consideration. The insurer also may facilitate victim counseling and plan steps needed to assist crisis victims. Crisis management will help the business return to customary operations more quickly than business owners who deal with the aftermath of these events on their own.

Business interruption coverage does not begin unless direct physical damage or a shut down due to civil authority occurs. Likewise, a business interruption policy would not respond to a business downturn because customers no longer feel safe at the location. This contingent loss – not a direct loss like damage to the building itself, but an indirect “loss of attraction” because of the event – can be fiscally devastating. An active shooter policy can help with this contingent loss.

Litigation is costly regardless of the type of loss, and it is beneficial for a business to obtain broad coverage for the litigation that will follow an assault. Some carriers writing this coverage offer loss prevention services pre-event so that businesses can identify troubled individuals in an effort to avoid the event all together.[xv] These services may include training and social media monitoring as well as other pre-loss activities.

Business owners must take special care when reading their policies to understand the policy definitions and determine when coverage is in-force. For example, while workers compensation may cover employees’ injuries, the active assailant policy may specifically exclude such injuries, according to McGowan’s marketing material. A business owner should require an endorsement naming the employees, volunteers, or students as insureds to prevent the form from excluding these persons from coverage.

Determining thresholds or maximum amount of coverage is an important decision. Is $1 million in coverage enough considering your exposure or would $3 million be better? Most small businesses usually choose between $1 million and $3 million in limits, according to several active assailant underwriters.

In some policies, coverage begins after a certain number of victims are physically wounded or deceased. The policy may also limit a maximum number of victims – for example, the limit could be set at 50 victims. It is important to consider not only the deceased victims of the active assailant but also those who have emotional or mental trauma due to the assault. On March 23, 2019, in Coral Springs, Florida, police responded to a second student who died from suicide – a student who initially survived the shooting at Marjory Stoneman Douglas High School on February 14, 2018. Therapists diagnosed the student with PTSD while at university, and the school district provided therapy animals and counselors. This help may be insufficient for many survivors.[xvi]

Policy definitions play a major role in an active assailant policy. Consider whether the policy covers only an active shooter or if assaults by knives and explosives also are covered losses. Additionally a policy may exclude assaults by vehicles. In London in June 2017, assailants used an automobile to drive into a crowd of pedestrians.

Each policy will respond to the crisis differently based on how it defines the event or occurrence.

A policy could describe a firearm as loaded to be “deadly,” and a firearm must meet that definition before coverage would apply. For example, absent threats of deadly force or no bodily injuries, deaths, or attacks with loaded firearms, PTSD claims may not be covered. Business owners should consult their agents and brokers to ensure they have the broadest coverage available given the premium.

How Costly is Active Assailant Coverage?

Most small-to-medium sized business owners today buy coverage limits of $1 million or $3 million, as previously mentioned. Larger businesses can buy limits up to $100 million, according to one underwriter.

Underwriters base quotes on number of employees added to annual number of guests for retail stores, schools and other establishments. They use crime maps to assess all locations and a variety of other factors to determine premium. Many carriers use a three-page or less application, so applying for coverage is easy. Business owners can obtain quotes through insurance agents who offer more nuanced coverages. If your current agent cannot help you, visit Trusted Choice at the Independent Insurance Agents & of America website to find a drop-down menu that will help you locate an independent insurance agent in your area.

Premiums are still affordable. For example, an art museum in a major city purchased $1 million limits for $3,000. A New Jersey hotel purchased $1 million limits for $6,500. A stock brokerage in Pittsburgh with 1,515 employees and yearly visitors would pay about $1,340 for $1 million coverage or $2,320 for $3 million coverage.

While active assailant policies have covered some recent events, these are “long-tail” claims, meaning it may be years before carriers total the final loss numbers. Because carriers writing the coverage have little history on which to base rates, the rate future remains cloudy.

Other Risk Management Tools

Business owners can protect themselves by employing methods other than insurance, such as monitoring social feeds and conducting emergency drills.

One idea in this era of protection against active assailants is to arm front-line personnel. Fourteen states allow teachers to carry guns in the classroom.[xvii] The belief is that armed personnel can defuse the active assailant situation before the police arrive. Arming personnel may open the business to a higher standard of care and higher premiums.

Underwriting applications ask if a business has armed guards. Always completely disclose your business’ current situation on the policy application. Any mistakes or misrepresentations could void coverage.

