Mandatory Insurance for Armed Professions is Normal

We see armed people working around us on a daily basis.  Some of these private professionals are highly visible such as guards for banks and armored car services and some are less obvious to the eye such as private investigators or detectives.  In almost all states there are requirements for them to have licenses and in most states they must have insurance or bonds that function as insurance.  But there is tremendous variation in the requirements and in the definitions and terminology of the various roles.

There are states which require insurance if and only if the person involved is armed.  For example, in California both private guards and private investigators only are required to have insurance ($500,000 for each of bodily injury and property damage) if they carry firearms.  Or, in North Carolina, private guards and patrol personnel are required to carry insurance whether armed or not but private investigators or courier’s are only required to be insured if they carry firearms.  In New York State security people only need licenses and insurance if they do such tasks over 50% of the time if unarmed but any amount of time if armed.

This means that we already have mandatory gun insurance in some situations in this country, with none of the problems projected by those who think it is not possible.  It also shows that the need for insurance protection is closely associated with carrying weapons and is not just part of the role of guard or investigator.

Private guards and investigators are thoroughly screened perhaps more carefully than holders of non professional weapons permits.  The application for North Carolina requires a fingerprint card, directly submitted questionnaires from 3 character references, clearances from local police at previous addresses and an Equifax credit report among many other requirements. Similar requirements are made by most states.  A security professional can lose their license or job because of incidents of irresponsibility as well as for crimes and has a great incentive to handle firearms with due care.

The need for insurance to protect the public both by compensating those hurt and by encouraging safe practices is likely to be greater for persons carrying weapons for personal reasons than for professionals.  They come into a wider variety of situations and they are not working under supervision in defined roles as are the professional armed persons.  A business even without the backup of insurance is likely to be able to pay if they cause intentional or negligent harm, while many individuals lack sufficient personal resources to be financially responsible.

All of these factors show that legislators should adopt laws requiring weapon permit holders to have the same level of insurance that is required of the armed professions.

New Bill SB2646 for Gun Insurance in Illinois Covers Intentional

Illinois Majority Caucus Chairman Ira I. Silverstein has introduced a new bill (SB2656) in the Illinois General Assembly to require that gun owners have liability insurance.  This bill covers willful as well as accidental shootings by the owner or others.  It covers lost or stolen guns until they are reported.

This would be very helpful legislation if adopted as introduced and could form the basis of a more detailed and developed requirement to cover more victims.  Because it designates continued responsibility for unreported stolen guns it recognized the important of gun theft for supply to illegal gun possession.

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Voluntary Insurance and Strict Liability as Good First Steps

Much of this blog is about how insurance should be designed and how it would work if an ideal insurance mandate was in place.  Opponents of such a mandate point out real and imagined problems that would prevent such insurance from working.  When the possibilities are examined the problems turn out only to apply to particular models of insurance and can be avoided by designing the insurance for the particular nature of guns and gun violence.

But there are also transitional problems that could block adoption of an insurance mandate that would work well once it was in place.  The most important of these problems is the fact that gun insurance that would protect victims does not exist currently.  The insurance that is designed to protect gun owners from accidental or self-defense incidents is very narrow and is not adapted to the need to protect victims even to the extent that existing liability laws could allow the redress in the courts.

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Federal Mandate for Top-Down Insurance

A federal requirement that all manufacturers and importers have insurance that protects victims of their products with a top-down provision requiring it to continue until replaced is the core of a successful system for guns. Ideally this requirement would specify the terms and benefits laid out in the next level for state legislation that seriously provides for victims, but this will describe the minimum requirements that should be specified on a national level.

A bill (H.R.1369) proposing mandated gun insurance was introduced in the United States Congress in 2013, but it did not specify details of the insurance required in the language of its introduced.

The legislation should require that, before manufacturing or importing a firearm, insurance must be accepted by an insurance company specifically authorized to issue such insurance by some state. In order to make certain that the required financial stability is available, all such insurers should be required to join a pool backed by all such insurers guaranteeing each insurers ability to pay valid claims. Once an insurer accepts responsibility for a certain gun, that responsibility is only relinquished when another qualified insurer takes it on. Continue reading

Should Gun Owner’s Insurance Pay Victims After Gun Theft?

