Coverage for Workplace Violence Expands

Friday, March 2, 2001 | 0

Not too many days go by without a news story about violence in the workplace. A new phrase has been coined to describe this disturbing trend: desk rage, acts such as screaming at coworkers, throwing paper, pens and other objects, and other acts of violence, unfortunately.

Recently there was a fatal outburst by an employee of Edgewater Technology, an Internet company near Boston. 42-year-old Michael McDermott vented his frustration there by killing seven co-workers to protest his company's approach to his tax problems. In Camarillo, California, a displaced worker with a history of mental problems returned to his former place of employment and gunned down the CEO of the software company in front of stunned co-workers. The list of tragic examples is long.

Insurance coverage for workplace violence has become more common place, outside of workers' compensation. At least three insurance industry participants have responded with workplace violence coverage.

Experts blame a heightened level of stress in the workplace with increased pressures for production in the Internet Age and almost daily scrutiny of stock prices.

'The last cycle of workplace violence in the mid-'80s pales [in comparison] to today's [office] environment for one big reason-never has the stress been so high,' said Peter R. Taffae, president of e-perils.com, a division of Worldwide Facilities and an Internet-based wholesale brokerage firm in Los Angeles, to National Underwriter Company reporter Caroline McDonald.

'This dot-com thing is actually playing a big role in workplace violence in general,' he said. 'A year ago, if we got one inquiry a quarter, we would have been excited. Now we're getting three or five a week. It's a big deal'

Internet and software companies are especially vulnerable because of the expectations and stressful work environment they sometimes create, Mr. Taffae says.

The Department of Justice publishes statistics, and they reflect that approximately two million people each year are victimized by violent crime in the workplace. Insurers are responding to market needs with new policies to assist companies with such tragedies. Some of these policies overlap with workers' compensation benefits, and should be chosen carefully according to your state's work comp jurisdiction.

For example, coverage offered by e-perils.com is a stand-alone policy with limits ranging from $1 million to $25 million. Covered individuals can include employees (which would overlap with workers' compensation), former employees and non-employees (whom would not be covered by work comp).

In addition to $50,000 death benefits for families, medical rehabilitation costs for injured workers, and the costs of psychiatric counseling (from a professional chosen by the individual), the policy covers company expenses that may be incurred before or after and incident which would include costs for public relations activities (generally provided by a recommended public relations firm) and crisis management that might be needed after an incident, as well as the costs of threat assessment prior to any incident. Defense and indemnity payments for third-party claims arising out of violent acts by non-employees and business interruption expenses are covered. Coverage for punitive damages also is apparently available (though it might be noted that punitive damages cannot be covered under California law).

Lexington Insurance Company, out of Boston, Mass., and Chubb Insurance Group from Warren, N.J., also offer workplace violence coverage.