Unfortunately, juries could find that armed personnel were acting as an agent of the business, which increases the business’s liability. While active assailant insurance applications ask if the business has an onsite security team, armed civilians could eliminate any potential carriers willing to underwrite the risk.[xviii]

Just as schools conduct tornado and fire drills, a business can reduce the risk of casualties by using active assailant scenarios to develop a plan, implement it, and train employees, students and other covered personnel. In these simulations, participants develop a clearer vision of how to remove themselves and their customers from the situation until help arrives, if possible. Insurance applications ask who designed the business’ emergency plan and if a risk-consulting firm reviewed it

Applications also ask about past threats and attacks. Again, always disclose any events or activities that might be important to the underwriter considering the risk.

It is also useful for employers to monitor social media feeds. Monitoring social media can help identify an employee or person who might become an active shooter. In the case of the shooting at Marjory Stoneman Douglas High School, the school had expelled suspect Nikolas Cruz for “disciplinary reasons.”[xix] In the police and FBI investigation of the shooting, social media posts from Cruz showed weapons lying on a bed and a YouTube message stating, “Im [sic] going to be a professional school shooter.”[xx] Being aware of these red flags and taking action when found can help reduce the risk of an active assailant event.

How Will a Carrier Handle Your Claims?

The insurance industry divides insurance in the U.S. market into two categories: the admitted market and the non-admitted market. The admitted market insurers, also known as “standard market carriers,” are insurers who are “admitted” to carry out insurance functions in a state. Admitted carriers follow each state’s department of insurance rules and regulations. Non-admitted carriers are often excess and surplus line insurers and operate in the state without conforming to each department of insurance approval process. This difference is important when it comes to claim handling since most admitted carriers have their own claims department while non-admitted insurers often use third-party claim administrators (TPA), which are independent firms hired by carriers to handle its claims.

When considering active assailant coverage, ask about the claims process should an incident occur. You will require swift assistance following an assault. Carriers are currently developing a new type of claim team to handle these losses, trained and ready to deploy overnight. These specialty teams should encompass worker’s compensation adjusters who understand traumatic injuries management as well as aspects of PTSD; liability adjusters to address non-employee claims; property adjusters to appraise physical damages to buildings; and a lead or general adjuster as a point person with whom the business can correspond and coordinate plans. One of the closest models to these types of teams is airline disaster adjusters.

Admitted insurers such as AIG have their own staffs. Non-admitted carriers like syndicates at Lloyd’s of London generally contract with large TPAs, which have a dedicated crisis management team familiar with active assailant events.

It’s a New Time in America

Experts say no one can predict an active shooter occurrence. However, due to their increasing frequency, the insurance marketplace has stepped forward to address the concern. Preventive steps offered by some carriers range from helping employers identify troubled individuals before they kill to providing training designed to teach those in a crisis how to respond to reduce casualties.

No policy can be “one size fits all,” but careful coordination with an experienced insurance agent will help you avoid financially catastrophic and uncovered losses that could force your business into bankruptcy.

Work with an Agent Who Understands Active Assailant Coverage

A recent article in Insurance Journal warned agents about straying into coverages outside their expertise. Active assailant coverage is new and emerging. Few agents have deep expertise in this coverage. It pays to know your agent and ask what experience she or he has in placing this coverage.

According to Lori Hunter, a broker with Worldwide Facilities in Los Angeles, “This coverage is highly specialized and few brokers have expertise in part because it is a newer coverage. Only a few companies quote this line [of coverage], so my recommendation is to ask for two or three quotes and go over the policy forms with your agent. Pay special attention to the insuring agreement, the definitions and the exclusions.

“If you remain unsure about coverage ask your agent to arrange a call with the underwriter or representative from the wholesaler or MGA that quoted the risk to answer any questions you may have.”

Will These Events Continue to Escalate?

Active shooter and other mass violence events in America are not going away. We are probably years away from gun regulation, although students of the Parkland shooting sparked a national trend of activism that may result in legislative changes. Increased political rancor, greater alienation in our population and untreated psychiatric disorders are just some of the reasons we may see these events, whether with guns or other weapons, continue to increase.

In a 2015 essay by Malcolm Gladwell, author of The Tipping Point, discussing the work of sociologist Ralph Larkin, Gladwell wrote that the Columbine shooting “laid down the ‘cultural script’ for the next generation of shooters.” Gladwell suggested that “low threshold” shooters would be motivated to act. “The problem is not that there is an endless supply of deeply disturbed young men who are willing to contemplate horrific acts. It’s worse. It’s that young men no longer need to be deeply disturbed to commit horrific acts.”[xxi]

Should You Consider Active Shooter Coverage?