The insurance model recommended by this blog is designed to have insurer retain responsibility for guns after they are stolen.  That means that if a responsible gun owner has a burglary and a gun is stolen and then after the gun changes hands, goes underground and turns up to injure someone in a distant location then the gun owner’s insurance will have to pay.  Gun defenders are quick to object and say that the burglar and the shooter are responsible and the gun owner shouldn’t be held to account for their acts.

In those cases the criminals are, of course,  responsible and if they can be caught and have resources they should be the first to pay to the injured party.  Unfortunately, they often aren’t caught and they don’t have resources and, if they go to prison for their crimes, are unlikely to earn enough in the future to redress the damage they have done.  So the question is should the legal gun owner or the gun owner’s insurance be held responsible in light of their role as enablers of this unfortunate situation.  My answer is that they should be.

Guns are unique among the common articles in our society because they are widely held in large numbers, intentionally designed and made to be effective in killing and injuring persons, and easily transferred into prohibited hands. At least 200,000 and probably twice that or more guns are stolen each year and, because they have serial numbers, do not return to legal hands. Illegal guns almost all start out as legally held ones; there are no significant reports of clandestine gun factories and smuggling across international borders goes from the US to other countries.

Common Law on the subject

There are two mechanisms of judge made law which seem to apply, but judges have not generally made a determination that they should be used for guns that are stolen.  The first is to take into account the fact that a gun is a particularly dangerous object and apply a rule of absolute liability for the harm done by this object as is often done for users of explosives and keepers of dangerous wild animals.  It’s probably not entirely coincidental that guns are powered by explosives and stolen guns injure people when they ‘get out’ into the public.  The second is to have a presumption of negligence under the doctrine of res ipsa loquitur (lit. the thing speaks for itself), the point here being that it’s fair to assume that allowing a gun to be stolen implies that there must have been some negligence.  Just because judges have not widely applied these doctrines on their own to guns does not mean that such a responsibility could not be legislated.

An example of legislation on a similar subject

An example of how this is done in other areas is provided by the dog bite laws in various states.  In California the statue says:

(a) The owner of any dog is liable for the damages suffered by any person who is bitten by the dog while in a public place or lawfully in a private place, including the property of the owner of the dog, regardless of the former viciousness of the dog or the owner s knowledge of such viciousness

I asked a famous dog bite lawyer in California if this would apply after the dog was stolen as was told that as far as he knew there had been no such cases in the courts. His website states that he has never seen the defense of non-ownership succeed.   In res ipsa cases theft is often taken as a sufficient intervening cause to break the chain of negligent responsibility, but that is not a universal rule.  Holding gun owners responsible after their gun gets out of their hands is a matter of policy.  This is a policy badly needed to protect the legions of victims of such guns which should be adopted by legislatures.  Insurance is the most logical mechanism to enforce this policy.

Questions and Answers on Mandating Gun Insurance.

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This post is a good place to start if you’re new to this blog.  Scan the questions and follow the <More> link if you have an interest in a particular area

Q: What is the purpose of mandating gun insurance?

Required insurance for guns or gun owners should be designed to provide benefits for victims of gun accidents or violence. Insurers will automatically take appropriate steps to encourage gun safety as part of their loss control and underwriting activities. <More>

Q: What specifically would be the best insurance system for guns?

Each state should adopt a system of no-fault insurance with a system of delivering medical and cash benefits directly to victims. This insurance should be required to be in place for any firearm brought into or kept in the state in order for that firearm to be legal. It should provide all of the benefits available to victims of motor vehicle or workplace injuries.

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CCW Permit + Stand Your Ground = Insurance Need

Many states have adopted stand your ground laws that protect shooters in public spaces that accidently(with or without negligence) either unintended bystanders or innocent persons who are wrongly believed to be a threat.  This is the most uncontroversial situation where insurance should be required.  These innocent people need to be protected and many of them are not insured themselves.

