Bolton told Airmic News that costs could be driven up by insurers to price in risk should lawsuits emerge over events venues judged to be non-compliant with the new legislation’s terrorism risk mitigation guidelines.
“There’s a minimum expectation around safety,” Bolton said. “If there’s another terrorist attack in the UK at a publicly-accessible location, after the law is put in place, it will be easier to identify whether the owner-operator has done all that’s reasonable and practical to minimise the chance of the attack happening, and to respond appropriately in the event it does happen.”
When the opposite is the case, casualty insurers fear being on the hook for new liability risk.
“If the preparation or response is suboptimal and doesn’t meet this minimum expectation around security delivery, it’s going to be easier to identify whether the owner-operator was negligible and whether they are subsequently liable.”
Bolton suggested it would take some time for the law to be embedded to the point of the regulator demanding compliance, until which time, insurers’ apprehension will impact the casualty market. He estimated “two or three” renewals as the likely time period during which insurers would “second-guess” the regulator.
“The casualty teams here at Aon have been speaking about how it could lead to premium increases or more restricted terms and conditions within the programme,” Bolton said. “We can’t presuppose what the market appetite is going to be, but it’s going to be looking at the risk and having to price it into the programme.”
Bolton said present opacity around the new legislation remained one of the biggest challenges facing the sector.
“The challenge at the moment is that the information put out into the public has been limited,” he said. “We don’t know yet all the details around the requirements for security, or what is considered reasonable or practical depending on a venue’s capacity.”