It seems almost weekly there is a story or two in the national headlines addressing gun violence in the U.S., and a recent Insurance Journal article indicated respondents of a survey thought insurance could have a role in firearm safety. It’s an interesting question, should insurance drive increased firearm safety?
Anyone with a degree of familiarity with the insurance industry might conclude that it’s possible. Insurance companies are famous (infamous?) for requiring that people and businesses take certain steps to mitigate the risks to their property and the risks of being sued by their friends and customers. You remember that time a friend of yours was complaining because their insurance company told them to cut a tree away from their house so that limbs didn’t fall on it during a storm or when you had to call a client to tell them to implement a driver safety program for their business or risk losing coverage for their fleet of delivery trucks?
Let’s look at firearms from a risk management perspective and see if we can determine whether or not insurance can drive increased firearm safety. For our purposes, we are excluding firearms that people possess as a part of their career, including police, armed security officers, certain emergency medical personnel, and members of the military. Of course, all of these people could own firearms for personal use, so that would be included.
Why Do People Have Firearms?
For many people, having a firearm is simply a fact of life. For others, it’s a foreign object, something they have never seen in person, let alone used and kept around. So, why do people have them?
Some people use their firearms for hunting. For some people, hunting is a family pastime. They went hunting with a father, grandfather, or someone else, and they do it because it helps them to connect with their past. For others, it’s a way of providing for their family. They hunt to eat or to provide other resources for their family.
Some people use firearms for sport. Some people call themselves sport hunters, but that’s not what we’re dealing with here. There are competitive shooting competitions where shooters are judged based on different criteria, including how well they shoot in different conditions. You might know someone who competes in three-gun competitions, which is an event where competitors are required to shoot targets of different shapes and sizes using three different types of firearms — a shotgun, a rifle and a pistol.
Some people have firearms for personal protection. Some keep firearms in their home, others keep them at their workplace, and others carry firearms. For these people, a firearm is meant to protect people and property from harm. They may have firearms because of the type of business that they have, or because of where they live. That leads us to one more reason people have firearms.
Some people use firearms to commit crimes. They intend to use them to frighten people to comply with their demands or they intend to harm people. Whether the harm is in the fear of what might happen, or the use of the firearm to hurt people, these people are using them in ways that are counter to society in general and to individuals specifically.
We look at these in light of the original question and that is, can insurance drive increased firearm safety? That brings us to the question of how insurance policies cover firearms.
What Can Insurance Policies Cover?
When it comes to firearms and insurance, we can look at them in two ways. First, as items of personal property, in which case, in general, firearms are covered just like other items of personal property. If you have a Homeowners’ policy based on the ISO Homeowners’ 3 – Special Form, there is a special limit of $3,000 for theft of firearms.
It is possible that some carriers may have other limitations on coverage for firearms as property, but we haven’t seen it, even when certain insurance companies made big news saying that they would severely restrict coverage for firearms on their policies.
When it comes to the liabilities surrounding firearms, that’s another story. Keep in mind the reasons that people have firearms include hunting, sport shooting, and for personal protection. Let’s look at three likely scenarios here.
A hunting accident. A hunter is out sitting in a tree stand, waiting on the animal she’s hunting. She sees the animal near a tree on the opposite edge of a clearing. She takes aim and fires, missing the animal. That’s when she realizes that there was another hunter behind that tree. That hunter had made the sound that caused the animal to move at the last second and happened to have his leg sticking out in the line of fire. He was hit. He went to the hospital, has medical bills, and can’t go to work for a couple of weeks.
How might the ISO HO-3 (03/22 edition) respond?
Coverage E – Personal Liability
If a claim is made or a “suit” is brought against an “insured” for damages because of “bodily injury” or “property damage” caused by an “occurrence” to which this coverage applies, we will:
- Pay up to our limit of liability for the damages for which an “insured” is legally liable. Damages include prejudgment interest awarded against an “insured”; and
- Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent.
We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when our limit of liability for the “occurrence” has been exhausted by payment of a judgment or settlement. We aren’t taking the space to dig into the defined words. You can look them up for yourself.
So far, we haven’t looked at any exclusions, so what we know so far is that bodily injury happened and that damages occurred because of the bodily injury. There is an exclusion, however, that may be problematic.
Expected or Intended Injury
“Bodily injury” or “property damage” which is expected or intended by an “insured”, even if the resulting “bodily injury” or “property damage”:
- Is of a different kind, quality or degree than initially expected or intended; or
- Is sustained by a different person, entity or property than initially expected or intended.