As this blog has argued people who have permits to carry weapons into streets and outside the home.  These people are more likely to confront real and perceived threats with an audience of bystanders.  They represent an additional risk over those who only have guns for protection in their homes.  These risks and the relative ease of insuring against it are described in another post “Enacting a Concealed Carry Insurance Mandate

For example the Florida Statute states:

776.012 Use of force in defense of person.—A person is justified in using force, except deadly force, against another when and to the extent that the person reasonably believes that such conduct is necessary to defend himself or herself or another against the other s imminent use of unlawful force. However, a person is justified in the use of deadly force and does not have a duty to retreat if:

(1) He or she reasonably believes that such force is necessary to prevent imminent death or great bodily harm to himself or herself or another or to prevent the imminent commission of a forcible felony;

And:

(1) A person who uses force as permitted in s. 776.012, s. 776.013, or s. 776.031 is justified in using such force and is immune from criminal prosecution and civil action for the use of such force. . . .

The courts have not yet ruled on whether this immunity is as absolute at it appears to be on it’s face.

The law does say that it have to be a reasonable belief, but one can have a reasonable belief for the few seconds it takes to shoot and still have a chance to avoid the killing if they took a few seconds to more deeply assess the situation.  The black object being drawn from a hip pocket may turn out to be a cell phone.  Retreat probably does include holding off till you’re sure of the situation.  And then there is the situation of missing and shooting a third party.  If immunizing a person against civil action has any real meaning, it that a person who is negligent in not retreating or holding off till the situation is more clear or the danger to bystanders is reduced is the person protected.  Regardless of whether one thinks that this law is good policy, protection of the innocent requires that insurance be available to protect those victims.  Not liability insurance; liability is removed by this law, but no-fault insurance for the benefit of the innocent victim.

Unfortunately, the political situation in exactly those states which pass this kind of law is one that would be most resistant to any requirement of gun owner or permit holder insurance; but we should press legislatures anyway.

Enacting a Concealed Carry Insurance Mandate

While it would be ideal to have a gun insurance adopted at a single time as one well designed national mandate, it’s likely that political reality will force it to come into being in stages.  The logical place to start is for the more amenable states to require insurance for holders of permits to carry firearms in public.  If this can be extended to general coverage of guns in some of these states, the stage is set for a federal mandate for top-down insurance which extends into any state requiring insurance.  This in turn will encourage other states to have their own requirements in order not to have their citizens paying for insurance without their state receiving benefits for victims.

1. Concealed Carry as a Start and End in Itself

Mandating gun insurance for holders of permits to carry weapons in public is much simpler than mandating gun insurance in general.  Permit holders are already registered with state government agencies; there is no need for an additional registration system.  They are generally responsible people who have already shown their willingness to cooperate with reasonable regulations.  Insurers will find these people to be desirable customers.  Most measures to deal with gun violence have to deal with the flood of illegal weapons that come from states with weak regulation of gun trafficking.  But, states requiring insurance for permits can simply refuse to recognize permits from other states without insurance requirements or require proof of insurance in addition to such a permit.

Starting by requiring insurance for permit holders is not only easier to implement, but it will address quite a few additional dangers for guns carried in public that do not apply to guns kept for self-defense in the home:

  • Citizens who do not want to be exposed to the dangers of guns have no choice to avoid them.
  • People carrying guns often need to leave them in cars or other less protected places, encouraging theft and misuse.
  • The new “Stand Your Ground” laws often prevent innocent citizens injured in incidents from receiving compensation in shooting incidents.
  • Private property owners and businesses may be at legal risk from the guns brought by their visitors and customers.
  • The “bad guy” in a situation may respond with additional violence perhaps turning a robbery into a murder.

These additional dangers give the states an incentive to make this requirement.  Several states have instituted a provision for issuing these permits under great pressure from gun proponents or even in the case of Illinois from a federal court.  In other cases the state legislature has reluctantly expanded the permit system from a “may issue” system where local law enforcement officials may or may not approve the issuance of a permit based on the need in the particular case to a “shall issue” system where permits must be given to any person meeting defined requirements.  Those states which are uncomfortable with their system of issuing permits are likely to welcome required insurance as a way to provide a guarantee of responsibility on the part of permitees.

Enforcement of the insurance requirement can be made through the permitting process and because it is attached to the person holding the permit rather than directly to identified guns there is no limit to legally owned firearms.  Invalidation of the permit is a readily available way to enforce continuance.  The benefits can be defined by reference to a pre-existing system such as worker’s compensation in any state or no-fault motor vehicle insurance if available in that state.