Virtually all business owners today should determine if their business could be the target of, or adjacent to, an active shooter event. Today’s active assailants not only focus on schools, but they also focus on soft targets – locations with a high number of people and low security. Malls, theaters, taverns near areas where the public congregates, houses of faith, charter schools – no organization with public access should consider itself exempt from this type of tragic event. An event that occurs nearby can spill over into your establishment.

According to the Department of Homeland Security, active shooter situations typically evolve quickly, are highly unpredictable and usually end within 10-to-15 minutes. The damages, both physical and psychological to people as well as property damage costs, however, will persist for years. As active shooters continue to threaten and insurers respond, coverage will change, both narrowing and expanding to manage the tragic consequences of these violent mass events. An annual discussion with your agent prior to renewal or when circumstances change in your business can help ensure you have the most appropriate coverage for your current loss exposures


[i] Lopez, G., & Sukuman, K. (2018, July 09). Mass shootings since Sandy Hook, in one map. Retrieved April 3, 2019, from https://www.vox.com/a/mass-shootings-america-sandy-hook-gun-violence

[ii] United States, US Department of Justice and Federal Bureau of Investigations, FBI. (2018, April). Active Shooter Incidents in the United States in 2016 and 2017. Retrieved April 3, 2019, from https://www.fbi.gov/file-repository/active-shooter-incidents-us-2016-2017.pdf

[iii] Active Shooter Facts. (2018, November 30). Retrieved 3 April 2019 from https://alertfind.com/active-shooter-facts/

[iv] United States, US Department of Homeland Security. (n.d.). Active Shooter Pocket Card. Retrieved April 1, 2019, from https://www.dhs.gov/sites/default/files/publications/active_shooter_pocket_card_508.pdf

[v] Moorcraft, B. (n.d.). What is active shooter insurance coverage? Retrieved April 1, 2019, from https://www.insurancebusinessmag.com/us/guides/what-is-active-shooter-insurance-coverage-118961.aspx

[vi] Insurance Services Office, Inc. Business Income (and Extra Expense) Coverage Form; CP 0030 (10/12).

[vii] Delgadillo, N. (n.d.). With Shootings on the Rise, Schools Turn to ‘Active Shooter’ Insurance. Retrieved 1 April 2019 from https://www.governing.com/topics/education/gov-cost-of-active-shooters-insurance.html

[viii] Marshall, Paul. Buyer’s Guide: Active Shooter Insurance; Retrieved 27 March 2019 from  www.mcgowanprograms.com

[ix] Marsh Risk Consulting. (n.d.). Protecting People and Operations from Active Shooter Threats (Tech.). Retrieved April 1, 2019, from http://www.micolleges.org/sites/default/files/Active Shooter White Paper-11-30-17.pdf

Michigan Independent Colleges & Universities

[x] The Facts on Gender-Based Workplace Violence. (n.d.). Retrieved April 22, 2019, from https://www.workplacesrespond.org/resource-library/facts-gender-based-workplace-violence/

[xi] Ibid.

[xii] Boston Bombing Lesson: Risk Managers Urge Better ‘Terror Act’ Certification. (2015, March 18). Retrieved April 28, 2019, from https://www.insurancejournal.com/news/national/2015/03/18/360930.htm

[xiii] Marsh Risk Consulting; Marsh’s Casualty Practice; Marsh’s Property Practice. Protecting People and Operations from Active Shooter Threats

[xiv] Hiscox’s Rubin: The Range of Active Shooter-Type Scenarios Is Expanding. (n.d.). Retrieved April 3, 2019, from http://www.ambest.com/video/MediaArchive.aspx?lid=5382700427001&vid=5412304855001

[xv] Marshall, P. (2018, September 3). Insurance Coverage for Active Shooter Risks. Retrieved April 3, 2019, from http://www.rmmagazine.com/2018/09/04/insurance-coverage-for-active-shooter-risks/

[xvi] Mazzei, P. (2019, March 24). After 2 Apparent Student Suicides, Parkland Grieves Again. Retrieved April 2, 2019, from https://www.nytimes.com/2019/03/24/us/parkland-suicide-marjory-stoneman-douglas.html