You could make the argument that the hunter expected or intended to injure an animal and therefore this exclusion applies. The way it reads gives us the idea that since the shooter intended bodily injury to the animal, but bodily injury happened to someone else, this exclusion still applies.
I would attempt to make the argument that the context of the term bodily injury in the rest of the policy indicates the idea that a person was injured in some way and therefore the general meaning of the term should be interpreted to speak to bodily injury of persons, and since an animal isn’t a person, there was no expected or intended bodily injury and therefore it isn’t excluded.
Someone accidentally shoots themselves. We have all heard stories where someone picked up a firearm that didn’t belong to them, kids are playing around and find a firearm, or someone doesn’t realize that the firearm is loaded, and the end result of all of these situations is that someone gets shot. For the sake of this discussion, let’s set aside the irresponsibility of a firearm owner who fails to secure their firearms or teach their children not to play with them.
This is one situation where the expected or intended injury does not apply. It’s truly an accidental situation. Someone was handling the firearm and for whatever reason didn’t realize that it was loaded and they pulled the trigger, injuring someone, possibly even themselves. This takes us back to the insuring agreement that tells us that there is coverage for bodily injury because of an occurrence that happened during the policy period.
A self-defense shooting. A business owner is in the office and hears glass breaking. He comes out of his office to see someone reaching their arm in through a broken window. The business owner has his handgun. When the person breaking in gets inside, he sees the business owner and brandishes his handgun at the business owner. The business owner then pulls his handgun and shoots the intruder, who later on files a suit for damages related to his injuries.
You might say that a person breaking into someone else’s business shouldn’t be able to sue for damages when they are injured, but things happen.
Let’s look at the business owner’s CGL policy (CG 00 01 04 13) to see how it might respond.
We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies.
This is the insuring agreement for Coverage A – Bodily Injury and Property Damage. Again, for the sake of space, we will let you look up any definitions that you don’t already know. This is, of course, not the whole insuring agreement and you could look that up, too. It is important that so far, we have found the possibility of coverage for this event.
We need to look at the exclusions and if you’re a policy-reading person, you already know which exclusion we are going to bring up.
Expected Or Intended Injury
“Bodily injury” or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.
This exclusion is a little different but tells us essentially the same thing. If the insured intends to injure someone, this exclusion applies. There is an exception, which was in the homeowners’ policy, but relevant at that moment. If the insured is using reasonable force to protect persons or property, this bodily injury is not excluded. You could make the argument about what is considered reasonable in this instance, but for the sake of our conversation, let’s just consider what happened was a reasonable response.
What Cannot or Will Not Be Covered by an Insurance Policy?
It seems that the biggest reason that people want firearm owners to buy insurance on their firearms is to compensate someone else for what might happen with that firearm and that seems fair on the surface. If an accident were to happen with that firearm, the owner could be seen as negligent and, in that event, there should be a mechanism to pay the damages related to it.
But when you consider that the bulk of firearm deaths don’t come from accidents, that changes the conversation. Most firearm deaths occur in the commission of a crime or by suicide, both of which are arguably intentional acts, or an expected or intended injury, and the unfortunate truth is that many insurance policies simply do not cover those activities.
If we then consider that most deaths related to firearms are in some way intentional, not accidental, that begs one more question.
Can (Should) Insurance Be Used to Attempt to Improve Firearm Safety?
We’ve already covered how many insurance policies might respond to claims related to bodily injury related to a firearm. But that doesn’t address whether or not insurance could be used to improve firearm safety, or if it should.
According to a study by Johns Hopkins Bloomberg School of Public Health Center for Gun Violence Solutions in 2020, they ranked ways that people were injured and ultimately died in 2020. The highest cause of death in this chart was by poisoning (overdose), and the second highest cause of death was through the use of firearms.
What is more relevant to our topic today, is that the fourth-highest ranked cause of death was by motor vehicle traffic and the numbers for each are very close to one another (45,222 by firearm and 40,689 by vehicle accident). This seems instructive because some of the requirements being asked of firearm owners are similar to the requirements of vehicle owners.
Licenses. If you want to drive a vehicle in the United States, you need a valid driver’s license. We accept this because this is the law and has been for over 100 years in some parts of the country. In every state, there is an application to process, a written test, time spent driving as a learner, and a road test to make sure that the driver at least knows the rules of the road and the basics of the laws in that state.
