Learning how to examine a policy of insurance in light of a disastrous claim situation requires the same skills as any major loss or catastrophe. “Schools are locations where children and young adults should be exposed to positive learning experiences and relationships that last a lifetime. It is a place where they should feel completely safe and where good things happen,” writes James P. Smith, a retired deputy fire chief of the Philadelphia Fire Department, in the June, 2013, issue of Firehouse, a Cygnus publication for first responders. As claim adjusters are also among the “first responders” to any major incident, including school shootings, what Smith has to say applies to the insurance industry as well as firemen.
“Sadly,” Smith continues, “in addition to the increased occurrences of school violence imposed by one student upon another, or instances of gang activity involving shootings at schools, there are many random attacks against students and teachers. These shootings have changed some elementary, high school and college campuses from docile settings to shooting fields.”
“Due to these factors and the need to be fully prepared, responders must gain a better understanding of how to deal with these incidents. A thorough hazard analysis should be made of case study reviews to identify problems that occurred in incidents at other schools, anticipate the risk assessment needed if an incident occurs and define the possible need for multi-agency procedural changes to address any potential problems.”
It seems that hardly a month – sometimes only a week – passes without some new shooting or violence on a school or college campus. While Smith addresses the needs of the police, fire and EMT services as first responders, the same suggestions apply equally to those in the property and casualty insurance industry. As school, theater or other public area shooting can result in liability claims based on theories of failure to restrict access or lack of security, ultimately many of these events are uninsurable tragedies where the only applicable insurance may be a life or accidental death insurance policy or health insurance for those wounded in the attack. But when the attack leads to structural damage as well as injuries, property adjusters will necessarily be involved.
There is often little that the property and casualty insurance industry can do in response to a school shooting or other gun or bomb-related event. Physical damage to structures may be covered under property coverages, although “gun violence” is not a listed peril. In severe damages, riot or vandalism damage coverage may be applicable. Parents of a youth who is the shooter may be sued, but the act is an intentional one by “an insured person,” hence subject to the intentional act or expected injury exclusion. No reasonable casualty insurance company would write a policy that specifically covered the claims that might result from a youth bombing or shooting up a school and killing teachers and students. Adults who commit such acts often end their own life as a suicide, hence there is often no one to sue for the damages other than the school or college itself.
Nevertheless, property and casualty adjusters need to be aware of the potentials of such situations to create claims – whether or not covered. Any such claim must begin with a detailed and complete analysis of the coverages involved, keeping in mind that the courts will seek to find coverage where it is not specifically barred. This is the case for either property or liability coverages. Investigation and evaluation of every factor involved must occur, and must occur quickly before the matter ends up in extensive and expensive litigation. Insurance adjusters and claim attorneys cannot wait until the mourning process is complete before they start their examination of the coverage.
In the U.S., there seems to be a general “public opinion” or “feeling” that when something bad occurs, someone is to blame and someone must pay. In gun violence there often is someone to blame, but rarely does that someone have any ability to pay for the losses he or she created. At the same time, the public seems to take the position that Constitutional freedoms bar government from taking any pro-active loss prevention steps that might reduce the number or costliness of such gun-related events, including processes such as background checks, waiting periods on gun purchases, or barring the sales of military-style weapons that are capable of multiple killings within seconds. Is this an insurance issue, or just a political debate? Gun manufactures and sellers have been sued, but the impact of such litigation has been limited.
While an “occurrence” is generally defined in terms of “an accident,” when an insured person shoots someone or an insured organization or a homeowner “intentionally” hosts a party at which underage drinking is permitted and someone is injured or shot in a subsequent fight, the host’s insurer may not cover the resulting claims, the Wisconsin Supreme Court ruled in a claim under a homeowner’s policy. While a minority of the Court’s justices dissented, some on the basis that the party took place at a pole barn that was not on the insured’s property, the majority opinion serves as a warning in Wisconsin and other states that hosting a drinking party for minors, regardless of where it is held or who hosts it, is a hazardous thing to do.
While “fighting and gun violence” is not a specific training course in Crawford & Company Educational Services or KMC on Demand courses, analysis of coverage and liability issues that may arise from such violence is. Learn more about these and other valuable courses at KMCOnDemand.com.
Wisc.: Schinner v. Gundrum, 2013 WI 71, 833 N.W.2d 685, (Wisc. 2013)
This article comes from Take Note, the newsletter of Crawford Educational Services. You can subscribe here.