[xvii] Maqbool, A. (2018, December 07). Inside a US training course to arm teachers. Retrieved April 2, 2019, from https://www.bbc.com/news/world-us-canada-46473321

[xviii] Heisler, A. (2018, May 03). Allowing Guns in the Workplace Introduces Liability Risk. Retrieved April 2, 2019, from https://riskandinsurance.com/workplace-violence-arming-managers/

[xix] Kennedy, K. (2018, February 15). School shooting suspect made ‘disturbing’ social media posts. Retrieved April 2, 2019, from https://www.policeone.com/active-shooter/articles/471096006-School-shooting-suspect-made-disturbing-social-media-posts/

[xx] Penney, T. (2018, February 15). Prior social media posts and active shooters. Retrieved April 2, 2019, from https://www.slideshare.net/TerryPenney/prior-social-media-posts-and-active-shooters

[xxi] Gladwell, M. (2019, April 19). How School Shootings Spread. Retrieved from https://www.newyorker.com/magazine/2015/10/19/thresholds-of-violence

Four tips to giving a great insurance speech

dumbpoodleAs insurance professionals, we must often deliver speeches in meetings or to large gatherings. It is never easy to find the time to prepare adequately for the talk. Even once prepared, many of us dread public speaking. These four tips will help you painlessly prepare your presentation.

  1. What is the theme of my talk? Always begin and end with a clear theme. If you are discussing premium increases at a Rotary Club, for example, your theme may be this: Premiums are increasing worldwide. The only way to control your premiums is through a more structured, loss-sensitive insurance program or through tighter risk management controls. Punch that theme repeatedly in your talk.
  2. Know your audience. If you are addressing your colleagues, your tone will be much different than when addressing CEOs of competing businesses, for example. Just because you feel comfortable with your audience, do not let your guard down too far. Remember that every word you utter could later appear on social media or in some blogger’s post, either in or out of context.
  3. What steps can the audience perform when they leave your talk that can help them implement action to your theme? Maybe they can meet with their current broker or hire a risk management consultant. Perhaps business owners should explore higher deductibles or other premium cost-saving measures. Anyone can regurgitate statistics and dry, “Rates are expected to increase six percent in the commercial property sector in 2015.” Provide action steps for your audience as a takeaway from your talk and watch their interest grow.
  4. How do you want your audience to feel after your talk? Open your talk with some humor and close with a laugh, as well. If you’re just not funny, find a funny meme like Dumbpoodle or make one yourself. Never let your audience walk away feeling gloomy. Audiences rarely remember content — they remember how you made them feel.

By taking these four steps each time you prepare a speech or even informal talks to your staff members, you will find preparation easier and your talk much more effective.

Tips to avoid a dryer fire

dryer
Dryer hoses. Use a metal one as shown.

How safe is your dryer? According to the US Fire Administration (USFA), about 2,900 dryer fires occur each year in the United States. These fires caused five deaths, about 100 injuries and over $35 million in property losses annually. While the leading cause of dryer fires is accumulated dust, fiber and lint, the type of exhaust hose you install can greatly reduce your risk of fire.

Using a plastic or vinyl dryer hose can cause fires, according to the USFA. The photo shows in the top half the type of dryer exhaust hose you should use. If you are currently using the bottom type, a plastic hose, replace it immediately. These types of hoses can melt or ignite.

It’s always a good idea to take a few other preventative measures. 1) Clean your lint filter after each cycle. 2) Install a smoke alarm in your laundry room or adjacent to your dryer. 3) Never leave the dryer running when you’re away from home. 4) Never vent your dryer anywhere except directly outdoors. Venting into an attic or soffit is a recipe for fire and violates most local fire codes.

The average cost of a dryer fire if it’s contained to the room of origin ran just under $1,800 in the past few years, according to USFA. However, dryer fires that spread beyond the room of origin had an average cost of just over $49,000. Money is only part of the equation if a dryer fire breaks out in your home, however. Who can put a dollar value on the injury or death of a loved one, or the death of a beloved family pet, should a fire break out?

For further information on dryer safety, visit this link National Fire Protection Association link.

 

How Do I Write a Professional Bio?

Every insurance professional should develop several professional biographies. Why a bio? Because despite our increasing reliance on electronic communications, people still want to know a little about you before they contact you. Your bio is a marketing tool that helps to build your brand. Your brand is your name and the name of your company. When people consider insurance, you want your name to be the one that comes into their minds. This can only come through repeated branding of your name, or the name of your agency, with insurance.

