By Reid and Kristine Rushing | Insurance Division
Before we dive into this blog post, we’d like to extend our sincerest condolences to everyone affected by this tragic event.
We were recently asked a question about whether or not there would be coverage for the individuals and entities involved in the shooting in Orlando. Is there coverage for a Terrorist Act? Would a General Liability policy provide coverage to the injured patrons?
Note: We’ll always answer coverage questions from a high level perspective based on standard insurance forms, since the coverages can differ depending on the carrier and endorsements added to the policy.
Coverage for the Club
In regards to coverage for an Act of Terrorism, this is an endorsement that would have to be added to the policy for coverage to be present. All of these items must occur for coverage to be triggered to be considered an Act of Terrorism:
- -Under the most recent Terrorism Risk Insurance Act that was amended in 2015, an “act of terrorism” means any act that is certified by the Secretary of the Treasury – in consultation with the Secretary of Homeland Security and the Attorney General of the United States – to be an act of terrorism;
- -To be a violent act or an act that is dangerous to human life, property, or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of certain air carriers or vessels or the premises of a United States mission; and
- -Committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.
It is most likely that these items will not be triggered, so what are the other options for the Club Owners?
General Liability Policy
Would the Club be covered under a General Liability Policy? It depends on a lot of variables. That answer is frustrating, isn’t it? But it’s true. It depends on the carrier, coverage form that they use and the type of business that is insured.
On the ISO Commercial General Liability Coverage Form, the policy remains silent. Or in simplest terms, the policy does not address either the inclusion or the exclusion of bodily injury or property damage by the act of assault or battery. So what do you look for? The coverage to look for is Assault & Battery coverage.
Depending on the type of business, especially in the hospitality industry, it’s very common to see a limitation of coverage added by endorsement to the policy providing limits as low as $25,000, or an Assault & Battery Exclusion that does not provide any coverage at all for bodily injury or property damage resulting from any type of assault, battery or physical altercation. These coverages and endorsements can be found in the Liquor Liability Policy as well.
There are other types of Risk Management alternatives that can be enforced such as the installation of a metal detector or having bouncers search patrons before entering the bar.
In the end, is there insurance coverage? Possibly. Are there other practices that could have prevented this? Possibly. There’s no business owner that anticipates a crime of this nature or expects 49 lives to be lost and over 50 individuals injured in their establishment. It’s unfortunate to think that this can even take place.
Coverage for the Individual
Where else would there be possible coverage for the injured and deceased’s family to pay for the hospital bills or even to pay for the burial and funeral expenses? They can look under the personal Health Insurance coverage or Life Insurance Policies.
Outside of these options, there are many crowdfunding sites popping up to help the victims recover. If you’d like to donate to the families of the victims, please click on this link for donation options.