BACK TO TOP

Lloyd's of London marketplace & coal insurance - FAQs

Making the confusing world of insurance a little clearer

What is the Lloyd’s of London?

Firstly, it’s nothing at all to do with Lloyd’s PLC, the bank – they’re not great either, but that’s another story.

Lloyd’s of London is a large insurance corporation with an HQ in London but trade insurance globally. In its own words, Lloyd’s of London “oversees and supports the Lloyd’s market, ensuring it operates efficiently and retains its reputation as the market of choice for specialist insurance and reinsurance risk.” You can watch Lloyd’s of London’s very corporate video explaining what they do.

What is “Lloyd’s marketplace”?

Insurance companies use Lloyd’s of London’s marketplace much like sellers use eBay’s website. Just as eBay supports bidding between buyers and sellers, so does Lloyd’s of London, employing over 200 brokers to match insurance customers with insurance companies. And just like eBay, Lloyd’s of London offers some form of guarantee for insurance bought via their marketplace, encouraging trades through to be made through it.

What is Lloyd’s of London's connection to Adani and West Cumbria coal mines, and fossil fuels

Lloyd’s of London marketplace is in the top 4 for insuring climate-wrecking fossil fuel projects around the world. Lloyd’s of London’s marketplace is particularly attractive to large fossil fuel projects as Lloyd’s has a reputation for getting high-risk projects insured that other insurance companies won’t touch. One way it does this is by splitting an insurance policy, and spreading the risk, between insurance companies using their marketplace. This amounts to an insurance for climate chaos as it’s only with insurance that companies can take the financial risks to dig new coal mines, build new tar sand pipelines, and explore new gas and oil fields.

Lloyd’s of London has refused to rule out allowing Adani’s Carmichael coal mine in Australia or the West Cumbria coal mine in the UK to obtain insurance via their marketplace. If Adani’s Carmichael coal mine gets insurance and goes ahead, it would open up one of the world’s biggest coal deposits contributing to a climate catastrophe.

What is Lloyd’s of London doing to prevent their contribution to climate change?

Not much, and definitely not enough.

Lloyd’s of London have only committed to a policy of greenwash that is incompatible with our climate crisis, continuing to insure risky projects that no one else will touch. So far Lloyd’s of London has committed to asking insurers operating in their marketplace to stop insuring tar sands, thermal coal mines, and Arctic exploration, phasing this out by 2022. But ‘reinsurance’ for these worst offenders is allowed up until 2030.

This also leaves a huge range of climate-wrecking projects free to continue insuring their risk via Lloyd’s of London marketplace with no policy at all to discourage it. In practice, this means the planned West Cumbria mine could be insured via Lloyd’s of London marketplace as it intends to mine ‘coking coal’, not ‘thermal coal’, although both are eventually burned, producing similar emissions.

What more could Lloyd’s of London marketplace do to prevent their contribution to climate change?

Lloyd’s of London could most simply ban all fossil fuel insurance trading via their marketplace. Their own statement clearly indicates this would be possible; “Lloyd’s publishes minimum standards and monitors compliance with those minimum standards. Lloyd’s by-laws also set out a number of rules with which market participants are required to comply”.

Fossil fuel projects only amount to around 5% of Lloyd’s of London’s marketplace insurance trades, so the company would still have a future without selling out ours.

What would be the impact if Lloyd’s of London ruled out fossil fuel insurance?

Some of the fossil fuel projects would source insurance from other providers and marketplaces, but many using Lloyd’s of London marketplace have failed to secure insurance elsewhere—Lloyd’s of London is sometimes their last chance. Let’s not give it to them.

Insurance providers also look to one another in setting their policies, so if Lloyd’s of London drops fossil fuel insurance, it is likely other insurance traders and providers will too—with a bit of encouragement.

Insurance might not be the sexiest subject, but it is a very vulnerable link in the chain needed to start and continue these huge climate-wrecking projects. It’s time Lloyd’s of London take responsibility for the role its insurance marketplace has in our collective future.

