A couple of months ago we did a blog piece on gun liability insurance and noted that the insurance industry might have something to add to the gun control issue with a distinctly American private industry twist. It turns out we might have been on to something. Kansas passed a law earlier this year to allow teachers and other school officials to carry concealed weapons. It was not long after that law passed that the news broke an insurance company that insured a large percentage of Kansas Schools had indicated it would not insure or renew insurance on any school that allowed teachers or staff to carry guns on school property.
Just in case anyone thinks this was a political decision, it turns out that the insurance carrier had always had an underwriting guideline for schools that required any on-site armed security be provided by qualified law enforcement officers. They did not change the guidelines to respond to any contemporary concerns about gun control. The company noted that while they respect any schools decision about how to protect the safety of students concealed handguns in schools create a greater liability risk and they needed to protect the financial interests of their company. Not long after the announcement, several other insurers indicated they would institute the same guidelines.
In short, while lawmakers were passing laws they believed might make people safer in schools, insurers were saying “not so fast.” The risk experts looked at the prospect of untrained people carrying guns in schools and declared that practice too risky to insure. That may not be surprising on the face of it. Insurers need to pay attention to the risks that affect them and they can be very sensitive to those risks. For example, your Washington homeowner’s insurance carrier may be concerned about what kind of dog you have. There are somewhere over 15,000 liability claims for dog bite every year and over $475 million paid out annually. It is just prudent to make an underwriting decision to either deny coverage or increase premiums for people who have “dangerous” dogs. Presently your homeowners insurance is likely to provide coverage in the event of an accidental death. There may be only 500 to 600 of these per year, but if the incidence of accidental deaths increases, it could easily reach a threshold where insurers are curious about how many and what type of guns there are in the home.
The direction for gun liability is not always clear however. While the decision in Kansas made headlines, other states have found willing carriers – and sometimes even savings. A New York Times article offers a fairly even handed treatment of the issue. While noting the difficulties in some states, they also suggest that other states and individual school districts may be able to find willing carriers rather easily. Their conclusion is that the market will take care of the issue. That means, effectively, that if the underwriters see no increase in liability claims, the whole issue of school staff carrying guns could become moot from a business perspective. That may have little or no effect on the efforts to involve insurers in the gun debate in the longer run.