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Liability Risk

Allowing Guns in the Workplace Introduces Liability Risk

Having an armed manager adds on-the-spot protection, but guns in the workplace could open companies to liability risks.
By: | May 1, 2018 • 5 min read

The U.S. saw 54 mass shooting incidents in the first three months of 2018. The Gun Violence Archive, a nonprofit that collects and maps gun-related violence in the U.S., reported 3,619 deaths and 6,315 injuries in that same timeframe.

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“Workplace violence incidences are on the rise in the United States,” said Emily Loupee, Los Angeles-area vice president, management liability practice group, Gallagher. “According to OSHA, two million workers in America are victims of workplace violence each year. A November 2017 CNN analysis reported that despite having only 5 percent of the world’s population, the U.S. accounted for 31 percent of the public mass shootings between 1966 and 2012.”

“It’s the number one killer of women in the workplace and third overall,” said Mark A. Lies, labor attorney, Seyfarth Shaw LLP.

From movie theatres to churches, elementary schools to the workplace, gun violence knows no bounds. Many have spoken out about gun regulation and reform, mental health screenings, raising the legal gun-purchasing age, arming teachers and so on.

The hard truth, however, is that change takes time. While the country waits for political action, violent incidents can still occur. Companies willing to take matters into their own hands are looking for ways to prevent, prepare for and mitigate the risk of an active shooter.

Firearms in the Workplace

One solution: arming managers.

“This is a newer consideration for companies that is arising from the large number of incidents occurring both in the public domain and in the workplace,” said Kim Auchstetter, the Chicago-area executive VP of retail property/casualty brokerage operations, Gallagher.

And while the idea itself comes with controversy, it isn’t without its merits. A Gallagher-published article, entitled “Arming Managers With Guns?” and written by Lies, considers advantages and disadvantages of the proposal.

The biggest argument for companies allowing managers to carry a gun is that, in the event of an active shooter, the manager would have a firearm available to protect themselves and the workers.

“It will be interesting to see how the standard markets react to guns in the workplace. Some may decline to provide a quotation and others may seek reinsurance to mitigate their risk, which could increase the cost of insurance for businesses.” — Kim Auchstetter, executive VP, retail property/casualty brokerage operations, Gallagher

“You have someone on the spot. Sometimes it can take the police time to get to a place. That’s critical time,” said Lies. “Somebody who is trained can stop an incident right there.”

Lies, however, called this a “limited advantage,” because any armed manager needs proper permits to own a gun. And a firearm owner identification card and a concealed carry permit do not grant managers the authority to bring firearms into the workplace; the employer would need to set up the proper channels for a gun to be present at work.

First step, Lies said, is to review federal and state law. Lies also suggested that if an employer chooses to allow firearms at work, they should consider requiring copies of their managers’ permits on file.

However, having proper documentation and the law on the employers’ side isn’t always enough.

Edward Zabinski, area senior vice president, Gallagher

“The manager is not a sworn law enforcement officer, so the legal immunities that such officers have for liability to themselves and the employer will not attach,” Lies wrote in the article.

If a manager were to use a firearm on the workplace premises to stop a threat, they would be relying primarily on their inherent right to self-defense. Additionally, the manager could be seen as acting as an agent of the employer, which opens the company to potential agency liability claims if an incident occurred.

“From an insurance and risk management perspective, one of the biggest issues with arming [managers] is the increased potential liability you can face as an organization,” said Auchstetter. “This exposure can also limit — or potentially completely eliminate — the number of admitted insurance carriers that will agree to underwrite a company if they begin arming their managers with firearms.”

“If I were an insurer, I would want to know about the manager [before agreeing to insure the company],” said Lies. He suggested employers should ask managers interested in carrying a gun to take a psych evaluation.

“In my experience,” he said, “many employers aren’t involved in that yet.”

It’s difficult to assess how an individual might react in a high-stress moment like facing an active shooter. A psych evaluation can give just a hint of what a manager is capable of doing.

The permits show “they can handle a weapon,” Lies said, “but when it comes down to a stressful situation, are they psychologically ready? Will they make the right decision? Are they trained in reading another person’s behavior? Will they tell the shooter to surrender and wait or will they shoot?”

Split-second judgment calls can distress even seasoned police officers trained in such situations. If a manager were to exceed the scope of reasonable force or act negligently or recklessly, the company could be liable for civil damages for personal injury, wrongful death, emotional damages, punitive damages and more.

“It will be interesting to see how the standard markets react to guns in the workplace. Some may decline to provide a quotation and others may seek reinsurance to mitigate their risk, which could increase the cost of insurance for businesses,” Auchstetter added.

Planning Ahead

Active shooter/malicious acts, workplace violence and terrorism coverages are just some of the products geared toward helping insureds in the event of a workplace shooting.