Here are the top reasons to write your professional bio.

There are thousands of insurance agents and other insurance professionals for people to choose from, plus growing competition from direct writers. Therefore, it is imperative that you set yourself apart from the crowd. A professional bio quickly showcases your experience and sets you apart from the crowd.

A bio is the quickest way to say, “Insurance is not just a job; insurance is my career and I am proud to be an agent.”

A bio will introduce you to new clients and potential strategic partners. Your bio can open doors to many new opportunities.

You can use your bio to obtain speaking engagements and media appearances. Perhaps you might author an article for a local newspaper on some aspect of insurance. Maybe you could be a guest on a local radio talk show. Perhaps you may give a talk at a local service organization. The bio opens the door to all this and more to help you build your brand.

Your bio can provide a dash of personal information that helps people relate to you in some way. This builds bridges and encourages people to contact you.

Have at least two bios on hand. One should be short, so pick the key points in your personal life and your career that provide the best flavor of who you are. A longer one can take a deeper dive into your background and you can use it for speaking engagements and in responses to requests for proposals. Once you write your bio, you can use it again and again, or revise it as your career deepens and your expertise grows.

If you or your team need help creating a bio that works for you, feel free to contact us at Insurance Writer.

Expressing Professional Gratitude

Today, though, I urge you to take a moment to contact a person in your career for whom you are grateful, either past or present, and say, “Thank you.”

This year my women’s group, which has been meeting once a month for our third year, is reading and discussing a book by Amanda Gore, The Gospel of Joy. I heard Ms. Gore speak at a teleconference last year and her highly personal presentation really hit my core beliefs.

Her book is perfect for a study group since there are twelve chapters in the book, one for each month. Each chapter explores a different spiritual principle, for example, listening, laughter, hope and gratitude. Gratitude has always been my struggle. I sometimes say, “My glass isn’t only half empty; it has a hole in it.” In other words, I have to work to stay grateful.

One of the questions in her gratitude chapter hit home with me. It asked, “Did your parents’ behavior model gratitude?” I can easily say that, “Yes,” their behavior did. Both my parents were independent insurance agents and both people of strong faith. My father, a Lutheran, served in his church as a council member and all-around fix-it guy. My mother, a more reserved Catholic, quietly put her faith into action by volunteering for years at the Westside Food Bank. Their motto in business was “Service before self” and while they were very successful insurance agents, they never let profit interfere with doing the right thing.

I grew up with three older brothers and one of us, usually me or my brother, Ted, was always wrecking a car. (I was quite sure my father owned an interest in the local body shop he insured.) After our accidents, my father would assess the damage then quietly say, “Everything happens for the best.” Frankly, at the time I thought he was slightly mental.

“Dad,” I finally asked when my brother ran his Mustang into a ditch at the end of our street, “How can a car accident ‘be for the best’?”

“Perhaps this minor accident where no one was hurt saved him from a major collision. After all, cars we can fix. You and the boys are irreplaceable.” Dad could always put things into perspective for me. I am so grateful for the wonderful lessons my parents taught me.

This story leads me to my topic – professional gratitude. There are so many insurance gurus who have mentored me over the years, from one of my first bosses at Commercial Union – who predicted, “Ms. Germond, in five years you will be a claim manager,” and I was – to the many risk managers who helped me when I was a fledgling risk manager, never an easy job.

Over the years I have trained and mentored my share of risk and claims professionals. Rarely do they thank me. I’m not dismayed by this; I rarely think of it because at some level, I am sure they are grateful but unaccustomed to expressing gratitude verbally. Today, though, I urge you to take a moment to contact a person in your career for whom you are grateful, either past or present, and say, “Thank you.” I guarantee you: This will mean a great deal to him or her. 

As many of you know, for years I have alternated between running Insurance Writer full time and working more directly in the insurance industry. I just couldn’t stay away from a challenge. But I also know there is more to life than a paycheck. This year, I’m putting it all on the line to branch out, utilizing my God-given gifts to provide specialized services to the insurance industry.

If you’re interested in learning more about Ms. Gore, here is a link to her YouTube channel. If I can help you, these are some of my areas of specialty:

  • Copywriting, including White Papers, advertising copy, articles, ghostwriting and blog entries
  • Consulting with small-to-medium sized businesses to reduce losses and improve workers’ compensation programs
  • Curriculum development and on-site training, including:
    • Customer service training
    • Workers’ compensation claims management training
    • CGL coverage training
    • Business auto training
    • On-site Associate in Claims training
    • Miscellaneous management training

Please feel free to contact me at (602) 870.3230.

