Sustained immigration enforcement activity and related protests are creating new operational and risk management challenges for public entities and businesses across the United States, according to experts cited by businessinsurance.com.
Federal immigration raids in Minneapolis in January and demonstrations that followed in several cities have increased the need for organizations to reassess business continuity planning and risk mitigation strategies.
Public entities such as cities and school districts, as well as farms, factories, hospitals, and other businesses, are operating in a heightened risk environment, according to experts. The increased activity has also led to more claims associated with civil commotion and social unrest.
Civil Unrest Claims and Insurance Considerations
Claims linked to civil unrest are becoming more common, particularly those involving property damage. Tamika Puckett, Atlanta-based public entity leader at Protecdiv and a former municipal risk manager, said insurers are seeing more claims tied to these events.
“We’re starting to see more claims come in,” Ms. Puckett said.
According to Ms. Puckett, property damage claims are more common than liability claims in these situations. However, insurance coverage can vary. Many policies exclude losses arising from government actions, and some include immunity protections for law enforcement.
Cyber liability and data privacy coverage may also become relevant. Some databases contain personally identifiable information and protected health information that federal immigration officers can legally access. However, Ms. Puckett said complications can arise if access occurs through third-party application providers and includes information that should not be shared.
“The line gets blurred,” she said.
Coverage Options for Disruption and Property Loss
Organizations may need to review their property insurance policies to confirm that coverage includes losses from civil unrest, riots, or looting. Such losses can include property damage and business interruption.
Jorge Aviles, a shareholder in Anderson Kill’s Washington office, said civil authority coverage may help address certain business interruption losses. For example, restricted access to buildings, road closures, or curfews issued by government authorities could disrupt normal operations.
Political risk coverage may also be an option for policyholders to consider, Mr. Aviles said.
School District Response and Captive Insurance Role
Public school systems are also responding to the operational challenges created by immigration enforcement activity.
Melissa Hollingsworth, deputy chief risk officer for the Los Angeles Unified School District, said the district has established protocols for handling immigration enforcement actions on campus. However, the situation requires ongoing adjustments.
The district, which operates about 950 locations and is the second-largest public school district in the United States, has focused on maintaining student and staff safety while preserving continuity of operations.
Balancing those priorities has proven difficult, Ms. Hollingsworth said.
The district’s captive insurance program has played a key role in financing risk and managing claims related to these situations. The captive has handled workers' compensation claims related to stress and injuries among teachers responding to incidents involving students. It has also processed reimbursement claims from employees whose personal property was damaged.
The district currently carries a $5 million self-insured retention for general liability and auto liability funded through the captive. In advance of its July 1 renewal, the district plans to increase its excess liability limits by $30 million to $50 million.
The expanded tower will provide additional capacity across multiple lines, including auto liability and sexual abuse and molestation coverage.
“The captive program has been crucial in providing resources to handle challenging situations, such as ICE raids and other disruptions,” Ms. Hollingsworth said.
Business Continuity and Operational Planning
Business continuity planning remains a key focus for organizations responding to disruptions tied to enforcement activity and related protests.
The Los Angeles Unified School District has implemented a virtual learning academy that allows students to attend classes online if in-person attendance becomes difficult. In some communities, fear of immigration enforcement activity has contributed to reduced attendance among students and staff.
The district has also implemented a mental health hotline available 24/7 for students, families, and educators.
Ms. Hollingsworth said business continuity planning allows organizations to maintain operations during difficult circumstances.
“Whether it’s a natural disaster or ICE raids, a business continuity plan can help you continue operations in light of very difficult circumstances,” she said.
Workforce Compliance and Preparedness
Legal experts say organizations should also review employment compliance procedures and operational readiness.
Alan Rothenbuecher, a partner at Benesch, Friedlander, Coplan & Aronoff in Cleveland, said enforcement actions can disrupt operations, increase overhead costs, and affect employee morale and confidence.
Employers should confirm that all workers have completed I-9 forms verifying citizenship and immigration status. Workforce audits can also help identify unauthorized workers and reduce the risk of financial penalties.
Operational preparation is another consideration. Mr. Rothenbuecher recommended clearly marking private areas with signage and designating a trained liaison to interact with immigration officers in the event of enforcement actions.
“If your parking lot is private, put a sign there that says nobody unauthorized is allowed to access this area,” he said.
Organizations may also benefit from educating employees about response procedures during enforcement activity. Mr. Rothenbuecher said employees should understand the types of warrants immigration officers may use and be aware of their rights during raids, including the right to remain silent and the right to an attorney.
