Terror attacks spur active shooter insurance expansion
Recent "mass casualty events", including terror attacks, have prompted a growth in the speciality active shooter insurance market. Beazley launched its product, which has a maximum capacity of $20m per risk, in February 2016, while XL Catlin launched its active shooter coverage in the same month, with up to $35m available. Hiscox unveiled its policy in October 2016, but recently included knife or vehicle attacks in its definition, while Ironshore launched its Terrorism Crises 360° management response service and active shooter coverage in September 2016.

The specialty active shooter insurance market has grown and evolved over the past 18 months as mass casualty events continue to plague a growing list of cities worldwide.

Beazley P.L.C. is providing liability coverage while Hiscox Ltd., Ironshore Inc. and XL Group Ltd., which does business as XL Catlin, are writing property cover with business interruption. The policies are triggered by an event, and a policyholder does not have to suffer property damage to make a claim.

Beazley launched its product in February 2016, writing business via a consortium with other Lloyd’s of London syndicates managed by Talbot Underwriting Ltd. and Liberty Specialty Markets, said Chris Parker, political violence kidnap and ransom underwriter, political accident and contingency, at Beazley in London.

Maximum capacity is $20 million per risk, and all underwriting and pricing is done by Beazley, which binds on behalf of the other syndicates. The insurer uses a broad definition of weapons, ranging far beyond firearms, and its policy can even be triggered by the brandishing of a weapon without the completion of an attack or bodily injury or property damage.

XL Catlin launched its active shooter coverage in February 2016, the result of two years’ development, according to Ben Tucker, head of U.S. terrorism and political violence insurance for the insurer in New York.

Available worldwide, it is written through XL Catlin’s Lloyd’s syndicate, as well as in foreign markets including Singapore and Australia, and it is written in the U.S. on a surplus lines basis. Limits up to $35 million per risk are available, Mr. Tucker said.

Hiscox launched its active shooter product in October 2016 and recently broadened its definition of attack in August to include knife and vehicle attacks.

Limits are based on individual clients and submissions, but Hiscox “has the appetite to go up to a $50 million maximum,” said Jennifer Rubin, vice president for war, terrorism and political violence for Hiscox in New York. The policy is available in the U.S. and Europe, including the United Kingdom, and is written on a surplus lines basis through Hiscox’s Lloyd’s syndicate, Ms. Rubin said.

The Hiscox policy does not have a property damage trigger, so a policyholder can be compensated if it suffers lost business due to an attack on an adjoining business, for example. Coverage also includes a loss of attraction cover, allowing a claim if there was business and income lost due to a police cordon and investigation or other lack of egress or access, Ms. Rubin said.

Ironshore’s active shooter coverage was launched in September 2016 along with the company’s Terrorism Crises 360° crises management response service, which is provided to all clients of the company’s stand-alone terrorism coverage.

The product is written on nonadmitted paper, and policyholders electing the active shooter add-on typically buy limits in the $1 million to $5 million range, mainly to cover the cost of business interruption and expenses such as temporary office or work facilities, said James Dover, New York-based senior vice president for war and sabotage at Ironshore Inc., a Liberty Mutual Insurance company.

Ironshore follows the U.S. government/ Department of Homeland Security definition of an active shooter situation, which is “an individual or group of people actively engaged in killing or attempting to kill people in a confined or populated area,” according to Mr. Dover. The company does not seek to define the weapon or mode of attack, he added.