The True Costs of an Active Shooter Attack

The true cost of an active shooter attack on your business, school, or place of worship is almost incalculable. There is no way to put a number or amount on the grief and pain suffered by everyone involved. Their families suffer. Their friends and coworkers suffer. Anyone who knew them will be changed forever. An attack will leave a lasting impression for the rest of the victims’ lives. There is no way to know when an attack will occur; the best you can do is get as prepared as possible. Even knowing this, some might not consider the price of installing adequate security systems or conducting training to be cost-effective. They tend to say things like, “it will never happen to us!” – until it does.

As mentioned in a previous article, Eight Minutes Alone with an Active Shooter, we discussed the rate at which these attacks are increasing. Active shooter attacks increased by 52.5% in 2021 from 2020. Casualties increased by 48%. The average number of deaths in an active shooter incident is nine, but this is only an average. Death counts may be much higher than that. Most organizations never experience even one death in a workplace. After one of these attacks, you may be facing several at once. Hoping that it will not happen is not adequate protection, but there are steps you can take to mitigate the outcome.

In order to understand the true cost of an attack and put into perspective how much cheaper it is to prepare for an attack instead of to recover from one, we have laid out the costs of an active shooter incident into three main categories: direct monetary costs, indirect monetary costs, and non-monetary costs. As stated above, the loss of human life cannot be valued in any way. It is devastating to lose even one person, let alone a dozen or more. The costs discussed here deal with facilities and operations but can never compare to losing a member of your team.

DIRECT MONETARY COSTS

Direct monetary costs are those that will require direct input of money or resources to accomplish. This includes but is not limited to repairs, equipment replacements, payouts, fees, or anything else that takes funds out of your accounts. These are the most tangible and immediate costs, and they will affect your revenue most prominently. The other categories will take time to be known or show their effects. Most of these costs will be covered at least partially by your insurance providers, assuming the proper policies and coverage types were purchased. However, there is still the possibility that insurance will not cover everything, and your organization will need to pay the remainder out of pocket.

One of the first steps that will need to be accomplished is cleanup. This includes both general cleaning for dust and debris as well as more specialized cleaning for hazardous materials and biohazards. Hazardous waste from production processes or supplies may leak or be spread around a crime scene due to the nature of an active shooter attack; weapons fire does not discriminate, and bullets penetrate most objects. Biological hazards from injured or deceased people will be present as well in the form of blood and bodily tissue. It is likely that three different services will need to be hired for the three different types of cleaning. HAZMAT and biohazard cleaning can be very expensive but are necessary before it is possible to resume operations. Also, requiring employees to clean these hazards without proper training, certification, or equipment is an OSHA violation that could lead to fines or worse. Hiring professional hazardous waste and biohazard cleaning specialists is the better option.

After cleaning, equipment will need to be replaced. It is hard to gauge how much this will cost as the randomness of an active shooter attack, the location, as well as the law enforcement response to the attack are all factors influencing how much and what type of damage occurs. Computers or servers might be destroyed resulting in a loss of data. Office furniture, appliances, or storage cabinets may all be struck by gunfire and will need to be replaced. HAZMAT or biohazard contamination might not be able to be cleaned from certain objects like those with fabric upholstery. New replacements for all of these items will need to be priced out and purchased. Leaving any damaged equipment could have a decidedly negative effect on survivors of the incident as well as the image of the organization itself.

Similar to equipment replacement, facility repairs will need to be undertaken as soon as possible. The true extent of damage caused will need to be assessed by capable facilities or construction personnel. Gunshots penetrate drywall and wood and may cause structural damage or damage to water pipes, gas lines, or electric cabling. Damage to internal structures or utility lines may lead to further harm to your building. Doors, windows, and their frames may need to be replaced due to escaping personnel or emergency responders making forced entry through them. Carpet or porous surfaces will need to be replaced if contaminated. Any damage caused by responding emergency personnel will be reimbursed by the city or jurisdictional authority, but the reimbursement may not be adequate to cover the true cost of repair and make take a good amount of time to enter your account.

After the repair and replacement costs comes the payouts. Injured employees will be seeking worker’s compensation and disability payouts. Families of deceased employees will also be seeking worker’s compensation, if they do not pursue the lawsuit route (more on that later). Again, even with insurance covering most of these costs, any remaining amount that you may have to pay will start adding up depending on the number of casualties. Think nine payouts and insurance claims instead of just a single one. If a family member does choose to accept workman’s compensation, this prevents them from suing your organization for wrongful death. What happens if they do not pursue this course?