Some states are working on laws that require all firearm owners to have a license to purchase and possess a firearm. Since these laws do not currently exist in all states, and many states have very different philosophies and laws around firearm licensing, we cannot comment on this, other than to say that it is possible that some might suggest that a license to own a firearm could or should exist.
Registration. When you purchase a car, motorcycle, or other vehicle, it has to be registered in your state. That’s the process where you either apply for registration at the car dealer, or you go to the motor vehicle office and get a license plate for your vehicle. Every vehicle needs to be registered.
There are those who say that the same thing needs to be done for firearms. When a person purchases a firearm, they could become the registered owner of that firearm and they will need to maintain the registration as long as they own it. You might be wondering what all of this has to do with insurance. Don’t you remember the last time you went to the motor vehicle office to update your registration? Didn’t you have to provide proof of insurance?
Insurance. When you drive or own a motor vehicle, you are supposed to have insurance in most states. There is at least one state that does not require drivers to have insurance, but they do require drivers to show proof of financial responsibility that meets a state minimum amount, so basically for most people, you need insurance there, too. If a driver is pulled over for a traffic violation or there is an accident, one of the first things that anyone asks for is proof of insurance.
When it comes to firearms, a good risk management practice would be to have some kind of insurance in place. For most firearms owners, that insurance would likely be in the form of their homeowners’ insurance, just like anyone driving a car would have automobile insurance.
This brings us to one of the misconceptions about insurance that came out in the above-mentioned survey. Many of the respondents believe that firearms owners should have a separate policy for each firearm. That would be unnecessary because there isn’t a per firearm limit of liability on the homeowners’ policy. It’s an occurrence limit.
Think about auto insurance. Each automobile that a person or family owns has the same opportunity to be in an accident as every other automobile because the same people are driving all of the cars on the policy. There is no need to purchase an auto policy per vehicle.
Let’s go back to the original question. Would insurance requirements help drive firearm safety? Consider this question in the light of automobiles. Everyone who drives is supposed to have a driver’s license, but according to one 2020 story, over 11 million people drive every day without a license because their license was suspended. The licensing requirement did not stop them from driving.
We are required to show proof of insurance to get a registration, but many people drive without insurance. According to the Insurance Research Council, 12.6% of drivers did not have insurance in 2019. Even when people do have insurance, there are millions of drivers who purchase the minimum insurance required in their state, so they do not have enough insurance to pay for the injuries that they could cause. The insurance requirement does not stop people from driving.
Rather than driving safety, an insurance requirement may only drive firearm sales into venues where purchasers do not have to show proof of insurance. Private firearm sales between individuals would be difficult to track and validate insurance coverage, just like a private automobile sale between two individuals is. Additionally, the insurance requirement may make firearm ownership more expensive for people, which could drive them from making their purchases at the gun shop where they check for insurance.
Automobiles and firearms are not the same thing and we aren’t saying that they are. People drive a car if they need to get to work, if they need to take someone to a hospital, or for many other reasons. They say that they have to drive a car and it doesn’t matter to them that they don’t have a license, registration, or insurance. As long as they don’t get caught, nothing happens to them.
This attitude could also be held by some people who feel the need to own a firearm. They may not care if they don’t have the proper licensing, registration, or insurance. They feel that they need it. They want it and they will get it. As long as nothing happens, nothing happens to them.
As we already discussed, there are no insurance policies available to handle the result if someone owns a firearm with the intent of harming other people or damaging people’s property. Therefore, adding an insurance requirement does not increase firearm safety.
The question then remains as to whether or not the insurance industry should be the driving force behind firearm safety. Insurance companies are limited by two major factors. Can they get their rules, rates, and policy forms approved by the states that they operate in? Will customers buy those policies?
It’s hard to pin down whether or not insurance companies should work to drive increased safety because the bulk of firearm related injuries are not necessarily accidental and therefore not the purview of the insurance company.
An insurance company should be involved in firearm safety as much as they are involved in safety in general. If they are helping their insureds to avoid fires, offering hurricane season tips, or other ways to combat common property losses, it seems reasonable that they would be involved in firearms safety. If they aren’t working to reduce other kinds of losses, any involvement in the firearms debate seems like the company is simply trying to be seen as “on the right side” of an issue, which might be part of their marketing plan, but doesn’t help in the overall reduction or management of risk.
Topics Gun Liability
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