 

Why Does My Insurance Company Hate My Dog?

It’s time for the insurance industry to wake up and smell the dog food. A more nuanced approach to pet underwriting is a win/win for the industry and for pet lovers everywhere.

dog liabilityProperty Casualty 360 and other industry magazines report escalating dog bite settlements. The industry is moving to endorsements and policy language to exclude canine liability. Why doesn’t the insurance industry take a more analytical approach to underwriting household dogs? As dog trainers will tell you, aggression is not breed-specific. Almost any dog improperly socialized, or with dog aggression in its line, will bite. I’ve seen American Kennel Club-elite Labradors, one of the friendliest breeds, that will take a chunk out of you, and German shepherds that wouldn’t bite you if it would save their own or their master’s life.

Rather than deny coverage by breed, why not partner with the American Kennel Club (AKC) and use the Canine Good Citizen program as an underwriting guideline? The Canine Good Citizen must pass 10 temperament tests – for example, allowing a stranger to approach, demonstrating a lack of dog aggression (very important since so many people get bitten when their people-loving dogs tangle with other, not-so-dog-friendly pooches), and the dog’s reaction in a crowd. Evaluators are available in hundreds of locations throughout the United States.

People who love their dogs would happily dole out the small cost associated with their dog’s evaluation rather than face no insurance. This is not a blanket endorsement of the American Kennel Club. However, their Canine Good Citizen certification is a strong indicator of Fido’s friendliness and steady temperament.

The insurance industry has always adapted coverage to meet the needs of a changing society. Dog ownership is not changing; in fact as crime rates escalate, more Americans turn to dogs for their safety. Underwriters do not understand canine temperament. Instead, there has been a knee-jerk reaction to exclude one of our home’s best protectors against burglars, and many Americans’ best friends. Simply, insurers refuse to take a more nuanced approach to underwriting dogs. Using the Canine Good Citizen is a solid approach instead of a blanket exclusion by breed. It might take some time to develop the partnership with the AKC, but in a previous discussion I had with a staff member at the AKC, they are eager to help. 

Americans love their dogs. And dogs will not go away. Instead, more owners will deny they own an excluded breed and insurers will be stuck in coverage battles that will do nothing to further the industry’s image. Additionally, messing with America’s best friends will do nothing to improve the industry’s always struggling image.

It’s time for the insurance industry to wake up and smell the dog food. A more nuanced approach to pet underwriting is a win/win for the industry and for pet lovers everywhere.

 

What Does 2014 Hold for Insurance Rates?

With 2014 rapidly approaching, contact your broker or consultant now to discuss steps you can take to reduce your 2014 commercial premiums.

What can you expect for property and casualty insurance pricing in 2014? Expect some increases, but watch for significant decreases in at least one line of insurance. According to Willis’s recently published Marketplace Realities 2014, new capacity is flooding the market from “as widespread as China and Omaha.” New capital supply offers a more “inviting marketplace,” Willis executives believe. Others insurance experts across the U.S. agree. Here is what to expect in 2014.

Primary and Excess Casualty

Do not expect huge decreases in casualty prices even with “abundant” capacity and “new market entrances,” according to Willis and other experts. With the loss of the federal terrorism backstop looming in December 2014, carriers hesitate to write exposures with large risk concentrations. Underwriters are also avoiding manuscript endorsements, relying more heavily on Insurance Services Office (ISO) language. Standard ISO language has more court decisions behind it, which equates to more predictable loss experience for underwriters to base their rates, many believe. Willis predicts casualty pricing to increase two to 10 percent in 2014.

Auto and Fleet

Auto liability continues to challenge fleet owners nationwide. Experts predict auto liability pricing increases between two to 10 percent. Underwriters are imposing higher retentions on risks with large fleets, heavy trucks or poor loss experience. Carriers like ACE offer auto liability buffer limits, coverage outside the working layer when primary limits do not meet umbrella attachment points.

Workers’ Compensation

There are several emerging issues in workers’ compensation. With the Affordable Care Act expected to bring new insureds into the healthcare system, expect strains on the work comp system. This will put pricing pressure on workers’ compensation premiums. While experts predict that earlier treatment for comorbidities will benefit workers’ compensation experience, we predict this will be a long-term benefit. In the near term, Willis predicts work comp rates will increase from 2.5 to 10 percent. The exception is California, where employer can expect rate increases of up to 20 percent.