Wrongful death or workplace injury lawsuits are the alternative for employees who have been injured or families of employees who were killed if they feel that worker’s compensation is not adequate. The shooters themselves are not likely prospects for suing as they are all in prison or dead. According to the FBI’s data on active shooters from 2000 to 2019 out of 345 shooters, 43.5% were apprehended by police, 34.5% committed suicide, 19.4% were killed by the police, 1.2% were killed by citizens, and 1.4% are still at large. It is implausible that any of the shooters apprehended have any type of insurance or the resources available to pay out civil suits against them, and dead shooters cannot be sued. Because of this, your organization will be the main target for any wrongful death or workplace injury suits.

In order for a lawsuit to be successful against your organization, the plaintiff will have to show misconduct or negligence on part of the employer. In order to fulfill the OSHA Section 5 General Duty clause, organizations are responsible for providing proper working equipment, facilities, and training to employees. A good wrongful death attorney (and there are many of them out there) might be able to successfully argue that your organization is in fact liable for the death if active shooter training and proper security systems or procedures were not in place to prevent or mitigate the risk of an active shooter threat. Even though you may not be directly responsible for the actions of the shooter, will they be able to argue that lack of training, adequate security, or lack of medical supplies contributed to the death?

Even if your company is not found negligent and no misconduct is discovered, these cases can last a very long time. It may take months or even years before a decision is made. Your organization will be paying attorney’s fees and taking key individuals out of the workplace to testify or attend court. The plaintiff will hire experts to supplement their argument and your attorneys will likely have to do the same to counter those arguments. They might bring in medical experts, crime scene or forensics experts, security experts, or anyone else that may be able to provide facts or opinion that may sway the case in your favor. This just adds to the list of growing expenses surrounding the case. Because of all this, settling might be an attractive course of action.

Settling a wrongful death lawsuit, even if the employer feels they were not negligent and are not liable for the death, may be the cheaper option. In 2020, MGM Resorts International settled with victims of the Route 91 music festival shooting in Las Vegas that occurred in 2017. MGM admitted no liability or negligence in the case, yet still decided to settle with the victims to avoid lengthy cases and possibly higher damages. The settlement was for $800 million, and MGM’s insurance provider covered $751 million, which left MGM responsible for paying $49 million out of their own funds. With a total of 58 people killed and over 850 wounded, this resulted in a payout of $84,210 per victim. The amount paid per victim in a lawsuit like this is not standardized. Multiple factors can contribute to a judge’s decision in an award or an attorney’s decisions in a settlement. MGM was simply hosting the event; they were not responsible for providing security, training, or supplies in any way. Now imagine a case where an employer is expected to provide these things. The payouts can be much higher in this instance.

"Even though you may not be directly responsible for the actions of the shooter, will they be able to argue that lack of training, adequate security, or lack of medical supplies contributed to the death?"

Whether employees seek worker’s compensation or lawsuits are levied against your organization, you will need to make claims to your insurance provider to cover the expenses. In order to clean your facility, conduct repairs, and purchase new equipment, you will need to make some more claims. While this will assist your organization with completing these necessary tasks, it is important to remember that making claims on your policies will increase your insurance premiums. Most of the time, this is not a major issue, especially if the claim is for something minor like water damage from a leak or a broken window. In the case of an active shooter attack, the claims might be massive and frequent. There might be several windows and doors damaged, entire sections of walls may need to be removed and replaced, and whole departments may need to have their equipment replaced. If there are several wounded individuals, claims for each injury will need to be made to your worker’s comp or disability insurance provider. If there are multiple lawsuits from surviving families for wrongful deaths that result in awards or settlements, claims will need to be made for each one.

You will need to look at your policy contracts, but typically, there is a certain percentage increase in premiums for each claim made on that policy. Sometimes the increase is also dependent on the amount claimed. If nine casualties occur (average of six injuries and three deaths an attack according to the FBI), that is nine separate worker’s comp claims or nine separate wrongful death suits. You may need to make a claim to your business continuation insurance or key person insurance while operations are paused. Every claim made will raise your insurance premiums by the established amount, resulting in a much larger monthly payment than you had prior to the attack. And what if the insurance payout does not cover all expenses? At this point you are at the whim of the insurance adjuster and current market rates or prices for the various items that need repair or replacement. These expenses will still need to be covered and the remainder will most likely be paid by your organization.

INDIRECT MONETARY COSTS

Indirect monetary costs are those that may not show up as a billable expense but will affect your bottom line over time. These costs usually appear in the background or as potentially lost revenue. For example, if you are a manufacturing company that has an order due to ship a week after the attack and you cannot fulfill that order, the revenue lost would be an indirect monetary cost of an active shooter attack.

