Workplace violence insurance: Does your business need this protection?
BY Chris Kissell
We live in an age where violence can strike at any time and in any place. That is also true of the workplace, where a disgruntled worker, angry customer or anyone else with access to the building can wreak havoc.
In 2012, 375 workers were killed in shootings that occurred while the victims were on the job, according to U.S. Department of Labor. Robbers were the assailants in 33 percent of these killings, while co-workers accounted for 13 percent of the deaths.
Episodes of workplace violence occur regularly. Some are smaller in profile, such as the September 2013 shooting in which a former vendor killed an employee and critically wounded the CEO of a lighting fixture company in Garden City, N.Y.
Other cases garner widespread, national attention. The federal government even controversially declared the infamous 2009 shootings of 13 soldiers at Fort Hood, Texas, to be an episode of "workplace violence."
If you're a small-business owner, workplace violence insurance can protect your business in the unfortunate event of an incident where someone attacks or even kills another person at your workplace.
The insurance covers various expenses related to workplace violence, including the cost to your business of:
- Providing medical expenses and salary reimbursement to employees affected by workplace violence.
- Offering a death benefit to the family of an employee slain in an episode of workplace violence.
- Hiring mental health professionals to help employees cope after an incident.
- Tapping the expertise and services of security experts, crisis management consultants and public relations professionals.
- Reimbursing company revenues lost due to business interruptions in the wake of a violent incident.
Every company should consider this type of coverage, says Greg Bangs, vice president and workplace violence expense insurance product manager at the Chubb Group of Insurance Companies.
"Workplace violence incidents have occurred in most types of companies," he says. "Even the best-managed companies can be victims of this type of violent behavior."
What is workplace violence insurance and how much does it cost?
Some companies are more vulnerable to an episode of workplace violence than others, Bangs says. They include businesses that share any of the following characteristics:
- Have a high level of interaction with the public.
- Operate late at night.
- Serve alcohol.
- Have a high-stress environment.
- Are in the process of conducting layoffs or are restructuring.
Workplace violence insurance coverage amounts vary by company, Bangs says.
"Most businesses purchase limits between $1 million and $5 million per occurrence," he says.
Before purchasing a policy, businesses need to figure out how an incident of workplace violence might affect their business financially, Bangs says. Such a calculation should include all expenses, fees and lost-income costs that could arise after an incident.
A $1 million limit for a workplace violence expense insurance policy for a small to midsize company could cost between $1,000 and $3,000 annually, Bangs says.
The exact premium would depend on factors such as the security measures a business takes to protect its employees, including things such as the presence of security personnel or anti-violence measures such as formal company protocols for resolving employee disputes peacefully, Bangs says.
Some businesses may choose to protect themselves by purchasing workers' compensation insurance. This coverage serves two purposes, according to the nonprofit Insurance Information Institute (III):
- It guarantees that injured workers receive medical care at no cost to themselves, and compensates them for a percentage of the income that is lost if they're unable to work.
- It protects businesses from the financial damages associated with lawsuits filed by workers are injured on the job.
Workers' compensation covers injuries stemming from many types of incidents that occur in the workplace. In some cases, this may include workplace violence, according to III.
However, Bangs says workers' compensation policies fail to protect a business against many types of costs associated with workplace violence.
"There are significant gaps in this coverage," he says. "It is important for companies to strongly consider taking out workplace violence expense coverage insurance in order to plug the gaps in workers' comp insurance."
For example, workers' compensation will not cover damages suffered by a guest who becomes a victim of violence while visiting your workplace, Bangs says.
In addition, the salary compensation offered to employees under a workers' compensation policy doesn't include bonuses and other incentive payments. By contrast, workplace violence insurance does reimburse such costs.
"A workplace violence policy provides coverage for an extremely broad range of expenses incurred following an incident," he says.
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