Active shooter tragedies spur insurance questions

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Question: A recent office conversation involved a discussion of coverage for a town or board of education after an active shooter tragedy.

Specifically, with regards to general liability coverage: Are there specific exclusions? An active shooter vs. an employee shooter vs. an outsider?

Is the event one occurrence, or is each student’s injury/death an occurrence that brings in deductibles and limits? Expected or intended from the AN insureds standpoint? From ANY insured’s standpoint?

What are your thoughts? Any narrative would be greatly appreciated.

— Connecticut Subscriber

Answer: When it comes to the expected or intended exclusion in the CGL form, the point is that it applies to THE insured that expects or intends the injury or damage. So, unless the superintendent/school board, or named insured expected or intended the BI or PD, that exclusion is not applicable to the named insured.

Negligent supervision does not equate with intent. Unless the named insured/owner wanted the shooting to occur and urged it on, there is no intent or expectation on the part of the insured and the exclusion is not applicable.

If the shooter is an employee, there is coverage for the owner of the place, unless he intends for the employee to shoot the students. The employee may very well be on his own, but his actions are not going to affect coverage for the owner unless the owner wants and expects the employee to injure the students or fellow employees.

As for the issue of whether the shots are one occurrence or several, the court in American Indemnity Company v. McQuaig, 435 So. 2d 414 (Fla. App. 1983), held that the injuring of two deputies with three shotgun blasts by the insured constituted three separate occurrences for purposes of the insured’s homeowners liability coverage.

The police officers were attempting to convince the insured to surrender when he began shooting at them. The first officer was hit, a minute later another blast injured both officers, and a third, 45 seconds later, injured the second officer again. The insured’s liability policy provided $100,000 coverage, per occurrence. A claim was filed by one of the officers, and he was paid $100,000 by the insurer, who then denied any further liability. The second injured officer asked the court for a determination of whether this payment exhausted the insurer’s obligation.

The Florida court of appeals ruled that the question involved was whether “there was but one proximate, uninterrupted, and continuous cause which resulted in all of the injuries and damages.” The insurer contended there was one occurrence, because the injuries were caused by one instrument of danger, the shotgun, and occurred in one very specific location in one brief time period of less than two minutes. Further, the insured’s insanity was the single proximate cause of injury.

The court ruled against the insurer. “While it is true that but for his insanity, [the insured's] act would have been intentional and therefore excluded…  it does not follow that his insanity was the proximate cause of… injuries. It is clear that the proximate cause of [the first officer's] injuries was the shotgun blasts which struck him and the proximate cause of [the second officer's] injuries was the blasts that struck him. Under the cause theory, there was not one proximate, uninterrupted and continuous cause which resulted in the injuries and damages but rather three separate causes.” The court held there were three occurrences, and therefore, three $100,000 per occurrence limits.

In a recent decision out of Hartford Connecticut, a judge cited government immunity and dismissed a lawsuit brought by the parents of two children killed in the Sandy Hook massacre. The lawsuit alleged that the school had taken inadequate security measures. The parents claimed that the school officials failed to follow security procedures, including immediately ordering a school lockdown when the shooter entered the building. The parents noted that the doors could only be locked from the outside, making it impossible for teachers to lock the doors and keep the shooter out of their classrooms. The judge noted that during a fast moving, volatile, emergency situation, the tragedy at Sandy Hook lasted less than 5 minutes, the individuals in authority need to have the opportunity to use their best judgment in how to respond to the emergency, and that the tragedy was caused solely by the shooter, not by the actions of the school officials.

Clearly this issue is one that is becoming increasingly relevant as more and more of these tragic incidents occur. There are a few companies that are creating their own style of insurance policies for active shooter incidents, the initial focus of which is making the victims whole before dealing with liability and legal action. Until there is litigation on more of the issues presented in the question, though, there is no precedent.

See also:

3 ways companies are responding to active shooter threats

3 ways to improve your active shooter preparedness and response