As violence and mass shootings in American workplaces increasingly make the news, more and more businesses are taking added precautions to prevent acts of violence at their facilities, but they also face substantial costs if violence does erupt.
The Occupational Safety and Health Administration reports nearly 2 million people suffer from workplace violence every year, and the National Institute for Occupational Safety and Health estimates those incidents cost employers more than $120 billion.
While your workers’ compensation policy would cover treatment for any injuries your staff sustain during an event, it does not cover other risks, such as being sued for inadequate safety measures and any lost income you suffer from having to close your operations as police investigate. In the wake of any violence, a business owner may also consider hiring security, which also costs money.
Traditional property and casualty insurance policies very rarely cover acts of violence, active shooters or terrorism in the workplace.
Some of the costs that your existing policies wouldn’t cover include:
- Legal liability. If you are sued for negligence for not doing enough to prevent violence in the workplace, your company’s general liability policy would not cover any legal costs and judgments, as acts of violence are typically excluded from coverage. While employers usually prevail in these types of lawsuits because they often cannot have predicted what was going to happen, the company will still incur legal costs that can quickly run into the hundreds of thousands of dollars, which would have to be paid out of pocket.
- Psychiatric care for affected workers. Your workers’ compensation policy would cover any physical injuries that an employee sustains in a workplace violence episode, but what about the trauma suffered by any witnesses? Depending on the state, workers’ comp may or may not cover psychiatric injuries of being witness to violence.
- Business interruption. Often a business will be forced to close after an act of violence in the workplace as police conduct an investigation and employees are unable to work because they are shaken by the event. The business interruption portion of your business property insurance policy will not cover lost income during that time.
The answer
Fortunately, more and more carriers are introducing policies that do cover costs associated with these types of incidents: workplace violence insurance.
These types of policies are growing in number and they are usually purchased as an endorsement to an existing general liability policy, but there are also stand-alone policies.
While policies vary from carrier to carrier, they typically have these coverages in common:
- Legal liability coverage for expenses from lawsuits that may result from a covered event.
- Public relations counseling costs.
- Costs of psychiatric care for traumatized employees.
- Medical or dental care costs.
- Costs for temporary security measures the business may put in place after an event.
- Death benefits for victims’ families.
- Rehabilitation expenses for any injured parties.
- Business interruption expenses for an act of workplace violence or a stalking threat that results in the business shutting down afterwards due to a police investigation and if employees are too traumatized to work. It will usually cover ongoing operating expenses until the business can resume operations.
The takeaway
Be warned: workplace violence policies vary widely with regard to exclusions, terms and conditions. Also, some are narrowly written policies that exclude certain types of violent acts, the use of vehicles, and limited coverage of employees.
Comprehensive policies will cover everything from the human costs associated with injured people, to the intangible costs of restoring business operations and reputational damage.
Coverage limits can range from $1 million to $100 million on both primary and excess liability. Premiums start at around $1,800 annually.
Employers can often qualify for lower premiums if they have certain safeguards in place, such as on-site security measures and conducting employee drills and training so staff can know how to respond in case of an incident at work.
BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.
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