One of the first potential concerns that might take a toll on your bottom line is providing days off to grieve and recover for your employees. This is the ethical and correct way to start the healing process and will most likely coincide with the repair and replacement timeline anyways. It is up to your organization to decide how much paid time off they will receive, but always remember that the Family Medical Leave Act (FMLA) provides 12 weeks of unpaid leave for employees to take for serious health conditions that impairs the employee’s ability to perform the essential functions of their job. If any of your employees are diagnosed with a mental health condition such as post traumatic stress disorder or an anxiety disorder caused by the attack, they will be able to take up to 12 weeks off to get treatment without losing their job. This can occur in segments or continuously, in which case temporary workers may need to be hired to cover their workload.

This is a significant issue for two reasons: if the employee takes their time off and no temporary replacement is installed, you will need to spread their duties to other workers who also might be experiencing post-trauma symptoms. If you do decide to hire temporary workers, you will need to pay those workers as well as a fee to the temp agency they are sourced from. Additionally, temps will need to be trained on processes and procedures or maybe even the entire job itself. This results in a period of decreased efficiency for your organization and a potential loss of revenue. There is also no way to tell how many employees might take this route. If 10 of your employees are injured and another 20 need to take leave, you are missing a significant portion of your workforce. Even if given paid time off by their employer and the leave supplied by the FMLA, some employees may decide to quit.

"If the employee takes their time off and no temporary replacement is installed, you will need to spread their duties to other workers who also might be experiencing post-trauma symptoms."

After an active shooter incident, there might be many reasons employees decide to leave. One of the biggest reasons is they will not want to be reminded of the incident. If people they were close to were wounded or killed, seeing or hearing certain things might trigger memories of the event. This can be a significant stressor and might even be significant enough for them to want to exit the painful environment altogether. Some employees might not feel safe in your facility. They could possibly blame your organization for allowing the incident to happen in the first place. They might also be worried about it happening again and want to work somewhere with vastly improved security measures.

Whether employees are lost during an attack, decide to quit, or are on leave, you will need to hire replacements for these personnel. Hiring one person to fill an opening is an arduous and lengthy process; hiring a dozen or more at once can be overwhelming. Current rates for salaries might be higher than those you were paying for your personnel who are no longer working for you. You might have to offer higher salaries or benefits to attract new employees, especially if they know what happened to your organization. You might not be able to hire anyone for a significant amount of time due to all these factors. In the meantime, your organization is still attempting to recover, and production and efficiency are hindered.

Operations may shut down entirely. During the repair and replacement processes, this is a definite outcome, but it may continue even longer if employees are unable to return to work or if replacements cannot be found. Some insurance plans, like business continuation insurance, cover this eventuality, but as stated before, they may not cover all of your operating expenses. Salaries will still need to be paid, rent or mortgages will still need to be paid, and facilities will still need to be maintained. Any gap in production, manufacturing, or any other types of operations relevant to your organization will result in a significant loss of revenue. Looking back at the COVID-19 pandemics, there is a clear picture that arises. Certain industries just cannot afford to stop operating as their margins are too tight. And in the case of recovering from an attack, it does not matter if your business is or essential or not, it will take time to recover, repair, and replace, and the whole time this is occurring, you are not making profit.

A gap in operations can also lead to breaches of contract with clients, customers, or suppliers. Unless your contract with these entities has a provisions clause relating to shutdowns due to unforeseen acts like an active shooter attack that allows you to shift delivery or completion dates, you may not be able to fulfill contracts within the agreed upon time or at all. Some of your customers or suppliers may be willing to adjust timeframes, but some may not. This can open the door for lawsuits or arbitration, depending on how the contracts are written. Similar to the wrongful death or workplace injury suits discussed above, even if your organization does not have to pay damages, you will still be spending time and money arguing your case in court. Arbitration may also not work in your favor. If the customer or supplier is able to successfully argue that you should have had better processes or protections in place to ensure completion of the contract, you may lose and be forced to pay a settlement.

Again, hopefully insurance will cover all of these expenses. And even if your provider does pay everything, you will still need to be worried about procuring insurance after your policy expires. At renewal, your provider may decide to drop you altogether depending on the number of claims associated with the active shooter incident. They may decide to make the new policy so cost-prohibitive that you decide to go somewhere else for coverage. The problem here is, the new provider can see how many claims you have made and may attempt to also make a new policy so expensive as to be out of your reach. This can result in your organization paying an exorbitant amount for a new policy or a policy that does not provide adequate coverage. At this point, your organization would be at even bigger risk of the fallout from another emergency or incident like an active shooter attack.

