How the Classification of the Las Vegas Attack Affects Insurance Coverage:

After the Las Vegas mass shooting, over 450 people have filed lawsuits against entities that should have taken preventative measures to thwart the incident. Victims have sued Mandalay Bay, MGM Resorts International, and Live Nation Entertainment Inc., for failing to provide sufficient security the night of the deadliest mass shooting in recent U.S. history.

Since the shooting, questions arose over how the shooter—Stephen Paddock—had not raised suspicions of hotel staff. Police found over 20 guns inside his suite and discovered that he carried in over ten suitcases of guns to the room over several days. Many of the victims who have filed claims have questioned how the hotel staff didn’t notice anything unusual about Paddock’s behavior.

If the victims of these mass shootings are successful in their suits against any of these entities, what role will insurance play in the outcome? One debate in the media is whether the incident is labeled as an act of terrorism. But why is that important?

Whether the incident is labeled an act of terrorism is important for a number of reasons, but particularly for the issue of insurance. Insurance policies generally exclude terrorism related losses unless it is specifically endorsed onto the policy. As a result, whether the incident is deemed an act of terrorism could impact you or your business.

To look if a policy includes coverage for acts of terrorism, look for the acronym TRIA. TRIA stands for Terrorist Insurance Act. In order for an incident to be deemed an act of terrorism, the Secretary of Treasury must certify it as so. This requires that the act be violent and driven by the desire of an individual or individuals to coerce U.S. civilians or government—a somewhat vague definition. Further, the definition of a certified act of terrorism has been expanded to cover both domestic and foreign acts of terrorism.

Depending on the motive of the shooter, one may or may not be covered under their commercial policy unless they have elected TRIA coverage or specifically included it in their policy.

At Kerr & Wagstaffe LLP, our attorneys specialize in insurance policyholder rights. To learn more about the attorneys and their insurance practice, please explore the links at the top of this page.