Example of Possible Legislation for Carry Permit Insurance

 

AN ACT

Relating to requiring insurance for Concealed Carry Weapons Permits and establishing strict liability for injuries and death resulting from firearms used under such permits.

 

SECTION 1. As used in sections 2 to 5 of this Act:

(1) “Covered Firearm” means any firearm owned, controlled or used by a Covered Person.  Includes any otherwise included Firearm which is lost or stolen until the loss or theft is reported to a law enforcement agency in the area where the loss or theft occurred.[a]

(2)  “Covered Person” means any person holding a [Name of Permit].[b]

(3) “Evidence of Insurance” means a card issued by an insurer authorized to issue Firearm Permit Insurance which lists the name of the Covered Person and the dates of coverage and certifies the existence of Firearm Permit Insurance.

(4) “Firearm” has the meaning of any firearm or other weapon that is covered by [Name of Permit].[c]

(5)  “Firearm Permit Insurance” means insurance issued to comply with the requirements of this act by an insurer authorized to issue such insurance by the [State Insurance Regulatory Agency].

(6) “Issuing Agency” means [Name of state permit issuer]

(7) “Worker’s Compensation Equivalent Benefits” means all benefits that would be provided for a similar injury or death arising out of employment under [Workers Compensation Law].[d]

SECTION 2.  Worker’s Compensation Equivalent Benefits Requirement

(1) Firearm Permit Insurance must provide Worker’s Compensation Equivalent Benefits to any person injured in an incident involving a Covered Firearm.[e]

(2) A person injured after display, use or threatened use of a Covered Firearm is considered to be injured in an incident involving the Covered Firearm, regardless of the actual agency of injury.[f]

(3) A person injured in the act of a felony that started prior to the display, use or threatened use of the Covered Firearm may be denied Worker’s Compensation Equivalent Benefits by the insurer.[g]

(4) For the purposes of this section the average wage of any injured person whether or not actually employed or employable shall not be considered less than the average weekly wage of the state.[h]

(5) The minimum death benefit provided for a person killed in an incident involving a Covered Firearm is $100,000.[i]

(6) Nothing in this section will be construed to relieve the owner or user for liability incurred because of injury involving a Covered Firearm.[j]

SECTION 3. Liability Insurance Requirement

(1) Firearm Permit Insurance must provide liability coverage to each covered person in an amount of not less than $500,000.

(2) The liability insurance must cover liability for negligent injury caused by a Covered Firearm in any location.[k]

(3) The liability insurance must cover all liability incurred under section 5 of this act.

SECTION 4. Requirement and Proof of Insurance

(1) Any Covered Person must maintain Firearm Permit Insurance in place at any time a [Name of Permit] is in effect.

(2) A [Name of Permit] is immediately invalidated upon lapse of Firearm Permit Insurance due to expiration, failure to pay premiums, failure to comply with requirements of the insurer or other cause.

(3) An insurer issuing Firearm Permit Insurance must notify the Issuing Agency prior to lapse of Firearm Permit Insurance.  The insurer is responsible for claims under the insurance for incidents that occur prior to 30 days after that notice.[l]

(4) Failure to return the [Name of Permit] to the Issuing Agency within 10 days of lapse of Firearm Permit Insurance is grounds for refusal to reissue the permit for a period of 2 years.

(5) At any time a [Name of Permit] is required the Covered Person must have Evidence of Insurance available for immediate inspection.[m]

SECTION 5. Strict Liability for injuries involving Covered Firearms

(1) The owner or user of a Covered Firearm is liable without consideration of negligence or intent and regardless of any other law granting immunity for any injury involving the Covered Firearm at any location other than that person’s home or a place of business under that person’s control.[n]

(2) This section does not apply to any injury where the injured person is in the act of committing a felony that started prior to any display, use or threat of use of the Covered Firearm.


[a] An important reason for including stolen firearms is that a gun may be taken from the Covered Person or from a place or vehicle where it was left by the Covered Person and used by another.  This is one of the major risks of carrying firearms in public places.

[b] A law enforcement officer is not generally required to have a permit and so would not be covered.

[c] In most states this means that the insurance will not cover long guns.