NON-MONETARY COSTS

Non-monetary costs are those that do not have a direct financial amount attributed but can significantly impair your organization and your people. These costs are intangible, but very real. These are the issues affecting your processes and how both your employees and the public view your organization. The most significant of these costs is the psychological damage affecting your people due to an active shooter incident. As mentioned before, your people will be suffering. They may face post-traumatic stress symptoms, anxiety, fear, and a host of other problems.

Your organization will never be the same after an attack. It will affect owners, managers, supervisors, and employees. People will always remember what happened and will be left with survivor’s guilt and remorse. People will wonder if they could have done something better or if they could have saved this person or rendered aid to that person. It will take a long time for your people to start to recover from an attack, and that process may never be totally complete. Grief counseling should be provided and encouraged to any who might need it. Support groups should be sought or organized. Even if your organization does everything possible to help and heal employees, it might not be enough, but it is necessary.

Along with losing personnel comes the loss of their experience and knowledge. Even if all of your processed are written and codified, some individuals just know how to get the job done. They understand the nuance and intricacies of the work they perform. They know when a problem is arising and how to solve that problem or mitigate risks. Losing people like this can have a huge impact on an organization. Their insight and creativity are lost forever. The relationships they have built with employees, suppliers, and customers are gone. These people usually take on mentor and trainer roles as well and now your junior employees are left without that resource.

Training new replacements is another strain that your organization will have to handle during the recovery process. Whether they were lost during the incident or quit afterwards, there will be roles that need to be filled. Training new employees takes time and resources as well as decreases the efficiency of those employees tasked to train them. During the training process, the new employees will not be full-fledged workers and this effect might even be worse if a substantial part of or even a whole department needs to be filled. Even if the new hires generally know how to do the job, they will still need to learn how your organization operates and functions.

"Even if your organization does everything possible to help and heal employees, it might not be enough, but it is necessary."

Your replacement personnel might also face a certain stigma from your employees who have been at your company for a good amount of time. Employees who survived and experienced the attack might be more susceptible to falling into this mode of thought. The replacements might face other employees saying that “they have taken their friend’s spot” or that “they will never live up to their friend’s image.” They might also experience others telling them to not ask questions or not participate in talks about what happened because they were not there. This can create an immediately hostile workplace for the replacements that management will have to spend time and effort attempting to rectify.

Along with facing internal strife and issues, external ones will abound as well. Even if everyone knows your organization was not responsible for the attack, you may face bad publicity. The attack will leave a stain on your brand and people will be talking about what happened for a very long time. Even if you change your brand, the location of your organization will still be known, and people will feel uncomfortable there. Conspiracy theorists and hostile actors might attempt to create wild theories about the attack and possibly lie about what occurred for personal gain or simply to spread lies. Your organization could be criticized for not providing adequate training or protection. Depending on the shooter’s motivation, you might even be blamed for them initiating the attack if they were a former or disgruntled employee.

Loss of reputation is also a possible occurrence stemming from the bad publicity. Former employees might speak ill of your organization to the other companies or the media. They might accuse you of not preparing or caring enough. Competitors may attempt to take advantage of your tragedy to gain a bigger share of the market. They might also say negative things about your organization. Depending on how widespread these malicious acts are, suppliers might even consider discontinuing their relationship with you. They might be hesitant to deal with your company because they do not wish to be associated with you or they might be wary of another incident occurring and disrupting operations again.

HOW TO SAVE YOUR PEOPLE AND YOUR MONEY

Having the right insurance coverage in place is the first step towards preventing the costs discussed above from shutting down your business entirely. There are several types of insurance that may be beneficial, and General Liability is usually the most common and most utilized. In the aftermath of an active shooter attack, general liability insurance will most likely be used to cover property damage, injuries, and damages to your facility. Along with general liability comes Excess Liability insurance. Excess liability adds extra coverage for issues your general liability might not cover. It is usually added on top of general liability.

Commercial Property Insurance protects the physical assets owned by your organization. This is the insurance used to affect repairs on your facility as well as replace any damaged equipment. HAZMAT and biohazard cleaning may also be covered by a commercial property policy. Business Interruption Insurance assists your organization in remaining in business if you are forced to shut down. It will help cover operating expenses like salaries, mortgage or rent, loan payments, taxes, and lost income.