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“Many insurers offer endorsements for assault or workplace violence on kidnap and ransom insurance policies for 15 to 40 percent additional premium,” said Loupee. “The policies cover fees such as lost business income, security, rest and rehabilitation, public relations, crisis response, lost wages, counseling and death benefits.”

“These coverages also help to address the gray areas that can be present with traditional insurance following these incidents,” Auchstetter said.

Edward Zabinski, Chicago-area senior VP-loss control and safety services, Gallagher, said companies can start the conversation by creating policies preventing workplace violence and harassment, establishing a zero-tolerance code of conduct, addressing conflicts quickly to prevent escalation, conducting workplace violence and harassment prevention training, and creating safe channels of communication so that unwanted behavior can be addressed promptly. &

Autumn Heisler is digital producer and staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

The risk manager for Boyd Gaming Corp. says curiosity keeps him engaged, and continual education will be the key to managing emerging risks.
By: | May 1, 2018 • 4 min read

R&I: What was your first job?

I was trained as an accountant, worked in public accounting and became a CPA. Being comfortable with numbers is helpful in my current role, and obviously, the language of business is financial statements, so it helps.

R&I: How did you come to work in risk management?

Working in finance in the corporate environment included the review of budgets and the analysis of business expenses. I quickly found the area of benefits and insurance — and how “accepting risk” impacted those expenses — to be fascinating. I asked a lot of questions. Be careful what you ask for — I soon found myself responsible for those insurance areas and haven’t looked back!

R&I: What is the risk management community doing right?

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I have found the risk management community to be a close-knit group, whether that’s industry professionals, risk managers with other companies or support organizations like RIMS and other regional groups. The expertise of the carriers and specialty vendors to develop new products and programs, along with the appropriate education, will continue to be of key importance to companies going forward.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As I’m sure many in the insurance field would agree, Hurricanes Katrina and Rita in 2005 changed our world and our industry. It was a particularly intense time and certainly a baptism by fire for people like me who were relatively new to the industry. This event clearly accelerated the switch to the acceptance of more risk, which impacted mitigation strategies and programs.

Bob Berglund, vice president, benefits and insurance, Boyd Gaming Corp.

R&I: What emerging commercial risk most concerns you?

The fast-paced threat that cyber security represents today. Our company, like so many companies, is reliant upon computers, software and IT expertise in our everyday existence. This new risk has forged an even stronger relationship between risk management and our IT department as we work together to address this growing threat.

Additionally, the shooting event in Las Vegas in 2017 will have an enduring impact on firms that host large gatherings and arena-style events all over the world, and our company is no exception.

R&I: What insurance carrier do you have the highest opinion of?

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With the various types of insurance programs we employ, I have been fortunate to work with most of the large national and international carriers — all of whom employ talented people with a vast array of resources.

R&I:  How much business do you do direct versus going through a broker?

We use brokers for many of our professional coverages, such as property, casualty, D&O and cyber. We are self-insured under our health plans, with close to 25,000 members. We tend to manage those programs internally and utilize direct relationships with carriers and specialty vendors to tailor a plan that works best for team members.

R&I: Who is your mentor and why?

I have been fortunate to have worked alongside some smart and insightful people during my career. A key piece of advice, said in many different ways, has served me well. Simply stated: “Seek to understand before being understood.”

What this has meant to me is try everything you can to learn about something, new or old. After you have gained this knowledge, you can begin to access and maybe suggest changes or adjustments. Being curious has always been a personal enjoyment for me in business, and I have found people are more than willing to lend a hand, offer information and advice — you just need to ask. Building those alliances and foundations of knowledge on a subject matter makes tackling the future more exciting and fruitful.

R&I: What have you accomplished that you are proudest of?

Our benefit health plan is much more than handing out an insurance card at the beginning of the year. We encourage our team members and their families to learn about their personal health, get engaged in a variety of health and wellness programs and try to live life in the healthiest possible way. The result of that is literally hundreds of testimonials from our members every year on how they have lost weight, changed their lifestyle and gotten off medications. It is extremely rewarding and is a testament to [our] close-knit corporate culture.

R&I: What’s the best restaurant you’ve ever eaten at?

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Some will remember the volcano eruption in Iceland in spring of 2010. I was just finishing a week of meetings in London with Lloyd’s syndicates related to our property insurance placement when the airspace in England and most of northern Europe was shut down — no airplanes in or out! Flights were ultimately canceled for the following five days. Therefore, with a few other stranded visitors like myself, we experimented and tried out new restaurants every day until we could leave. It was a very interesting time!

R&I: What is the riskiest activity you ever engaged in?

I am originally from Canada, and I played ice hockey from the time I was four years old up until quite recently. Too many surgeries sadly forced my recent retirement.

R&I: What do your friends and family think you do?

That’s a funny one … I am a CPA working in the casino industry, doing insurance and risk management, so neighbors and acquaintances think I either do tax returns or they think I’m a blackjack dealer at the casino!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]