[d] All states have worker’s compensation insurance systems.  Use of these systems will allow effective insurance to be defined without setting up a new system.  Due the much smaller number of injuries due to guns than to employment accidents this is efficient.  It is also desirable to use an existing system so that the practicality of the system is demonstrated by the preexisting experience.  Most state worker’s compensation systems have rules for intentional acts by co-workers or third parties and for self-inflicted injuries that are workable when applied to gun injuries.    Opportunities for fraud by injured persons are much more limited than in worker’s compensation or in no-fault motor vehicle insurance because guns rarely cause the kinds of soft tissue injury that leads to uncertainties in the diagnosis or required treatment.

[e] Incidents that are covered by the insurance are not limited to those occurring in places where the permit is required.  This is appropriate because persons having permits are more likely to have injuries produced by the permitted firearms in their homes and places of business.  They may have additional weapons and keep these weapons outside of locked storage in readiness for taking them into the community.

[f] An example of another agency is that the use or threatened use of a Covered Firearm may elicit return gunfire or other hostile behavior from the person against whom the use or threat was directed.  A person may also be injured in attempting to flee the area where the Covered Firearm was used.

[g] The limitation of the denial to felonious acts started prior to the use of the Covered Firearm is because after the incident starts, there may be a response with an unclear or controversial nature.  It insurer should not be allowed to use this uncertainty to deny coverage.

[h] Average weekly wage is defined in most state worker’s compensation systems.  It is important that there be compensation to persons who are not employed currently or are unemployable due to being children, having the duty to care for another person or being disabled prior to the shooting incident.

[i] This is higher than for motor vehicle insurance in most states, but should not be excessive for the states likely to initially adopt this insurance requirement.  In most cases the limits for motor vehicles were adopted in the past and would be higher if set today.

[j] Worker’s compensation insurance usually relieves employers of other liability.  It is not the intention of defining benefits as Worker’s Compensation Equivalent Benefits include this limitation on gun owners responsibility.

[k] The Strict Liability in Section 5 is limited to places outside the Covered Persons home or business.  Negligent liability should apply everywhere as it not does.

[l] This gives the issuing agency time to invalidate the permit and take other enforcement action.

[m] A law enforcement officer who stops a person with a Covered Firearm will be able to check the card in order to take enforcement action.

[n] This language is intended to override any “Stand Your Ground” or other immunity law.  The limitation to places other than a home or place of business is to limit the strict liability to places where the permit is required.

The Need for State Regulated Gun Insurance with a Federal Mandate.

The answer to the question of whether we need to mandate gun insurance at the federal or the state level is to have the mandate at the federal level and the regulation of the insurance at a state level.  The special problems that guns have of illegally traveling across state lines to do their damage and of states varying so much in their willingness to regulate guns can be solved by this structure.  The federal mandate should implement the top-down process for continuing insurer responsibility advocated by this blog.  It should require that the insurance pay benefits to victims in accordance with the gun insurance requirement in the state where the shooting occurs.

One of the special difficulties that makes guns different than almost any other risk, is that move around from state to state so easily once they are in illegal hands.  Much of the country has a relatively small problem with illegal guns and people there see no need to make access difficult.  In other parts of the country, there is a major problem with death and injuries from illegal guns.  No matter how carefully places like New York, Chicago and Washington, DC work to stop the transfer of firearms to dangerous people they cannot control the flood of weapons that come in from areas with more permissive policies. The process has been named the Iron Pipeline.

This blog believes that requiring insurance is a practical way to deal with the problem.  Insurers that remain responsible for deaths and injuries from guns after they pass into illegal hands will set up conditions to prevent that passage.  They will find ways to do this that are minimal inconveniences to legitimate gun owners.  The question is how to get a requirement for such insurance into place in this environment.  The states that sell the most guns are least likely to make such a mandate.

Insurance in this country is normally regulated by the states.  The McCarran-Ferguson Act requires that if Congress wants to regulate insurance on a federal level, it must do so  explicitly.  The two major models for gun insurance, worker’s compensation and motor vehicles, are handled by the states.  It’s likely that gun insurance will also be state based but will require a federal mandate to make certain it is in place.  The certainty should come from a “top-down” requirement that makes a insurer retain responsibility for a particular gun until and unless responsibility is picked up by another insurer, regardless of any intervening events such as loss, theft or illegal sale.

