The following article has been contributed by Christian Waeldner, vice president of crisis management at Starr Companies, and Reggie Gibbs, managing underwriter for security risks at Starr Companies. The views expressed within the article are not necessarily reflective of those held by Insurance Business.
While most business crisis claims are related to product recall and other commercial operations, coverage for incidents relating to workplace violence is an important protection frequently missing from standard commercial insurance policies.
How prepared are people, companies and organizations for an act of workplace violence that leads to death or injury? It’s a difficult exposure to manage, particularly when you consider that, despite pretty good forecasting, we already have a tough time managing natural disasters. It’s imperative that companies have a plan to deal with workplace violence that includes prevention and response.
The hospitality industry, including restaurants and hotels, is vulnerable to workplace violence risks because of the social nature of the sector and the probability of there being large congregations of people all in one place. The National Safety Council’s Injury Facts 2016 lists data for workplace violence-related deaths and injuries resulting in days off work across various occupations. Statistics from 2013 shared in the report state the leisure and hospitality industry experienced 2,380 injuries and 107 deaths, behind only the retail sector (2,680 injuries and 127 deaths) and government (37,110 injuries, 128 deaths). It’s a serious exposure that needs addressing.
“Over the past decade, there has been an increase in these types of incidents,” said Reggie Gibbs, managing underwriter for security risks at Starr Companies. “These attacks happen, and they happen consistently. That’s why businesses should be concerned about this. A business is likely to be held liable in some form or fashion when violence at their location occurs, regardless of whether the instigator is motivated by a grievance against the business, a grievance against an employee, or even some other reason — potentially political in nature. If they don’t have the appropriate coverage in place, negative consequences for the business can be expected.”
Beyond acts motivated by monetary gain, the most common types of workplace violence incidents involve attempted mass killings by an assailant who might be a disgruntled customer or employee, often called “active shooter” events. Another common type of violence at a place of business - known as “political violence” - stems from acts motivated by politics, religion or ideology. Acts of political violence often result in property damage as well as loss of life.
Preventing workplace violence
A zero-tolerance policy is an important tool in reducing the odds of a company being victimized by workplace violence. New and existing employees should receive written policies informing them that violence in any form, damage to company property, threats or intimidation will not be tolerated.
Careful applicant screening may also be helpful in preventing future incidents. Verifying applicants’ work history, qualifications and potential criminal background may help the company identify high-risk candidates.
Managers and business owners should also understand the warning signals that may indicate that an employee might become violent, such as threatening co-workers or supervisors, complaining about unfair treatment, slamming doors or equipment, and similar forms of inappropriate behavior.
Along with these tactics, businesses should also consider workplace violence insurance policies to cover unpredictable - and financially devastating - workplace violence events.
Scope of coverage for typical workplace violence policies
A traditional general liability policy will not necessarily cover patrons who may be harmed in an act of workplace violence. Workers’ compensation may — or may not — cover such incidents, depending on the state where the policy is issued. Traditional insurance products exclude workplace violence incidents or political/terrorist attacks. Terrorism is often excluded in general liability and property policies.
Modern workplace violence policies will cover two main perils: acts of violence using any kind of lethal weapon (including violence against employees and patrons) and political violence (acts of violence that can be traced to ideological thinking or religious beliefs), subject to definitions and limitations in the policy. Top-of-the-line workplace violence policies provide comprehensive coverage for workplace violence perils and threats that can severely impact a business’s operations and employees. They may also provide coordination for related and necessary consulting services to help a business restore operations following a covered event. Service highlights for some policies include post-event crisis counseling and medical care, public relations, security analysis and advisory services.
One big advantage of having a modern workplace violence policy in place is the crisis response component, which is included in many policies. A good crisis response team should help companies understand the threats to their people, information, property and reputation. It should also provide clients with the expertise to mitigate and manage security risks so that a business can focus on opportunities and meet objectives.
Essentially, there are four main aspects a crisis management team should take care of:
Active security measures
Training sessions designed to prevent and/or mitigate workplace violence incidents, including hands-on practice, is highly recommended for any business. Implementing security measures, such as an electronic badge system, helps prevent unauthorized persons from entering a facility. Business owners should also minimize the number of unlocked entrances and have a monitored reception desk, security cameras, a practiced response plan and an established communication protocol.
Good risk management is essential in a company’s risk profile — no matter the risk. Small and midsize enterprises, however, often don’t have a robust risk management plan for active shooter or political violence situations. Adding this type of coverage helps businesses enrich their overall risk management plan.
Having a crisis response component to a workplace violence product is vital. As a business owner, when a crisis occurs, you want things accomplished expeditiously, and you don’t want to keep going back to the insurer for approval. Companies should have an approved crisis consultant that offers all employees a crisis hotline. That firm will be on hand to assist with whatever the crisis is. The best products provide access to crisis consultants all over the world that can respond with political evacuation, medical transport, crisis management review and other interfaces that both reduce losses and help prevent them in the future.
Availability of additional coverages
A good workplace violence policy allows for the addition of coverages such as political violence, terrorism and cyberattacks.
“Acts of workplace violence are very costly and damaging to reputations and brands,” Gibbs and Waeldner added. “And if it’s happening in workplaces throughout the country, it could happen to yours. Look for a policy that covers gaps left by other liability policies your business carries or that serves as excess protection for coverage you already have.”