Employment Practices Liability (EPL)

Adverse claims experience is placing upward pressure on EPL coverage. Entities domiciled in certain California counties may find themselves unable to obtain coverage, Willis predicts. While overall capacity remains “abundant,” there are no new EPL carriers entering the market. Pricing overall will be flat to a 10 percent increase, with private, nonprofit and smaller employees predicted to face up to 15 percent increases. The Equal Employment Opportunity Commission continues its aggressive enforcement plan despite some staggering trial losses for the EEOC in 2013. There is no time like the present to explore ways to decrease your EPL risks and avoid EEOC scrutiny.

Cyberrisk

When Cyberrisk gets its own page in a white paper discussing rates, you know it is a hot topic among insurers and risk managers. There were more than eight hacking incident per day in the US in 2012 according to the report. With increased security concerns, coverage is now a “must have” for many organizations. Calling the market for stand-alone Cyberrisk “active,” Willis predicts rates will remain competitive. If your firm has had losses, however, Willis predicts slight changes — between -two to five percent overall. There are many new Cyberrisk buyers in the marketplace and pricing for first-time buyers remains competitive. If you outsource your data to cloud vendors, underwriters will review your existing contracts. Your indemnification language will be a critical factor in underwriting your risk.

Directors & Officers (D&O)

Price increases are moderating with pricing expected to be flat to a high of 20 percent for financial services firms. Homeowner and condominium associations as well as educational institutions should expect premium increases. One carrier has indicated a willingness to provide “mega limits” for Side A coverage, which protects executives against claims not indemnified by the corporation. The non-traditional money that is now flooding the insurance industry may lead to downward pressure on D&O pricing in 2014, Willis contends.

Property

We saved the best news for last. With loss ratios hovering between 75 and 85 percent for many property insurers, Willis and other insurance experts predict a big decrease in property insurance pricing. In non-catastrophe exposed risks, expect a 10 to 12.5 percent decrease in pricing. For cat-exposed property, Willis predicts smaller decreases of between five to 10 percent. Any port in a storm, right?

With 2014 rapidly approaching, contact your broker or consultant now to discuss steps you can take to reduce your 2014 commercial premiums.

Cavalcade of Risk #192 Gallops Into View

Cavalcade of Risk #192 gallops into view with some interesting risk-related posts and great advice from various risk experts in their specific fields, from life insurance to enterprise risk management.

expert

 

Excuse the slightly tongue-in-cheek lead-in, because this week’s Cavalcade of Risk is full of great risk management information. We visit a variety of risk management experts for their take on current events impacting their practices. Take a few minutes, grab a cup of coffee and visit and interact with our contributors.

In this post, Dr. Sidorov looks at a recent scientific study that examined national insurance data to determine what happened to the commercial health insurers in the wake of the Obamacare rule that they spend at least 80 to 85 percent of their income on medical care. It turns out that the most vulnerable part of the health insurance market-individual insurance-saw a decrease in profitability.

Jeff Rose helps us through the maze of medical conditions that can limit your ability to buy health insurance in his post. If you have an aortic valve disorder like aortic stenosis or aortic insufficiency, these conditions will impact you when you apply for life insurance. Insurance companies are very cautious about aortic valve disorders because of their potential to cause serious heart problems. There is hope, however. Jeff informs us you can still get insurance despite your condition. It really depends on a few factors, including the seriousness of your condition. To get a better idea of what to expect, read his guide to insurance underwriting for aortic valve disorders.

Here’s a news flash: If you are uninsured, there is a risk of being overcharged for hospital services. In California, the risk is 0. Jason Shafrin of The Healthcare Economist explains why here.

Recently, there have been some remarkable changes in how life insurance is now underwritten, including the use of social media and new technology. Henry (Hank) Stern of InsureBlog has the details.

Julie Ferguson of Workers’ Comp Insider isn’t talking scratch when she asks: “How much risk do you want to take with your kids’ chicken nuggets?” Chickens are on the front burner on the legislative circuit lately with the USDA seeking to overhaul poultry processing regulations that many see as unsafe for workers. But Julie notes that there is more than just worker safety at stake. Read her fast take on fast food here. I would have said, “Winner winner; chicken dinner.” Except after reading her post, and watching the video, I may go vegan. Soon.

