Marine insurers warned to be alert to modern slavery

MARINE insurers need to widen their understanding of modern slavery and forced labour across the maritime and extended global supply chains, an industry group says.

A new information paper from the International Union of Marine Insurance (IUMI) highlights the growing reputational and legal risks facing insurers that underwrite operations linked to exploitative labour practices.

While insurers are unlikely to be directly involved in operational abuse, they may be indirectly and unwittingly enabling unethical practices if they fail to do their due diligence.

“Modern slavery is impacting an estimated 28 million people”, said IUMI secretary general Lars Lange.

“Marine insurers must be aware of the potential consequences of insuring unethical clients and consider integrating ethical underwriting practices to support responsible business.”

The paper reports that modern slavery—including forced labour, human trafficking, and exploitative recruitment—affects several industries that have links with marine insurance, from shipping to textiles, agriculture and manufacturing.

According to IUMI, sectors such as distant-water fishing, garment production and the maritime industry/seafaring are identified as particularly high-risk.

Key recommendations for marine insurers include:

• Conducting robust due diligence during underwriting processes.
• Implementing clear ESG policies that address human rights.
• Collaborating with all stakeholders to improve transparency in maritime supply chains.

According to IUMI, recent cases, including lawsuits against major seafood and agriculture companies, underscore the growing legal exposure for businesses complicit in forced labour.

Laws relevant to insurers include the EU Corporate Sustainability Due Diligence Directive and the UK Modern Slavery Act.

According to IUMI, ongoing maritime issues included seafarer abandonment and denial of shore leave as documented by the IMO.

"Insurers are one step removed from these operations and it is important to acknowledge that they often face practical limitations in detecting these abuses given their indirect role and the complexity of global supply chains”, Mr Lange said.

“However, as far as possible, marine insurers should take a proactive stance - not just to protect reputations, but also to align the insurance industry with global human rights standards.”

IUMI has encouraged marine insurers to engage in “industry-wide discussions” and strengthen measures aimed at preventing modern slavery complicity.

The paper can be viewed here.