ICoCA Webinar on 23 March 2021
‘Reducing human rights risk in your private security supply chain’
Presentation on HELP by Andrew Pickthorn
Thank you for your kind introduction Jamie and thank you for the opportunity to participate in this important webinar on reducing human rights risk. May I acknowledge the excellent work being undertaken by ICOCA under your leadership, by encouraging widespread adoption of international security standards and increasing the number of companies achieving ICoCA membership and certification. When considering risk underwriters take full account of whether a client has accredited certification for appropriate standards, whether they are members of ICoCA, and if they have ICoCA certification, this is viewed as the gold standard.
In the context of human rights and international humanitarian law the roles of accredited certification for international security standards and the work of ICOCA are readily understood. So, you might ask why an insurance broker is on today’s panel. The reason is to explain the important role that insurance can play to underpin due diligence, compliance, and risk mitigation to ensure liabilities are met for clients, employees and third parties who may be caught up and impacted by security operations.
Many of you will view insurance as an expensive but necessary requirement and annual renewal is met with a groan and ‘what is the minimum amount of coverage I can get away with at the cheapest price’. I suggest that this is a mistaken approach. By having the right insurance policies in place, with robust and comprehensive coverages, you will demonstrate your commitment to your ‘duty of care’ to your staff, to those in your supply chain and critically to people affected by your business activity.
This is a complex business. Companies and entities operating in hostile environments face a myriad of jurisdictional, contractual, legal and compliance issues with challenging risk profiles all of which need to be properly addressed by your insurance policies. Despite this complexity, you need to engage in the process because this is not just a matter for your broker and underwriters. It is important that anyone operating in hostile environments understands their insurance arrangements in order to provide assurance to their own staff and to the supply chain that they are meeting their duty of care liabilities. In other words, I would urge you to become discerning customers, to stress test responses and scenarios and keep asking ‘what if?’ Does your policy include War & Terrorism? Acts of Political Violence? Use of autos? Failure to protect? What about local sub-contractors?
My colleague Simon Koe and I are now very much veterans in the field of insurance solutions for clients operating in challenging environments. We know what works and have witnessed how things can go catastrophically wrong. I was involved in the early years in Iraq following the military intervention in 2003. They were challenging times for private security risk companies as they sought to operate in a compliant manner in a hostile environment where the rule of law was fragile and ignored by many; remember the CPA. Against this backdrop we insurance brokers sought solutions for our clients. Vividly we recall the events of 16 September 2007 in Nisour Square in Bagdad when armed employees from Blackwater killed 17 Iraqi civilians – a tragedy that underscored the human rights risk of these operations. In the years that followed we observed the legal arguments, the court proceedings and insurance claims in a process that was instructive and a game changer for both the security sector and insurance providers. The consequences of Nisour Square, the earlier horrific and public deaths of four Blackwater contractors in Fallujah, the claims resulting from the unlawful export of weapons, all led us to shape insurance products that encourage compliance, the raising of standards and respect for human rights.
Since those early days in Iraq there has of course been a transformation in terms of regulation, standards and expectations for the sector and companies have a clear pathway to achieve international recognition that they are compliant, operate to the highest standards and respect human rights. That pathway is to achieve accredited certification, become a certified member of ICoCA and have robust and comprehensive insurance in place. When providing insurance our role is to encourage and advise on risk mitigation, to provide policies that meet liabilities and efficiently address and settle legitimate claims. With this approach we provide assurance to both the policy holder and their clients.
After many years of ad hoc placements, to pull everything together in 2015 we launched Hostile Environment Liability Protection, or HELP. HELP is an insurance and risk management programme designed to provide broad cover for complex operations in hostile environments. HELP is underwritten at Lloyd’s by syndicates which have been writing specialist security related operations for many years and have considerable expertise and experience insuring all manner of risks in hostile environments across the globe. While maintaining our Private Security and Risk Management Company base, other HELP clients include construction and extraction industries, Intelligence providers, logistics firms, training companies, NGOs and charities. At the core of the programme are Professional Indemnity, General Liability and Employer’s Liability but also Personal Accident and K&R insurance
Determined at the outset that the programme should assist in raising standards for the sector, we took the decision that all HELP products should be available via any Lloyd’s broker. There is no attempt at exclusivity. So, any Lloyd’s broker can access HELP products and companies can simply request their existing brokers to investigate HELP insurance.