David Williams of Health Business Blog says that a patient advocate tells him that it’s “dangerous” to rely on online doctor ratings and reviews and to rely on the “facts” instead. David argues that the case against reviews is seriously overrated and the proposed alternative paths are not as promising as they sound. Read his comments here. I have to admit, I’m a big believer in Yelp and a frequent Yelper myself. I don’t go out to dinner without checking Yelp, let alone try to find a service provider, doctors and dentists included.

Here are some closing thoughts from yours truly regarding the trends I and other risk management experts throughout the US are currently seeing.

  • Enterprise risk management is becoming increasingly important to organizations.
  • Jury verdicts continue to rise. Check your liability limits and double check your policies to determine if you have defense inside or outside limits. Most professional liability policies provide defense within limits, and defense costs can erode your limits significantly.
  • Workers’ compensation costs have moderated in a few states; however, don’t expect to see rates decrease anytime soon, like never. Medical costs continue to escalate nationwide, outstripping wage loss benefits paid.
  • Cyber risks continue to be the bane of businesses at home and abroad; however, hackers increasingly target small-to-medium sized businesses because they seem to provide the path of least resistance to hackers.
  • Commercial insurance prices increased by six percent in the second quarter of 2013, the 10th consecutive quarter of price increases, according to a recent survey conducted by Towers Watson. Now is the time to bulletproof your risk management practices and consider increasing your deductibles or taking higher self-insured retentions.

This does it for another edition of Cavalcade of Risk.

Take the Associate in Claims Class AIC 37 Online and Earn Your AIC Designation

I’m teaching the revised curriculum for The Institutes Associate in Claims Class, AIC 37, Managing Bodily Injury Claims, for Prepacademy, an on-line learning organization that provides an outstanding way to prepare for and pass your exams.

It’s not too late to join us! I’m teaching the revised curriculum for The Institutes Associate in Claims Class, AIC 37, Managing Bodily Injury Claims, for Prepacademy, an on-line learning organization that provides an outstanding way to prepare for and pass your exams.

We began last night, but have a week breather. Our next AIC 37 class covering Chapter 2 starts on Thursday, September 26. It’s not too late for you to join. You can also listen to the recording from Chapter 1 to catch up before our next class. For more information about this exciting web-based training opportunity, click this link.

We’re just winding up the Workers Compensation portion of the AIC. Prepademy is a convenient and easy way to successfully study for your Associate in Claims and other Institutes designations.

Journalists Covering Insurance can Benefit from Free Handbook

The Insurance Information Institute offers a free, 200-plus page handbook for journalists who cover insurance. It’s available as a free download at this link. While it can be hard to understand the intricacies of insurance jargon and how the industry operates, this guidebook answers many questions and provides a handy reference to various organizations who can assist journalists with more information.

Cut Rate Auto and Homeowners Insurance May Cost You

Cut rate auto and homeowners insurance may cost you big in the long run.

You no doubt frequently receive solicitations and ads from insurance companies promising to save you money on your auto or homeowners insurance. Most consumers are looking at each expense they pay to cut costs. However, buying cut-rate insurance may cost you much more in the long run.

Insurance is your first line of defense against life’s calamities. After a loss, these are just a few of the problems a good insurance company can help you solve.

  • Provide prompt and courteous service year round after a loss.
  • Provide knowledgeable adjusters who can assist you in making important post-loss decisions.
  • Find a top-rated repair shop to repair your damaged car.
  • Promptly and conveniently provide a replacement vehicle while your vehicle is in the shop if you purchased rental coverage.
  • Pay for a similar alternative living space if you are unable to occupy your home after a loss.
  • If you are sued after a loss, provide a strong defense with excellent legal counsel.
  • Provide prompt board-up services after a loss.
  • Help you locate a trustworthy contractor if your home or roof is damaged.

Cut-rate insurance carriers cost less because they generally provide fewer services and less coverage. The decision to purchase insurance should go beyond price. Protection for your home and family after a loss is priceless.

Several of my friends have recently been involved in auto accidents and found themselves lacking rental reimbursement coverage and gap coverage. Gap coverage helps make up the difference between a totaled new car and its depreciation if the vehicle is damaged while the owner is still “upside down.” A good independent insurance agent can help you avoid these necessary coverage gaps. 

Don’t get suckered into buying insurance solely based on the lowest premium. If you have a loss, cheapest may cost you.