RIMS 2016

A Potentially Explosive Reputational Risk

With guns a hot-button emotional issue, employers face tough choices for managing related reputational exposures.
By: | April 7, 2016 • 2 min read

With more Americans passionate about carrying guns in public and more laws allowing it, businesses must assess their risk tolerance and prepare.

Uniform strategies that mitigate the growing risk of gun-related losses for most entities, however, have yet to emerge, leaving employers to define the best plan of action for their unique circumstances and their stance on guns on their premises.

The risks that restaurants, universities and most other entities face include, workers’ compensation losses, general liability exposures and operational challenges, should a shooting force an extended closure.

“”The biggest risk, actually, is reputational,” said Michael P. Lowry, an attorney at Thorndal, Armstrong, Delk, Balkenbush & Eisinger. “So if you can avoid that by taking some preventative measures you are ahead of the game. You are helping to contribute to the company’s bottom line.”

While the growing risk of a mass shooting incident will cause reputational harm, taking a stance on whether to ban guns or welcome customers and employees who pack them also generates reputational backlash from ardent proponents on both sides of the issue, the speakers said.

About five years ago Texas de Brazil posted their policy online stating that the restaurant company was fine with allowing concealed weapons or the open carrying of firearms in states where laws allow those practices.

“We were vilified within the first three days,” said Danielle Goodgion, director of human resources for the Brazilian-style steakhouse and churrascaria with locations across the United States.

“We pulled it off the website. It was not worth the drama.”

Conversely, companies that seek to mitigate the risk of violence by banning guns on their premises face social media attacks from interest groups opposing such policies “and now your brand is being drug through the mud,” Lowry said.

While a simple, uniform policy for mitigating the reputational exposures associated with firearms does not exist, risk managers should identify their risks and develop a plan that best protects their employees, customers and operations, the speakers said.

Each plan, however, comes with its own potential consequences requiring assessment.

Welcoming guns on premises, for instance, expose companies to liability should a weapon accidentally discharge. Posting signs banning guns, on the other hand, could expose the companies to claims from injured parties that the companies were responsible for their safety, Lowry said.

Whatever policies employers adopt, it is important they maintain mechanisms for enforcing those policies.

Employees, for instance, need to know what is expected of them and their responsibility for themselves and customers should a situation arise requiring action.

Goodgion said the company trains employees to respond to gun-violence threats or active shooter situations.

That training works in conjunction with other guidance such as anti-bullying training and exercises for identifying potential workplace dangers, for example, to provide opportunities for teaching how to treat others with dignity and respect and how to respond should violence occur, she said.

“All of that integrates,” Goodgion said. “It’s an evolution. So adding an active shooter response is just one more piece. For me, it was just adding another segment to the training.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

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