The way to handle the need of some states for strong protection from the consequences of firearm injuries and of the desire of other states to put no expenses or limitation on the acquisition of firearms is to have the federal requirement specify that the benefits paid by the mandated insurance be set by the insurance requirement of the state in which the gun causes the injury.  If an insurer does not want to be exposed to the more generous requirements of some states then that insurer will take steps in the terms of the insurance to insure that the gun does not travel to those states.  For example, if Virginia has small benefits and New York State has generous benefits, then insurers will have an incentive to make sure that guns are not illegally sold to people who will take them to New York and sell them on the streets.

Once Congress is considering such a requirement the states will have an incentive to adopt a gun insurance requirement for guns sold in their own states in order to protect their citizens from illegal guns that come from outside their borders.

Paths to Adopting Gun Insurance, General and Concealed Carry

While it would be best to adopt gun insurance in the United States by national legislation that puts into place a full blown no-fault plan with the “Top-Down” provisions to guarantee that it covers all of the millions of guns in the country, it is not necessary to wait until that is politically feasible to make progress in protecting victims.  There are several paths where an important part of this protection can be implemented both for it’s own value and to demonstrate the practicality of more complete plans.

The first and the one that already in the public eye is to adopt compulsory liability insurance for gun owners who are registered in particular states.  This is the plan that is being offered in state legislatures.  It would apply to a fairly small subset of the injuries and killings because it has no way to be in effect for illegal guns.  But, as the proportion of gun injuries from legally possessed guns is going up due to a downward trend of crime in general and a greatly increased spread of legal guns, it would have a substantial value.  It may very will be accomplished in some places in the next few years.  This is the type of adoption that is seen by most writers who suggest insurance in the mass media.

The most promising step by step path at this point starts with requiring insurance for concealed carry permit holders.  Because they are already registered in all but a very few states, there is not the privacy concern that applies in other cases.  It is also likely to be more acceptable because it only burdens gun owners with a clear and increased interaction with the community.  Because many state legislatures have adopted laws legalizing concealed carrying of weapons in recent years and because the problems widespread guns in public places have been made more clear by the killing of Trayvon Martin and the acquittal of George Zimmerman, this may be the most political feasible path. It is also an approach which will work well on a state by state basis.

This blog is planning to advocate for concealed carry insurance in this and the coming state legislative seasons.  To repeat the recommended provisions in the recommended legislation from the blog above, they will include:

  1. It should pay injured persons without the need for establishing negligence.  i.e. it should be no-fault insurance.
  2. It should cover economic losses, survivor’s needs, disability and pain and suffering and have a substantial death benefit.
  3. It should apply not only to the injuries caused by the legal carrier’s gun but to injuries caused by others including a criminal attacker during an incident involving the use of the covered persons gun.
  4. It should cover legal liabilities of third parties that arise from gun use incidents.
  5. Insurers should be required to report discountenance of the insurance to the permitting authorities 30 days before the insurance goes out of effect.
  6. Insurers offering homeowners insurance will be required to offer concealed carry insurance riders with exclusions and qualifications regulated by state insurance commissioners.

The way most analyzed in this blog is adoption of insurance with a sequence of structures that make it apply a larger and larger set incidents and victims.  This sequence which is detailed in other posts in this blog goes as follows:

  • Step 0 – Adopt laws clarifying the legal liability of shooters and gun owners.  This is needed for itself and for the effectiveness of liability insurance.
  • Step 1 – Liability insurance for guns.  Because this depends on fault by gun owners and the tort law system, it gives limited protection to victims.
  • Step 2 – Liability insurance with direct payment to victims.  This allows easy coverage of intentional acts and guns that are used by others than the owner.
  • Step 3 – No-fault insurance to protect victims.  This eliminates the need to use the tort law system and to establish negligence.  It can cover all of the injuries from legal guns but has no way to get the large number of incidents that are produced by illegal guns.
  • Step 4 – Insurance that covers guns with a “Top-Down” guarantee that is in place for lost, stolen or diverted guns.

Insurance at the Step 3 level exists in various states for motor vehicles and worker’s compensation insurance is designed to work at this level.  The need for the the last step is much less for these activities because regulation and registration of car owners and employers is nearly always available.