Filed Under:Markets, Commercial Lines

Concealed Weapons Can Make for Risky Business

Many states have passed laws allowing citizens to carry concealed weapons such as guns, knives, etc. The laws may not clearly distinguish situations where a citizen should not carry a concealed weapon—and that is the danger for the employer. Bodily injury or death caused by a weapon wielded by an employee on company property can leave the employer open to lawsuits based on various theories, and the question of insurance coverage then arises.

An employer that allows customers on the business premises has to provide a reasonably safe environment. Customers invited to enter the premises for purposes connected with the business conducted there are known as business invitees. The duty owed an invitee by the owner of the premises is to exercise reasonable care to keep the premises reasonably safe and to warn of all concealed dangerous conditions. In a state with a concealed-weapon law, should the customer assume the sales clerk waiting on him or her is armed, or must the store post warnings? Even if the local informed citizen could be presumed to know of such laws, what about a customer from out of state? No easy answers exist.

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If an employee carrying a concealed weapon negligently or deliberately shoots a customer who is legitimately on the business premises, and the employer is subsequently sued for the injuries suffered by the customer, will a Commercial General Liability (CGL) policy afford insurance coverage to the employer?

Of course, the employer has to be found legally responsible for the injuries in order for the CGL form to pay for such injuries. But, while the employer being liable is a debatable question, two facts are certain: the employer will most definitely be brought into any lawsuit by the injured customer; and the duty of the employer's insurer to defend the insured employer will be triggered unless there is some clear, unquestionable exclusion in the General Liability policy that would apply to the shooting incident. In most instances, the only possible exclusion that might apply is the “expected or intended injury” clause—but that is a reach. Unless it can be shown that the insured employer actually intended or expected the customer to be injured, this particular exclusion will not bar coverage. The exclusion has to be looked at from the standpoint of the insured, and even though the employee who did the shooting may have acted intentionally and expected the injury, this does not mean the insured employer gets saddled with the same intent.

Looking at this from the weapon-carrying employee's standpoint, consider an employer forbidding employees from carrying weapons to work. What if an employee is subsequently attacked and beaten at work? Can that employee then file suit claiming his ability for self-defense was impaired by the employer’s action? The injured employee would claim that he incurred bodily injury and that the employer was legally responsible for those injuries. The Workers’ Comp exclusion and the employers’ liability exclusion in the General Liability policy have to be considered, but if the injury to the worker is not work-related—that is, not arising out of and in the course of employment—the exclusions are not going to be applicable. In that case, the General Liability policy of the insured employer would respond with a defense since there is no clear-cut unambiguous exclusion in the policy to prevent such a response. But, of course, the duty to pay the claim would depend on the liability of the insured being established in a court of law.

Unfortunately, there is no end to the potential problems concealed-weapon laws pose for employers. It is not enough for insured employers to count on General Liability for insurance coverage under most circumstances. Sound risk management calls for preemptive action as well.

An employer can try to get an exemption from the scope of the concealed-weapon law (if one does not already exist) for the workplace, so that he has the authority to forbid weapons in the workplace. The employer can make it abundantly clear to all employees and potential employees that company policy forbids bringing weapons onto the premises. The employer can also conduct careful pre-employment screenings to make sure stable, sensible people are hired who do not try to settle disagreements with force.

Employers can live with concealed-weapon laws, but they create liability exposures that the prudent employer will not ignore.

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