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Brokers and insurers in the London market have come together to develop a new clause that aims to keep modern slavery out of trade supply chains.

Aon, Fidelis and Marsh have developed the clause which makes it a condition of marine cargo policies to have the insured comply with applicable legal and regulatory obligations, relating to the cargo insured, in respect of forced and child labour.

A spokesperson on behalf of Fidelis tells GTR that the intention is for Fidelis to apply the clause to all new and renewal business while Aon and Marsh have “committed to a programme to educate their brokers and clients on the operation of the clause, and to seek acceptance from clients on a best efforts basis”.

They add that the group are working with other insurers and trade associations in the London market to secure wider acceptance, with work on the clause having taken more than two years to finalise.

However, they do not comment on how the insurers will prove the insured are compliant.

“Forced labour in all its forms is an extreme expression of inequality and injustice,” says Charles Mathias, group executive director and group chief risk officer at Fidelis. “The insurance industry is committed to do all it can to prevent association with the abhorrent practices of modern slavery. We sometimes think that slavery is a thing of the past, but it is not – it is real and present in all societies and we want to do our part to root it out.”

The new clause comes amid the insurance industry apologising for its role in the trans-Atlantic slave trade, which saw insurers provide cover for property and ships carrying slaves from West Africa to the Americas between the 17th and 19th centuries.

Industry giants including Lloyd’s of London, Aviva, AXA and RSA Group have all been linked to the slavery business by a database created by University College London (UCL). Lloyd’s, Aviva and RSA expressed regret over their roles; AXA did not respond when contacted by GTR.

The focus on removing modern slavery and issuing statements for past involvement in the slavery business follows the police killing of African-American man George Floyd in May in the US and the growing global Black Lives Matter movement. The movement has put pressure on corporate institutions to address the role they play in systematic racism as well as be more transparent about their involvement in slavery and colonialism in black history.

However, the insurance industry has been slow to increase the diversity of its workforce. While 76% of insurance firms in the UK have a diversity and inclusion strategy in place, only 13% of employees were British, Asian and Minority Ethnic (BAME), down from 15% the previous year, according to the 2019 talent and diversity survey by the Association of British Insurers (ABI), which collects data from more than 100,000 insurance employees.