What is an insurance policy?

A contract that a company or individual takes out with an insurer to protect them against specific risks in ways that are agreed and noted in the contract.

What is ‘claims made’ insurance?

Type of insurance policy that will cover insurance claims made whilst the insurance policy is in force – even if the event leading to that insurance claim happened before that insurance policy came into force.

What is ‘claims occurring’ insurance?

Type of insurance policy that will cover insurance claims for events that occurred whilst the insurance policy is in force – even if the claim for it happens after the insurance policy stopped being in force.

No related insurance:

They don't insure coal mines e.g. they just cover travel insurance.

What is ‘run-off’ insurance:

AKA: Not 'live' insurance. Type of insurance policy that comes into effect when a company stops trading. So, any claims made under it will relate to events that happened before the company stopped trading and the policy started. This is used by companies that had ‘claims made’ insurance, and want insurance in case anyone takes action against them after the company for the period of time after they stopped trading but are still liable.

Want to know more?

Share now:

Subscribe
Notify of
guest

0 Comments
Inline Feedbacks
View all comments

Never miss an update! Sign up to our Newsletter

OTHER STORIES

Ffos-y-fran opencast coal mine quietly becomes a massive reservoir

Coal Action Network’s drone footage on Monday 11th March raised the alarm bell about the rising water levels. With this footage, a local resident informed Merthyr Tydfil County Borough Council of the rising water levels, only to be told…

Global Week of Action: Putting Insurance Industry in the Hot Seat

The insurance industry found itself in the spotlight last week as a Global Week of Action blossomed across the world. From February 27th to March 3rd 2024, a wave of protests, both online and in the streets, swept through the doors of insurance giants, demanding accountability over their support for polluters and decisive action on climate change.

Protesters walk with banner reading 'Insure Our Futures Not Polluters'

Success: Yet another major insurer rules out coal and oil projects

After a week of peaceful protest around the world, alongside hundreds of groups, our efforts have paid off. Yet another leading insurance company, Probitas, has ruled out insuring the proposed West Cumbria coal mine and the East African Crude Oil Pipeline (EACOP).

Bedwas coal tip: a new frontier for coal in South Wales?

‘Energy Recovery Investments Ltd’ is proprosing to extract the coal from 3 large coal tips in Bedwas, Caerphilly, South Wales. The company claims that it would use some of the sales of the coal to restore those coal tips later. The coal tips lie above a coal seam, which the company claims it would coincidentally have to dig into to create ‘lagoons’ for processing the coal from the coal tips…

Charges dropped for activists blocking Ffos-y-fran coal mine

The Crown Prosecution Service has dropped all charges against the four Extinction Rebellion (XR) activists who blockaded the entrance to the UK’s largest open-cast coal mine, last summer with a pink boat. While removing the immediate burden of legal confrontation for the defendants, the decision has left a “crater of unfinished business” in the fight for climate justice and accountability for local residents…

Coal clings on in Aberpergwm appeal

Citing different grounds to the High Court, the Court of Appeal has nevertheless found against our appeal. The Court of Appeal judges disagreed with the judge in the High Court, and decided that current statute limits Welsh Ministers to only deciding whether a new conditional licence may be issued…

Aberpergwm coal mine extension debated in court

Today, 6th February 2024, Coal Action Network was back in court, this time appealing last year’s decision by the court that the Welsh Government couldn’t prevent an extension at Aberpergwm coal mine.

✌🏿Victory!✌🏼 Leading Global Insurers Rule Out East African Crude Oil Pipeline

After months of campaigning, five more major insurance companies have announced they will not support the East African Crude Oil Pipeline (EACOP)!

EMR Capital’s other coking coal mine – Kestrel, Queensland

EMR Capital, the company that owns 81% of the proposed West Cumbria Coal mine is currently operating another coking coal mine – Kestrel.

CONNECT WITH US

Share now:

0
Would love your thoughts, please comment.x
()
x