Today's gun tragedies prompt wide search for liable parties By Joseph S. Harrington, CPCU
For good reason, the property/casualty insurance business has sought to stay out of America's debate over gun violence, and to avoid being assigned a role in addressing a problem it didn't create and can't correct on its own. The reasoning is that no one can be insured for intentional harm to another (except in self-defense) and that accidental gun injuries and fatalities are rare enough to be insured under existing parameters of coverage.
The ability of P/C insurers to steer clear of exposure to gun violence is being tested in the aftermath of mass shootings, however.
After the memorials conclude and the cameras depart, victims and their families are left to search for parties to sue for compensation. The result is a widening circle of potential claims triggering defense and indemnity coverage for insureds who themselves may have been victimized by an attack.
Obvious but Empty Targets
First on the list of likely defendants would be a guilty perpetrator. If he has any assets, they will be divided among the victims, providing each with very little in compensation. In only one reported case, the Las Vegas shooter, did the perpetrator have substantial personal assets (estimated at about $5 million), which amounted to only a small fraction of the damages for the fifty-eight people killed and hundreds wounded in his rampage.
If the perpetrator of a mass shooting has personal liability coverage similar to that provided in a homeowners policy, it is virtually certain that coverage for a hostile act is precluded by an "intentional injury" exclusion. Even if a negligence claim against another insured is used to trigger the coverage, the liability limit is likely to be insignificant compared to victims' losses.
Second on the list would be those who provided the firearm, but if they followed the law when selling the weapon, they will probably not be targets of lawsuits. Arms merchants are protected under the 2005 Protection of Lawful Commerce in Arms Act (PLCAA), a federal law providing civil immunity to arms merchants for the illegal use by others of firearms made and sold legally.
If initial media reports are correct, the manufacturer and seller of the AR-15 semiautomatic pistol used in the Boulder, Col. mass shooting of March 2021 complied with all legal requirements when selling and transferring the weapon to the alleged perpetrator.
Where to Turn?
So where do the families of victims in Atlanta, Boulder, and a depressingly long list of American communities turn for compensation?
If they follow the lead of the victims of the Marjorie Stoneman Douglas High School shooting in Parkland, Fla., they may sue the household of the perpetrator and any social services agencies that might have dealt with him.
If they follow the lead of the victims of the Las Vegas and Aurora Theatre shootings, they may sue owners of the settings where the acts occurred. If they follow the lead of victims of the school shooting in West Paducah, Ky., they will sue acquaintances of the perpetrator for nor raising warnings.
In a 2020 report on liability for mass shootings for the American Bar Association, attorney Michael Steinlage writes that postevent liability claims can now extend to "anyone in a position to know of and/or intervene in the shooter's plan," in addition to relatives of a perpetrator, employers, site owners and operators, security firms, law enforcement, and mental health providers, among others.
No Longer 'Unforeseeable'
Liability insurers can no longer justify a "hands off" approach to mass shootings, Steinlage writes, adding that "these risks [are] firmly in the category of exposures that companies and insurers can no longer ignore."
In a bitter irony, the growth in liability exposure to gun violence arises as much with the victims of attacks as with the perpetrators.
Steinlage cites several recent cases where insurance companies were able to avoid or limit coverage for insured perpetrators. But he also notes that, with the increased incidence and notoriety of mass shootings, "the perception of whether such events are foreseeable has begun to shift."
He cites one ruling in the Aurora Theater shooting cases, where a judge opined that an act of mass violence that was unforeseeable in 1984 was not necessarily so in 2012. (The defendants in that case were eventually found not liable). To the extent horrific events have become foreseeable, organizations assume some degree of liability for anticipating how they will prepare and respond.
In another ironic twist, insurers may be adding to their third-party liability for mass shootings by marketing first-party coverage for them.
Insurance producers are now well aware of "Active Assailant," "Active Shooter," or "Workplace Violence" programs that combine coverage for costs incurred during and after an attack with specialized services for avoiding, mitigating, and recovering from an attack.
Clearly, if agents and brokers are actively marketing coverage for the risk, commercial insureds will be hard-pressed to argue that an attack could not be envisioned, and that they should bear no liability for failing to prepare for one.