Hiscox’s Carslake: Martyn’s Law expected to drive uptick in extensions for cover around terrorism
In anticipation of the Terrorism Protection of Premises Bill – known more widely as Martyn's Law – coming into force in the coming months, insurers should expect more extensions for cover around terrorism, and will need to think carefully about wordings, aggregate limits and exposures, according to Rob Carslake, head of events at Hiscox.
In a recent interview on The Insurer TV’s News in Focus programme, Carslake spoke of the impact Martyn’s Law will have on the events insurance market.
Spearheaded by Figen Murray – who lost her son Martyn Hett in the Manchester Arena attacks of 2017– the law will, if passed, impose new duties on operators of publicly accessible premises to address the evolving issues of terrorist threats.
Though Carslake expects more terrorism-specific extensions to pre-existing policies, primary carriers would need to be cautious about taking on additional terrorism exposures.
“We don't want to be taking on big line sizes as primaries,” he said.
“There will need to be a bit more of an excess of loss market coming through. Those are the types of conversations we need to get ourselves ready for as an industry, because the risk is there, and we will need to respond to what customers need,” he said.
The new legislation will be applicable to various locations where a 'qualifying activity' takes place, including those which take place at entertainment venues, visitor attractions, retail outlets, places of worship, and health and education institutions.
A two-tier system will determine the proportionate security steps expected to be taken to implement Martyn’s Law. The standard tier will apply to locations with a capacity between 100 and 799, while the enhanced tier will apply to locations with a capacity of 800 or more.
On policy wordings, Carslake stipulated that the definition of terrorism would likely “not change”.
However, those event areas stipulated in the Bill which are not thought to fall within traditional terrorism coverage, may have to add terrorism-specific clauses to their event policies due to liability issues that Martyn’s Law could introduce.
“We need to consider exactly how we bring in the operative cover around it,” Carslake explained.
“It will also not just have an impact on what I look after in the public liability world, for example, but also in the D&O markets where, they'll have to consider exactly what coverage they're giving towards the directors, who could be on the hook if they don't put in place this control,” he added.
Carslake could not say for certain if Martyn’s Law would increase premiums for event organisers, seeing it as a policy-by-policy issue.
“It depends on the exact policy you're buying or were buying. Some policies out there may have no exclusions, and some may have it,” he explained.
But he did foresee a possibility that if additional cover for event organisers were needed, premiums would increase.
On the subject of whether small venues could deal with buying additional terrorism coverage, which may stem from the introduction of Martyn’s Law, Carslake argued that policies that cover acts of terrorism will always be “viable”.
“Like most insurance, it comes down to what you require, what's been assessed in terms of what you need in your insurance programme, and when you need to purchase it. It will always be viable if it's understood and the insured or the customer wants to protect that risk, in my opinion, but what we've got to do as an industry is demonstrate the value that sits behind it.
“We should be leaning into those risks that customers need to get protected, and be prepared to offer something to those customers that want something protected. That's what we're here for,” he said.
Hiscox’s head of events is “optimistic” about the industry’s ability to react to the new regulatory aspects of Martyn’s Law, while recognising some of the pressures the events space has experienced in the past few years, citing Covid-19, energy shortages and strikes.
“Martyn’s Law could be seen as putting further requirements on an industry that's been through a lot of stress,” he said.
“But I'm quite buoyant about that. The event industry has consistently shown over the past three or four years that it bounces back, it's adaptable, and it's creative. And I do believe that, regardless of bringing in something like Martyn's Law, it will adapt to it and it will come out stronger and bigger,” he concluded.
Watch the 12-minute interview with Hiscox’s Rob Carslake to hear more about how Martyn’s Law will affect the event's insurance policies, and to get his thoughts on how Covid and climate uncertainty have affected the space.