Potential clients complete an application form which captures all the information that you would expect, such as revenue, wage roll, activities and experience but also asks about compliance with human rights legislation and principles, such as the UN Global Compact, UN Guiding Principles on Business and Human Rights, Voluntary Principles on Security and Human Rights, and the Modern Slavery Act.
HELP is more than insurance; critically it also enables policy holders to access a range of risk mitigation services, 24/7 crisis guidance support and to benefit from strategic observations and insights. Risk mitigation is about understanding the threats and risks to an organization and implementing strategies to manage those risks. We have assembled a panel of SMEs known as HELP Associates to assist policy holders to understand and mitigate risks. Act as prudent uninsured. Because risk mitigation equals risk improvement, insurers contribute towards the fees of the HELP Associates.
As an acknowledged risk mitigant, policy holders may request a contribution from the Insurer towards the costs of certification. Clearly, underwriters prefer companies that are compliant, respect human rights and international humanitarian law and have accredited certification for appropriate international security standards. As part of the underwriting process, they look to see whether a company has been certified to PSC.1 or ISO 18788 and if they have not yet reached the required standard, we will advise them what measures they need to put in place to obtain certification. The overall aim is to provide comprehensive insurance against their liabilities, whilst encouraging risk mitigation and best practices for the benefit of them, their clients and of course their insurers.
As you are aware, there are currently three UKAS accredited certification bodies. HELP policy holders have the opportunity to procure their services with a contribution to the fees paid by the Insurer. We appreciate that the certification cycle runs for three years. From insurers’ perspective this is an excellent approach because it means that certification is not simply a snapshot, but a continual assessment of conformity. The offer from the HELP Insurer for a contribution to the cost of certification is made on an annual basis. In other words, a HELP policy holder (provided premiums are in date) is eligible each year for a contribution to the costs of certification (including initial certification, surveillance audits and recertification).
The same recognition applies to the three Certification Bodies accredited under the International Accreditation Forum Multilateral Recognition Forum (IAF MLA) by the United Kingdom Accreditation Service.
I should add that the HELP team is fully supportive of the ICoCA’s board's decision to explore additional pathways to certification.
Underwriters take full account of ICoCA membership and differentiate between an affiliate, a transitional and a certified member. As mentioned, ICoCA certification is recognised by insurers as the gold standard for provision of responsible security. Insurers will consider a contribution to the cost of ICoCA membership for HELP policy holders.
Another really useful benefit to HELP policy holders is crisis guidance to support them in response to a range of scenarios including human rights issues, threat to their operations, reputation, and revenue. In the event of a crisis HELP policy holders have access to a dedicated 24-hour emergency response and crisis management as part of the services available from the insurer. This service is provided by the international law firm, HFW
In responding to incidents, the HFW team provides real time guidance and legal assistance, in person, remotely or through HFW's network of trusted global contacts. Typically, HFW's role involves project managing the response, providing practical guidance and solutions, limiting exposure to civil and criminal liabilities (both corporate and personal), gathering and preserving evidence, protection of legal privilege and interaction with insurers.
To sum up:
- HELP is available to all Lloyd’s brokers and is designed to provide broad robust insurance to meet the liabilities of operations in hostile environments.
- HELP supports the outstanding work being conducted by the ICoCA and encourages membership. Insurers differentiate between affiliate, transitional and certified members. ICoCA certification is recognised as the gold standard for the provision of responsible security. Insurers may contribute towards the cost of the ICoCA membership or towards the cost of accredited certification.
- Appropriate and comprehensive insurance can play a key role in raising standards for the private risk and security sector underpinning adoption of standards and support for the work of Certification Bodies and the International Code of Conduct Association.
If you need more on HELP please have a look at the website www.hostileinsurance.com or speak to your broker.