School shootings in the United States have become so ubiquitous that while legislators continue to try to "ban guns" – the effect of which has resulted in no meaningful legislation and seemingly no prevention of incidence – insurance companies like McGowan Program Administrators are stumbling onto an unfortunate realization: school shooting insurance is necessary and in demand. They have written over 300 of these policies already.
The Wall Street Journal reported in an article out on August 2 that local schools, private schools and some universities are starting to purchase what is called "active-assailant" insurance for peace of mind:
“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.”
If this insurance isn’t a direct byproduct of the growing number of active shooter incidents in the United States, it's probably also helped along by the media's intent to vigorously cover such incidents and harp on them for days, sometimes weeks, after they occur.
While the ideas of armed security in schools and better mental health checks to prevent such incidents continue to be written off by most mainstream politicians, schools and universities are faced with a brutal reality of having to assess the liability of an active shooter situation, should it occur, on their grounds.
As the Wall Street Journal noted, the cost for such incidents – which include not only things like funerals and counseling, but also liability from lawsuits - is enough to make these institutions want to consider this type of insurance.
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.
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 insurance is reportedly assigned a premium based on local crime statistics and the likelihood of an event happening at a particular institution, as well as student enrollment and staffing levels. The Wall Street Journal continued:
To set premiums, insurers consider factors including local crime data, student enrollment and district staff levels. They also consider what safety measures the schools have in place, says Mr. Marshall at McGowan. He also considers whether schools are monitoring social media to spot potential threats and if schools offer active-shooter awareness training to students and staff.
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.
The litigious nature of active shooter incidents can’t go understated, and was notably on display at its worst when MGM Resorts, the parent company of Mandalay Bay, recently preemptively sued victims of the Las Vegas mass shooting before they could have a chance to sue the MGM Grand.
The company - which not only owns Mandalay Bay but also owns the venue across the street from the hotel where most of the victims were gathered for a country music festival - is suing more than 1,000 victims of the shooting. The lawsuits were filed in federal courts in Nevada and California, which one attorney representing the victims decried as an attempt to find a judge they like, according to the Daily News.
"I’ve never seen a more outrageous thing, where they sue the victims in an effort to find a judge they like,"attorney Robert Eglet, who represented some of the victims, said. The attorney accused MGM of "judge-shopping" in federal court, rather than state court, where he believes any lawsuits should be filed.
"It’s just really sad that they would stoop to this level.” Eglet added that the lawsuit was "preemptive strike" to get the case heard in federal court instead of state court, which means MGM probably thinks it has a better chance of winning in federal court. He added that the decision is a "blatant display of judge shopping" that "quite frankly verges on unethical."
MGM told the New York Post that the Federal Court "is an appropriate venue for these cases and provides those affected with the opportunity for a timely resolution. Years of drawn out litigation and hearings are not in the best interest of victims, the community and those still healing."
The Vegas shooter, Stephen Paddock, killed 58 people and wounded more than 800 when he opened fire on Oct. 1, armed with dozens of weapons stashed away in his suite. Victims have filed lawsuits against both MGM and concert promoter Live Nation, accusing the companies of not having adequate security measures in place to stop the attack. While the company may have cobbled together a legal basis for its claims, perhaps the management didn't factor in popular outrage, which it is almost certainly going to face if the lawsuits proceed.
Perhaps this is why the insurance industry for schools and universities is burgeoning and growing, as was noted in the Wall Street Journal article:
“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.”
Until our legislatures get serious about being inclusive of all options to stop these types of events from happening in preparing citizens for such incidents in the future, this insurance industry may unfortunately wind up continuing to grow.