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Advisen Front Page News - Friday, August 3, 2018


Dow Jones

More schools are buying 'active-shooter' insurance policies
More schools are buying 'active-shooter' insurance policies
Publication Date 08/02/2018
Source: Dow Jones News Service
By Tawnell D. Hobbs 

School administrators consider the likelihood of a shooting real enough that some districts are buying active-shooter insurance.

The coverage, also called "active-assailant" insurance, gained traction in the past year, following several mass shootings. Schools use it in hopes of avoiding litigation and offsetting costs for counseling services, crisis management and added security after an attack.

"It at least gives us some peace of mind that, in the event of horrible tragedy, we can begin to put things in place," said Lance Erlwein, treasurer of Belpre City Schools, a district of 1,000 students in southeastern Ohio, which purchased a plan last year that includes a $25,000 death benefit per victim and trauma counseling. "Fifteen years ago who would have ever thought you would need something like this. It's awful that schools have become the target."

After a mass shooting at a school, it isn't unusual for victims and grieving family members to file lawsuits against a school district alleging negligence, including for matters such as failing to provide adequate security or missing warning signs of a would-be-shooter.

After the February mass shooting at Marjory Stoneman Douglas High School in Parkland, Fla., 15 survivors filed a lawsuit in U.S. District Court of the Southern District of Florida in July against several parties, including the school district's superintendent, law-enforcement officials and Broward County. They seek monetary damages to be determined by a jury and attorney fees for alleged failures to protect students at the school.

More than 150 children and adults have been killed in school shootings since 1990, according to a Wall Street Journal review. Scores more were either injured or traumatized by the incidents.

Insurance underwriter McGowan Program Administrators, an Ohio-based leader in shooter insurance, has written over 300 active-shooter/workplace violence policies for school districts, charter schools, private schools and universities across the country since 2016, when it started offering the coverage. A company official said the company issued over 60 policies in July, and that it has paid out some policies.

Shooter insurance is considered gap coverage, handling expenses not typically covered under general liability, such as funeral costs and death benefits. Annual premiums can range from about $1,800 for $1 million in coverage for small school systems to about $175,000 for $20 million in coverage for larger ones. Death benefits often are offered up to $250,000 per victim.

"There's burgeoning demand for this product," said Robert Hartwig, director at the Risk and Uncertainty Management Center at the University of South Carolina, which focuses on risks facing organizations. "If you're a risk manager for a school district, you have to look at it with the same eye that you might look at coverage for a tornado. We live in a very litigious United States."

George Mocsary, an associate professor at the Southern Illinois University School of Law, said the insurance is priced too high for something that has a "extraordinarily low" chance of happening. The odds of a student in K-12 public school getting killed or injured in a multivictim shooting are about one in 4.8 million a year, compared with one in 700,000 a year of getting hit by lightning, Mr. Mocsary said.

Schools typically carry general liability insurance to cover claims stemming from negligence that results in personal and physical injury, death or property damage.

The School District of Indian River County in Vero Beach, Fla., pays an annual premium of $20,909 for a $3 million policy, which includes a $250,000 per person death or injury benefit after a shooting or other violent act. The insurance covers the district's schools with 15,000 students and employees. Charter schools aren't covered.

"We're really answering the question, 'Who's going to take care of the victims?' " said Paul Marshall, managing director for McGowan's Active Shooter/Workplace Violence Insurance Program.

Last year, the insurance company for Marysville School District No. 25 in Washington state settled a lawsuit for $18 million filed by the families of victims in a school shooting that left four students dead and a fifth critically injured. The lawsuit was settled using the school district's liability coverage.

The question of whether to obtain shooter coverage can be sensitive for districts. Some school districts declined to discuss their insurance plans or provided limited information.

Broward County Public Schools, which includes Stoneman Douglas High School, said in an email that the district didn't have active-shooter coverage before February's mass shooting. The policy is something that has been and continues to be considered, it said.

Write to Tawnell D. Hobbs at