Insurance: Please don’t buy this!

135354-RumorsJust because someone offers a product, that’s no reason to buy it.  Some just don’t make sense, except perhaps in an alternative universe.

The newest entrant in this category is something called “Active Shooter” insurance.  These policies first appeared on the market in 2015 and are designed for business owners.

Now let’s think about this.  The US averages 51 deaths due to lightning strikes per year (source: NOAA).  It’s probably fair to assume that this averages one death per lightning event.  The most common activity among victims when hit by lightning was fishing.

Now, between 2000 and 2013, there were an average of 11.4 mass shooting events in the US each year (source FBI).  This number has risen recently, of course.  The FBI reports 20 such incidents in each of 2014 and 2015.  The number of people killed per event is greater than in the case of lightning strikes, but still, there were only 20 of these.  There were 20.9 million business in the US as of 2010 (Census), so the odds of a business incurring an active shooter event is 0.0000095694%.

The business has a much better chance of being hit by lightning.  How many businesses have lightning rods?

By the way, if you believe in Apocalypse theory, most insurance policies exclude claims due to “acts of war.”  Earlier this week, commentators on Fox endorsed the US “declaring war” on ISIS.  That recommendation would elevate ISIS to the status of a country AND eliminate some insurance protections Americans do have.  That’s why you don’t listen to Fox.

Anyway, Active Shooter insurance seems to me to be a silly way for the paranoid to waste money.  If you have money to waste, I can think of lots of better ways.