Marine Insurers Urged to Strengthen Due Diligence on Modern Slavery Risks

The International Union of Marine Insurance (IUMI) has called on marine insurers to broaden their understanding of modern slavery and forced labour across maritime and extended global supply chains. 

In an Information Paper published on 19th August, IUMI highlighted rising reputational and legal risks for insurers underwriting operations linked to exploitative labour practices.

“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 noted that forced labour, human trafficking and exploitative recruitment occur in industries tied to marine insurance, from distant-water fishing and seafaring to garment production, agriculture, and manufacturing. These sectors present particularly high risk of labour abuses within supply chains.

Independent agencies such as Bureau Veritas, VeriFuel, VPS and FOBAS have documented cases in maritime hubs where poor working conditions and human rights violations persist. Distant-water fishing vessels and offshore support services are hotspots for seafarer abandonment and denied shore leave.

Recent lawsuits against major seafood and agricultural exporters support the growing legal exposure for businesses complicit in forced labour. Insurers backing such firms could face litigation and regulatory penalties as courts hold supply-chain financiers accountable.

Legislative frameworks including the EU Corporate Sustainability Due Diligence Directive and the UK Modern Slavery Act are increasingly making companies and their insurers liable for abuses in overseas operations.

“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”, said Lars Lange. “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 recommended marine underwriters conduct due diligence during policy placement, implement clear ESG policies addressing human rights risks, and collaborate with clients, regulators and NGOs to improve supply-chain transparency. By doing so, insurers can mitigate legal and reputational threats while supporting ethical maritime trade.

Marine insurance advice

Shearwater Law’s marine insurance practice is trusted to advise upon all aspects of marine insurance. Cases we have been involved with include: 

• Advising on interpretation and application of P&I and other marine insurance policies. 
• Interaction between various marine insurance policies (including top-up cover, such as: loss of hire and kidnap and ransom). 
• Risk reviews at contracting stage, considering insurances and relevant commercial factors.

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