Gun liability insurance offers potential new business for Bermuda market
New gun bill in the US could mean a potential new revenue stream for Bermuda reinsurers.
A bill filed in Massachusetts Friday would require gun owners to purchase liability insurance to cover instances when their weapons are used to injure.
Some say that insurance policies would give those injured by a weapon a legal recourse while also creating incentives that could reduce accidents and fatalities.
“Insurance companies were able to discourage smoking through the marketplace and make cars safer through the marketplace,” said the bill’s sponsor, state Representative David Linsky.
Should the legislation catch on to other states, the demand could create a niche market for reinsurers in Bermuda.
The gun business is booming in the US - according to The Daily Ticker, a blog on YahooFinance. With 51,000 gun shops in the US, the firearms industry’s economic impact there is $32 billion up from $19 billion in 2008. Today’s market size is the same as the US organic industry and more than the budget of Nigeria.
But the bill faces steep opposition as gun rights advocates oppose the bill saying it amounts to more government regulation aimed at law-abiding gun owners.
Supporters say that gun owners could see their insurance costs drop due to financial incentives built into insurance policies — including the safe storage of guns, the completion of firearms courses and rewarding owners who secure against the possibility of theft.
Rep Linksy compares the proposal to the requirement in some states that a car-owner buy insurance before being allowed to register a vehicle.
“You don’t have to own a gun,” Linsky said. “You don’t have to drive a car.”
Under the bill, there would be financial penalties for anyone found in possession of a gun without insurance, ranging from $500 to $5,000 or up to a year in jail.