What is Workplace Violence Insurance?
Let’s start with looking at the risk or actual threat of workplace violence in America today.
Grim statistics tell us that workplace violence is a real and dangerous threat. To take a step back, workplace violence is not limited to weapon violence, but rather is any threat or act of physical violence that occurs at a workplace.
According to the National Safety Council assaults are the second leading cause of work-related deaths following motor vehicle crashes in America today. A survey by the Council in 2020 showed that 22% of workers reported being exposed to workplace violence, 12% said workplace violence caused serious injury and 47% of those surveyed said that their workplace did offer workplace violence training.
Does that surprise you?
I would have guessed fall from height, or some other workplace accident would have been much greater than workplace violence. And the numbers continue to rise. In 2019 workplace assaults resulted in 20,870 serious injuries involving lost time and 454 fatalities.
What causes employees to resort to violence in the workplace?
- Work related conflict
- Revenge for being terminated
- Revenge for not being promoted
- DomesticAnd, domestic violence
are the most common root causes of workplace violence.
But there are also random acts of violence that occur in the workplace and some are triggered by non-employees, but lately it seems like these are largely employee driven events.
In video one, I discussed the costs that can be incurred in a violent event in the workplace, so now I want to discuss why a separate business insurance policy may be needed to cover those costs.
Let’s start with injuries sustained by employees in a workplace violence event.
In most cases the physical injuries an employee sustains will be covered by workers compensation. Where workers comp falls short is on mental trauma of employees who were not physically hurt, and this can be a substantial uninsured cost.
Further, non-employees who experience violence in the workplace may have both physical and mental injuries. Non-employees of course would not be covered by workers comp but would need to file a lawsuit to recover from those injuries or settle for a liability coverage known as Med Pay, which is usually limited to $10,000. Workplace violence insurance would help to remediate claims from non-employees for injuries without them having to sue and subject your liability limits to testing or damage your goodwill or reputation.
The second biggest gap in a traditional commercial insurance program when it comes to workplace violence risk is business interruption. As I mentioned in video one, a business may be shut down or slowed down for days or weeks following a violent event – it could be for law enforcement investigations, or, most commonly slow downs occur due to employees who are reluctant to come to work following a violent event.
The business income or business interruption cover on your property policy does not cover these situations since the trigger for that coverage is physical damage to a premises which requires the full or partial cessation of business. That means the loss of income from violence is uninsured, damaging company earnings, and ownership profits.
Those three gaps are the most evident ones, but the risks that workplace violence presents to an employer go beyond traditional risks.
For example, many workplace violence insurance policies will cover:
- Consulting costs associated with threats of violence and how to prevent or contain them.
- Crisis management costs following an event, including public relation expenses to restore a company’s public image.
- The cost of security guards to help employees feel more secure to return to work following an event.
- Legal expenses associated with the event
- Death benefits to survivors
The bottom line is that mid-market employers need to consider adding workplace violence insurance to their coverage portfolio to provide expert consultants to contain the trauma and costs of an event, as well as provide needed funding to cover those costs. Coverage is available from a handful of insurers and policy limits are available from $1,000,000 to $100,000,000 for very large firms. For the medium sized employer premiums start in the $2,000 ballpark for limits of $1,000,000 but depend on the size of the applicant, industry and location.