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THE WORLD IS ‘LIVING IN AN
ERA OF UNPRECEDENTED LEVEL
OF CRISES AND TROUBLES,’ UN
SECRETARY-GENERAL BAN KI-
MOON TOLD DELEGATES TO THE
UN GENERAL ASSEMBLY MEETING
DURING HIS WELCOMING ADDRESS
IN SEPTEMBER. WHAT DOES THIS
MEAN FOR ORGANISATIONS
DOING BUSINESS ON THE
GROUND IN TROUBLED
JURISDICTIONS?
GC
TAKES A
LOOK AT THE INTERSECTION OF
RISK AND THE LEGAL FUNCTION,
FROM THE PERSPECTIVES OF
A GENERAL COUNSEL AND AN
INSURANCE UNDERWRITER. BY
CATHERINE RODGERS
RULES OF
ENGAGEMENT
E
ven defining a ‘conflict zone’ is problematic,
says Jason Herriott, insurance underwriter
at Amlin. He’s chairman of the London
Market Association’s Terrorism and Political
Violence panel, and sat on its Joint War
Committee for a decade. ‘The question is: what
do we mean by the term? Because if we’re
looking at a terrorism conflict zone then we’re
talking about countries perhaps with indigenous
problems, for example Colombia with the FARC.
That’s a very different conflict to what you’d be
looking at in Ukraine.’ Companies face the risk
that the situation can shift and destabilise around
them, sometimes rapidly and unexpectedly. Keith
Ruddock, general counsel of The Weir Group, has
seen this first hand – Weir has operations in Iraq -
although in the more stable south of the country
- and in Libya, prior to evacuating its staff from
there earlier this year. So for some businesses,
operating in a conflict zone might not be a
choice, but an unforeseen problem that needs to
be solved.
Insurers view unstable situations in terms of
perils, or the likely causes of loss, and develop
insurance products to meet them. Political
violence policies can cover everything from
strikes, riots, civil commotion and sabotage,
through to terrorism, insurrection, rebellion,
revolution, mutiny, coup, civil war and war. It’s
a comprehensive list. But in reality, identifying
these perils in legal terms can be tricky because
sometimes it’s difficult to pinpoint exactly
when terrorism ends and war begins – a line
that even world leaders sometimes blur. ‘We’ve
seen time and time again when an event occurs
and a spokesman of the government will speak
without thinking about the legal ramifications.
For example George Bush said after 9/11: “This
is an act of war.” The legal implications of
saying that are enormous - a lot of contract law
goes into default because of force majeure,’
explains Jason. And equally, when a government
categorises a group of people as ‘terrorists’, and
BIG
PICTURE