Many states have passed laws allowing their citizens to carry concealed weapons, and the National Rifle Association (NRA) seems intent on having state legislatures pass laws empowering citizens to shoot first and ask questions later. While such laws may make legislators feel good and some citizens feel safer, questions about liability exposures for insured employers pop out like the crack of a rifle shot.

If an employee, carrying a concealed weapon as permitted by state law, shoots a customer or a fellow employee and the employer is subsequently sued over the incident, will the general liability policy afford insurance coverage to the employer?

What if an employer learns that an employee has a weapon at work, decides to seize it, and holds the employee in a room awaiting security or the police? Is this false arrest or imprisonment (an injury covered by the standard CGL form)?

What if an employer forbids an employee from carrying a weapon to work and the employee is subsequently attacked and beaten on the work premises? Will the general liability policy of the employer offer a defense and/or indemnification when the employee files a lawsuit claiming his ability for self defense was impaired by the actions of the employer?

Maybe, Maybe Not

Of course, general liability coverage is based on the insured being legally liable for causing the bodily injury or property damage, and it may be that the employer in these instances is not liable due to state law or some other point of law. But two facts are certain: the employer will most definitely be brought into any lawsuit filed by an injured person, and the duty of the employer's insurer to defend the insured employer will kick in unless there is some clear, unquestionable exclusion in the general liability policy that would apply to the shooting incident.

So, leaving the question of liability to the legal system, let's look at the question of insurance coverage and exclusions. If a customer is shot and injured on the insured's work premises, the only possible exclusion on the general liability policy that might apply is the expected or intended injury exclusion. But this is a stretch. Unless it can be shown that the insured employer actually intended or expected the customer to be injured, this particular exclusion will not prevail against coverage for a claim against the employer. 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.

What about a fellow employee being shot? There is, of course, workers' compensation to consider, but this benefit is intended for injuries arising out of, and in the course of, employment. Whether being shot by a fellow employee is injury arising out of, and in the course of employment, is for workers' compensation bureaus and courts to decide. But if it is decided that there is no causal connection between the injury and the employment, the general liability policy of the insured employer will apply to a claim against the employer.

Again, unless it can be shown that the employer expected or intended the injury to occur, there is no exclusion to prevent coverage for the insured employer if and when it is brought into a lawsuit by the injured worker or his estate.

But What If?

Of course, an insurer could claim that since the insured employer knew the employee had a concealed weapon at the workplace, the insured should have known or expected a shooting might occur. And if the employer knew that the pistol-packing employee had a violent temper and a history of physical confrontations with fellow employees and customers, it strengthens the argument. But, just because all this is known to the employer is not proof that the insured expected or intended the injury to occur. The assertion of an exclusion to deny coverage requires the insurer to prove that exclusion's applicability. Until that is done, the duty to defend and pay damages remains intact for the benefit of the insured employer.

What about the liability exposure if the employer seizes the concealed weapon and holds the employee for security or the police? When the employee files a lawsuit claiming false arrest, detention, and imprisonment, will the general liability policy of the employer ride to its defense? There is the issue to consider of whether or not the insured committed a false arrest or imprisonment, but that involves legal squabbles over the definition of false arrest and whether the concealed weapon law allows the employee to carry the weapon on the workplace premises. These are legal issues that cannot be settled here. But if the legal basis of the claim of false arrest against the insured is upheld, the employer will look to its general liability insurance policy for coverage.

The standard CGL form will pay those sums that the insured becomes legally obligated to pay as damages because of a personal injury, a term defined in the liability policy to include false arrest or imprisonment. However, that coverage is excluded if the injury caused by the insured comes with the knowledge that the act would violate the rights of another. So if the insured knew that state law allowed the employee to carry a concealed weapon onto work premises but still seized the weapon and put the employee in custody, a strong case could be made that the insured knowingly violated the rights of the employee. It is true that most concealed weapon laws allow employers to forbid employees from carrying a weapon to work, so this knowing violation of the rights of another exclusion may not be applicable. But the situation does require the insured to be familiar with the wording of the concealed weapon law.

To Pack or Not

This leads into the question of what happens if an employer forbids an employee from carrying a weapon to work, and the employee is subsequently attacked and beaten at work. If the employee then files a lawsuit against the insured employer claiming that his ability for self defense was impaired by the employer, that the action of the employer caused or resulted in the employee being injured, how will the insured's general liability policy respond?

The injured employee would claim that he incurred bodily injury, and that the employer was legally responsible for those injuries. 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.

Dos and Don'ts

So concealed weapon laws can paint a bull's-eye on the backs of employers. And it is not enough that the insured employer can count on the general liability policy for insurance coverage should liability be established. Sound risk management calls for preemptive action.

For example, an employer can attempt to get an exemption from the scope of the concealed weapons law (if one does not already exist) for the workplace, so that the employer has the authority to forbid weapons on the premises. The employer also can make it crystal clear to all employees and would-be employees that company policy forbids bringing weapons onto the premises. The employer also should conduct careful pre-employment examinations to make sure stable, sensible people are hired, people who do not try to settle disagreements with force.

Employers can live with concealed weapon laws, but the laws do create liability exposures for the employer, exposures that should not be ignored.

Special Reports /

Concealed Weapons and General Liability

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