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By Randy Sadler, CIC Services, and Rick Shaw, Awareity
What if the warning signs were there all along, but no one connected the dots?
That question looms large in the aftermath of a workplace shooting, a high-profile harassment lawsuit, or a preventable suicide. These incidents devastate families, disrupt organizations and invite regulatory scrutiny and public backlash. But in many cases, hindsight reveals that the signs were there: scattered across departments, isolated in silos and ultimately overlooked.
For organizations serious about mitigating risk, prevention and financial protection cannot be treated as separate priorities. They are interdependent. Risk prevention demands infrastructure and cultural commitment. But even the best-prepared organizations need financial strategies in place when prevention isn’t enough. That’s why a growing number of businesses are turning to a combination of behavioral threat assessment tools and captive insurance solutions to close the gap between prevention and protection.
The High Cost of Ignoring Early Warnings
The 2022 shooting at a Walmart in Chesapeake, Virginia, wasn’t without warning. Six employees were killed by a team leader who, according to multiple reports, had displayed troubling behavior for years. Employees had submitted complaints. HR had received warnings. A “kill list” had even been discovered. Yet, no pre-incident preventative action was taken because they lacked a coordinated community-wide framework to collect and share the warning signs with the right resources to take pre-incident prevention actions. In the aftermath, Walmart faced not only immense public criticism and shaken employee morale, but a slate of lawsuits from victims’ families.
This case isn’t an outlier. According to the Occupational Safety and Health Administration (OSHA), workplace violence costs the U.S., employers and individuals $171 billion annually. A single incident can expose companies to expensive litigation, reputation damage and long-term employee turnover. According to a recent Gallup survey, nearly 23% of U.S. employees reported witnessing unethical behavior at work in the past year. Those who observed such behavior were 2.3 times more likely to experience burnout, and also more likely to be “watching for or actively seeking” a new job than their peers.
And while large-scale tragedies grab headlines, many incidents with severe financial fallout are far less visible. Harassment claims, internal fraud, suicide, mental health emergencies and whistleblower complaints all have one thing in common: the warning signs often existed, but the organization lacked the framework to act on them in time.
The Fragmentation Problem
One of the biggest barriers to effective prevention is organizational fragmentation. In most companies, concerning information is scattered. HR might note a behavioral red flag. Compliance might log a complaint. Security might record a suspicious incident. But these data points are rarely centralized. Without a central trusted framework, the concerning behaviors sit in isolated silos, making it nearly impossible for existing resources to identify patterns or escalating risks.
In post-incident investigations, this fragmented reality is a recurring theme. Time and again, someone “knew something,” but that knowledge never reached the right person or decision-maker. Information remains locked in inboxes, spreadsheets or underused reporting systems. And the larger the organization, the harder it becomes to synthesize risk indicators in a meaningful way.
This issue is not limited to violence. A serial harasser can be reassigned instead of investigated. A suicidal employee might speak up, but the report goes unnoticed. A facilities concern might be flagged repeatedly before it becomes a workers’ compensation claim. When concerns aren’t collected, shared, assessed and tracked, businesses lose their opportunity to proactively intervene.
Centralizing Prevention with the Butterfly Method
Preventing workplace incidents often hinges on recognizing and responding to subtle warning signs before they escalate. Yet many organizations face challenges because information about concerning behaviors is dispersed across departments such as HR, security, legal and compliance, as well as across community silos such as law enforcement, mental health, community members and social media, making it difficult to identify patterns or escalations with at-risk individuals.
Awareity, a company specializing in pre-incident prevention, developed the Butterfly Effect Method: a research-based framework illustrating how small, early signals can trigger a cascade of events if left unaddressed. The method emphasizes the importance of connecting seemingly isolated reports to form a clearer, collective understanding of risk.
This approach underlines why centralized, community-wide, pre-incident prevention platforms are critical. By enabling confidential reporting, integrating data from department and community frameworks and applying analytic tools, organizations can better detect emerging risks and intervene proactively. Such frameworks help break down silos, turning fragmented information into actionable insight.
Platforms based on these principles have been used in various settings to identify mental health crises, workplace misconduct, and potential violence earlier, supporting more timely interventions. The Butterfly Effect Method’s focus on the ripple effect of small actions reflects a broader shift in risk management from reactive to preventive strategies.