In the event that someone is trying to argue that your organization’s leadership or owners are responsible or liable for an attack, Directors and Officers Liability insurance will help cover their personal assets if the are sued for misconduct. Misconduct as it applies here would be failure to comply with OSHA regulations applicable to an active shooter incident or the aftermath of one. Similar to Directors and Officers Liability coverage is Management Liability Insurance. This coverage protects against the risks of managing a business and could be useful when negotiating settlements or arbitrations. Key Person Insurance is used when a key executive of your organization is killed. It is used to maintain operations while attempting to fill their role.

Worker’s Compensation Insurance is the most valuable when handling recovery from an active shooter attack. It will assist injured employees or their surviving families with medical costs and lost wages. Disability Income Insurance is similar and also covers lost wages if an employee is unable to work. Claims made against either worker’s comp or disability insurance will affect your policy, not any that the employee owns.

Even if you have excellent insurance coverage and can cover most of the expenses incurred by an attack, insurance does nothing to actually prevent an incident from occurring. Risk avoidance techniques and adequate preparation will help lower your liability, show that you care about employee safety, and might even lower insurances costs; both in the present and in the future. There are several ways to prepare for an attack and they must incorporate every department in your organization. Using a layered defense approach as described in a previous article of ours (found here), is essential to ensuring all facets of your security program function cooperatively and leave the fewest gaps in security.

The first layer needed to prevent an active shooter threat is a current and functional security system. This system should be comprised of cameras, alarms, access control, emergency alerting, and lighting systems. A proper threat assessment performed by a security consulting firm should be accomplished to identify any gaps or crucial vulnerabilities in security system coverage. Employees need to be trained on how to operate any alarm systems they can use to report a threat as well as how to identify the various signals sent by these systems for threat notification. During an active shooter incident, access control and emergency alerting systems are the two most valuable. Access control keeps the shooter out of occupied areas and emergency alerts notify personnel to the existence of a threat no matter their location.

Once systems are in place, in order to truly fulfill the OSHA general duty clause, materials and supplies need to be provided for your employees to access if needed. In terms of an active shooter incident, the supplies that should be furnished are medical and denial oriented. Having proper trauma kits (and the training to use them) ensures that your people can give themselves and their coworkers precious extra time when injured. Depending on where the injury is located, people can bleed to death in a few minutes. Providing your people with the proper equipment can stop that from happening. Barrier devices should be placed in key offices, gathering locations, and chokepoints where employees can hinder a shooter’s ability to move freely and limit their access to potential targets. These devices can be either mobile devices or built into the structure of the building.

The next step is training. Active Shooter Incident Response training is the most valuable resource your people can have during an active shooter incident. This type of training prepares them for an active shooter incident, shows them how to respond and react to a threat, how to escape from an incident, and what to do after the fact. Most companies believe that a webinar, training video, or e-learning module suffices, but this is simply not the case. In-person training with exercises and training scenarios puts employees in the right mindset for response, allows them to feel and understand some of the stress involved, and highlights the importance of sticking to their training. These in-person events also provide the opportunity to layer on other hands-on training like traumatic injury treatment training or workplace violence de-escalation training.

"Risk avoidance techniques and adequate preparation will help lower your liability, show that you care about employee safety, and might even lower insurances costs; both in the present and in the future."

Similar to the intangible costs to an active shooter attack, there are intangible but valuable benefits to adequately preparing for an incident. Getting the right training and having a solid security program in place provides employees with a sense of confidence in the fact that they are secure and safe. People who are concerned about an attack may feel better prepared, especially if they are trained and exercised on that training. An active shooter incident response training event also works as a team building exercise and lets employees know they can count on each other during an emergency. As an added benefit, demonstrating that you conduct regular active shooter training and are prepared for an attack can be used as a recruiting tool for potential hires; both those that require a safe work environment to be guaranteed as well as those looking for an employer that truly cares.

New security systems, emergency supplies, and in-person training all seem very expensive at first glance, but these costs cannot even compare to everything else discussed in this article. Providing your people with adequate supplies and training as well as updating your security systems is an upfront cost that reaps several benefits. On the other hand, lawsuit awards or settlements will be much more expensive and there is no way to tell how costly they will be. You will be paying increased insurance premiums for the rest of your organization’s operational existence, if you can even find decent insurance coverage. Loss of experience, loss of key personnel, and loss of reputation can devastate your ability to function. It is clear that taking the time and spending the money now to prepare your people for an incident will save your organization a fortune in the future.

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DISCLAIMER:

The above written article does not constitute legal, medical, or financial advice from Haven Defense Solutions LLC and should not be treated as such. It is for informational purposes only. It is not a substitute for an actual security assessment or security consult. All content provided by Haven Defense Solutions LLC or sourced from other parties is owned by and copyrighted to the original source. The information is provided “as is” without any representations or warranties, express or implied.

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