The Author

Charlie KingdollarInsurance Industry Expert

Charlie spent more than four decades with General Reinsurance, three-quarters of which as the company’s Emerging Issues Officer. One colleague described him as “one of the most prescient and gifted industry futurists I have met in my 36 year professional career within the insurance industry. Entertaining and insightful, his ability to digest and communicate complex issues, many before they are readily apparent, is both a gift and a talent.” Charlie is also a member of the Editorial Board of Advisors for the Journal on Emerging Issues in Litigation.

The Shifting Gun Liability Landscape: Plaintiffs Say Companies are Marketing Illegally, Insurers End Up Paying

By Charlie Kingdollar

On Feb. 15, 2022, Remington Arms, manufacturer of the Bushmaster AR15-style rifle agreed to pay $73 million to settle a lawsuit filed by the families of nine of the victims of the Dec. 14, 2012, Sandy Hook Elementary School shooting. The $73 million will be paid by four of Remington’s insurers (and likely their reinsurers).[i]

Why is this a big deal? Insurers and reinsurers providing liability coverage for gun manufacturers did so believing that federal law protected gun manufacturers from liability arising from shootings under the federal Protection of Lawful Commerce in Arms Act (PLCAA). It seems likely that policy terms and conditions as well as pricing of the risk reflected that perceived liability protection.

Things have changed. The Connecticut plaintiffs filed their suit under the Connecticut Fair Trade Practices Act. The plaintiffs alleged that the Bushmaster was a combat weapon and that Remington improperly marketed it to civilians – particularly trying to reach young men. In 2019, the Connecticut Supreme Court ruled that the federal PLCAA did have some carve-outs for state laws and subsequently declined Remington’s request to dismiss the lawsuit. It seems a safe bet that the families of other Connecticut gun violence victims will file similar suits over past and/or future incidents.

Okay, so this is Connecticut. But it seems likely that this lawsuit will be used as a template by plaintiffs in other states that have similar statutes – and many do. This lawsuit and settlement could result in burgeoning litigation against gun manufacturers.

Presumably, even a single victim shot with a Bushmaster, or any gun that could be argued is a combat weapon, could file a similar suit under a state’s Fair Trade Practices Act.

Which other guns could be deemed “combat weapons” and therefore unfit for civilian populations? Only time and future litigation will tell. One possible example is the WEE1 Tactical, the manufacturer of the AR-15, which is similar to the Bushmaster, may find itself facing litigation. A look at AR-15-style guns on Wikipedia results in a list of 27 guns by 26 manufacturers – and I doubt this is a comprehensive list.[ii] Would a machine pistol be considered a “combat weapon”? How many other types of firearms might be deemed “combat weapons”?

WEE1 Tactical has recently begun advertising the JR-15 – a smaller, lighter version of the AR-15 that fires smaller .22 caliber rounds for use by children. WEE1’s website states: “The JR-15 is the first in a line of shooting platforms that will safely help adults introduce children to the shooting sports.”[iii] Given that the plaintiffs in the Sandy hook case stressed the firm was specifically marketing the Bushmaster to young men it will be interesting to see how this marketing strategy will play out in any future similar litigation.

There’s been another crack in the perceived liability protection afforded to gun manufacturers in the U.S.  Last year the State of New York enacted a law that “would classify the illegal or improper marketing or sale of guns as a nuisance…that supporters said would bolster litigation against gun companies.”[iv]

Will other states follow? If even a few enact similar statutes, the defense and indemnity costs could be significant to the gun manufacturers and their insurers and reinsurers.

Bushmaster has settled once before with the families of victims shot by one of its guns. In 2004, the company agreed to pay $2.5 million to settle with the families of victims shot by the D.C. sniper.[v] Not much changed after that settlement. It may be different this time.

What about other entities in the gun liability chain? If the gun manufacturer can be held libel for marketing a combat weapon to civilians, can wholesalers and retailers also be found liable?  Could courts find that these companies also played a role in putting “combat weapons” into the hands of civilians?  If so, the costs to the Property/Casualty insurance industry will be greater.

Unfortunately, mass shootings and gun violence are on the rise in the United States. The number of mass shootings (defined as 4 or more people shot – killed or wounded) have increased every year except one from 2014 to 2021. In 2014 there were 269 mass shootings in the U.S.  By 2021, this increased to 691 mass shootings. There have been 2,402 mass shootings in the U.S. in the past five years. And we’ve only mentioned mass shootings incidents.[vi]

Gun violence generally continues to rise. “Guns were involved in 75% of all homicides and 91% of homicides involving youths between 2018 and 2019 … those new numbers represent a significant and troubling uptick from a decade before.”[vii]

I suspect insurers and reinsurers providing liability for companies that manufacture and sell guns find themselves as defendants in an increasing number of lawsuits.

[i] https://www.washingtonpost.com/nation/2022/02/15/remington-sandy-hook-settlement/

[ii] https://en.wikipedia.org/wiki/AR-15_style_rifle

[iii] https://en.wikipedia.org/wiki/AR-15_style_rifle

[iv] https://www.nytimes.com/2022/02/15/nyregion/sandy-hook-families-settlement.html?referringSource=articleShare

[v] https://www.washingtonpost.com/nation/2022/02/15/remington-sandy-hook-settlement/

[vi]   https://www.gunviolencearchive.org/

[vii]   “Gun Deaths Continue to Rise In American Cities,” U.S. News, 1/10/22