Where Prevention Ends and Financing Begins
But prevention is only part of the equation. Even in organizations with robust behavioral threat assessment systems, risk can never be entirely eliminated. That’s where risk financing plays a vital role, complementing prevention efforts. While traditional insurance provides important protections, some complex or emerging risks can benefit from more tailored financial solutions.
Many commercial carriers exclude or severely restrict coverage for the types of claims that follow workplace crises: sexual misconduct, workplace violence, mental health-related liability or reputational fallout. Even if coverage exists, premiums may be exorbitant, deductibles unmanageable or exclusions so broad that meaningful financial protection is impossible.
Captive insurance companies provide an alternative. A captive is a licensed insurance entity owned by the business it insures. This model gives organizations the ability to custom-design coverage for the specific risks they face—including those that are excluded or insufficiently covered by commercial carriers.
For example, a business might use its captive to fund:
- Claims related to sexual harassment or misconduct
- Crisis response costs, including public relations and legal counsel
- Support for mental health or suicide prevention programs
- Coverage for active shooter events or workplace violence
- Training and prevention program infrastructure
Captives also offer flexibility to invest in long-term risk mitigation, and they provide stop-loss protection for when a crisis does occur. Perhaps most importantly, they create a financial feedback loop: when risks are prevented or reduced, the organization keeps more of its capital within the captive, which incentivizes continuous improvement.
Risk Management as a Strategic Imperative
In many companies, risk management is still viewed as a compliance function. But in today’s volatile environment, it must be treated as a strategic pillar. Prevention and protection must work in tandem: without prevention, you’re managing risk reactively. Without protection, you’re gambling with your financial future.
The good news is that the tools and frameworks to manage both sides of the equation now exist. Awareity’s platform enables organizations to identify and act on early warnings. Captive insurance provides the financial mechanism to manage what prevention can’t catch. Together, they create a comprehensive, cost-effective risk management model.
Organizations that take this approach are already seeing results. In addition to school districts and public institutions, large employers in high-risk sectors like retail, healthcare and hospitality are adopting a centralized, pre-incident prevention framework and designing captives to fill gaps in coverage. As a result, they’re reducing incident frequency, improving response times and lowering the total cost of risk.
A Safer, Smarter Future
Ultimately, prevention is not a buzzword. It’s a commitment. It means building a culture where employees feel empowered to speak up. It means giving decision-makers the tools to recognize patterns before they spiral. And it means putting financial structures in place that support, rather than hinder, proactive risk management.
The Walmart tragedy was not just a failure of policy. It was a failure of structure, communication and culture. For every organization, the lesson is clear: You can’t afford to ignore early warning signs. And you can’t rely on generic coverage to clean up the aftermath.
By investing in both prevention and protection, businesses can reduce human suffering, safeguard their reputations, and position themselves for long-term resilience in a world where the stakes have never been higher.
About the Author
Randy Sadler started his career in risk management as an officer in the U.S. Army, where he was responsible for the training and safety of hundreds of soldiers and over 150 wheeled and tracked vehicles. He graduated from the U.S. Military Academy at West Point with a Bachelor of Science degree in International and Strategic History with a focus on U.S. – Chinese Relations in the 20th century. He has been a Principal with CIC Services, LLC for 8 years and consults directly with business owners, CEOs, and CFOs in the formation of captive insurance programs for their respective businesses. CIC Services, LLC manages over 100 captives.
About Awareity
Founded by Rick Shaw, a recognized expert in threat assessment and prevention, Awareity is on a mission to make the world safer by helping organizations connect the dots and act early to prevent incidents. Building on Shaw’s extensive research and experience, Awareity provides a unique prevention platform combined with consulting and education to empower communities and businesses to detect risks before they escalate. Rooted in lessons from Columbine and 9/11 and validated by national safety agencies, Awareity’s approach turns knowledge into action, giving good people the advantage over bad actors. Their commitment to customized solutions and dedicated human support makes them a trusted partner in creating safer environments while protecting reputations and bottom lines.
Also read: As Product Recalls Hit Record Numbers, Captive Insurance Emerges as a Strategic Risk Management Tool
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