Workplace violence represents a sizable and growing risk for employers and impacted employees. The numbers are staggering: Workplace violence costs employers more than $120 billion annually in claims, litigation, additional security, staffing, communications and other expenses, according to the National Institute for Occupational Safety and Health. And according to a Department of Justice study, almost 75% of victims reported some level of emotional distress following violent events, with nearly 40% experiencing moderate to severe trauma.
Today’s workers compensation policies may not adequately address workplace violence events, given the restrictions set in motion by insurance policies and state laws, but there is an opportunity for our industry to drive meaningful change.
Compensability within the workers compensation system following a workplace violence incident will vary based upon the event specifics and state. For example, an on-premises assault that occurs as a result of a personal motive, such as domestic violence, may not be compensable in certain venues.
Each state’s statute defines who is eligible to receive benefits when an event occurs. Many states that allow for the compensability of mental health services limit statutory benefits to employees who have suffered physical harm during the event. A physically unharmed employee, such as an employee witness to workplace violence, is sometimes not eligible for mental health benefits in workers comp.
Some businesses purchase a separate workplace violence policy to add to their crisis response toolkit. In general, these policies focus on the wellbeing of a company’s employees following a violent incident in the workplace. Sublimit extensions may be available to include coverage for third-party expenses and loss of business income. These policies can also include crisis management expense coverage following an incident.
However, the availability of workplace violence coverage is not absolute. Some classes of business with a predisposition to increased workplace violence exposure may be excluded from underwriting consideration. These include law enforcement, security services and health care.
Further, standalone workplace violence policies are often written on a nonadmitted basis. As such, they are governed by state surplus line associations, which do not always permit certain terms and conditions. For example, Excess Line Association of New York guidance outlines coverage prohibited by the state’s Department of Financial Services for impacted employees under state statute: “A workplace violence/active shooter policy may include medical payments (including counseling), death benefits and/or funeral benefits for invitees, customers, and guests on the premises during a workplace violence incident. However … employees cannot be covered for these benefits under a workplace violence/active shooter policy.”
It is important to note that many businesses operate across state lines. As such, a position restricting available coverage for policyholders headquartered in that state also translates into a limitation of available coverage for the employees of that policyholder regardless of locale.
The workers compensation policy may be the best avenue to solve for the unique needs presented in the wake of workplace violence. However, there exists opportunity to effect change and elevate the industry through individual influence campaigns at the state level.
This is already a focus in certain venues: California is one example of modeling local action through the combination of recently enacted Senate Bill 553, which provides employers with a blueprint for violence prevention, and existing statutory workers compensation benefits. With this approach, employee welfare is addressed at both pre-incident preparedness and post-incident statutory benefit levels.
While local efforts take place, our industry’s voice can be amplified at a national level by respected organizations such as the National Council on Compensation Insurance and the National Institute for Occupational Safety and Health. Their sponsorship of a more robust workers compensation/workplace violence offering would align with NCCI’s mission to “develop modern solutions that help support industry stakeholders and the workers’ compensation system” and NIOSH’s vision of “safer, healthier workers.”
Assuming statutes support doing so, the design of a workplace violence offering within the workers compensation policy would unify the two products as a more comprehensive crisis response offering. An extension of coverage afforded within the workers compensation policy is further enhanced by the involvement of our industry’s unsung heroes and arguably the policy’s greatest value proposition: major case claim adjusters.
Due to limitations of applicable statutes, it is not uncommon for a major case unit adjuster to be forced to stop short of facilitating a comprehensive and holistic resolution for the policyholder’s employees following a workplace violence event. By embedding within the workers compensation policy a workplace violence offering, the same adjuster would be empowered to more fully navigate the compensable, noncompensable and crisis response aspects of the claim. This would facilitate the seamless delivery of compassion, empathy and direction for the employer and impacted employees.
Those who suffer direct or indirect harm due to a violent act in the workplace are worthy of our concern. It is incumbent on us as an industry to develop solutions for these stakeholders.
Perhaps efforts are already underway by industry influencers to examine opportunities to advance the statutory workers compensation product to meet this moment. If so, all of us — brokers, insurers, clients— would benefit from learning how we can add our support to accelerate this effort.
If this work has not yet begun, there is no time like the present to consider how our industry can deliver meaningful restoration in these heartbreaking situations. At its core, the property/casualty industry supports policyholders in the darkest of times. It is the single best attribute — and responsibility — of our business, and one that instills pride in our purpose.
Our collective intent is to care for and restore the lives of the employees and businesses impacted by an event. It is my hope and intention that in the future, our industry can elevate to deliver this readily to policyholders. Industrywide solutions that help clients — and more broadly, society — in a time of crisis are something we can all get behind.
Specializing in workers compensation coverage issues, Debbie Goldstine is an executive vice president and U.S. casualty leader at Lockton Cos. LLC. She can be reached at dgoldstine@lockton.com.