Pool Re held a webinar in July to provide an overview of new government legislation requiring venues to consider terrorism threats and implement risk mitigation measures to prepare for and respond to the risk of terrorism.
Speaking in the webinar, the Protect Duty bill comes in response to “shifting threats”, emphasised Kevin McNulty, Security and Counter Terrorism, Home Office. McNulty said there was also a need to legislate risk mitigation guidance “because, without legislation, we know that many organisations won’t take forward security considerations”.
In December 2022, the government announced that the new legislation would introduce a tiered model for venues depending on capacity and the activity taking place, to prevent unnecessary burden to business.
“Ministers are very conscious of proportionality,” he said, adding: “We’re not looking for the next stage requirement to apply to all public places and our test. The proportionality is based on those premises and events, and the capacity of those premises.”
He added that the aim was not to legislate for open spaces, which he said would have different security considerations, and were the domain of police and local authorities.
However, Calum Ronald, senior risk consultant, Pool Re, noted the risk posed by “marauding attacks” for open sites. “Organisations need to consider the consequences of these beyond the direct sites,” he said.
For so-called enhanced tier venues with capacities in excess of 800 people, Ronald revealed that UK standards body, the BSI, “in partnership with Pool Re, is looking at introducing a new standard”.
Ronald said that, for now, organisations should focus on taking “preparative steps”, including understanding where they fit into the new legislation, in qualifying capacity terms.
“We’re not asking people to be terrorism experts, but to show awareness that something could happen,” Ronald said.
He underlined that venues were not expected to prevent attacks. “Plans should instead focus on the aim to minimise the impact of attack,” he said. For standard tier venues, this should focus on “low or no cost measures”, he emphasised.
“Organisations should understand the threat and take preparedness steps, with the aim to improve their resilience to terrorism attack,” he added.
Insurance market perspective
Jonathan Gray, Pool Re’s chief underwriting officer, said that from the insurance sector’s perspective, the industry should be scenario planning what the legislation means, for example, reassessing its accumulation assumptions about how big a loss could ultimately be.
“Insurers will want to review their existing products for suitability, to ask whether they are capturing everything that the new legislation is placing on policyholders,” Gray said.
“The other aspect is rating: are they charging the right price for the product at that moment in time,” he said.
Brokers, on the other hand, face a different challenge focused on awareness and client awareness, he emphasised.
“The insurance thought process and the terrorism insurance thought process within that tend to be very short,” Gray said.
This increases the importance of ensuring that information in the public domain is accurate and up to date, he stressed. However, organisations need to be forthcoming in seeking information from brokers.
“Don’t be afraid to ask questions. Brokers should be prepared to answer any questions that businesses might have,” he added.
Gray acknowledged that the new legislation will change buying and selling behaviours.
“We’ll be keeping a close eye on market behaviours and the availability of cover,” he said.
McNulty acknowledged that the casualty insurance market would be affected by the legislation – a class of business beyond the reinsurance remit of Pool Re.
“There’s no intention for Pool Re to get into the liability insurance space, but I know there is market uncertainty there, and that casualty underwriters are asking how are they going to respond to this,” he added.