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Risk managers under pressure to keep up with evolving terrorism

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The recent string of terrorist attacks across the globe is forcing security professionals to react and adjust to new types of threats in a continuing battle to mitigate risk.

Twenty-two people were killed and more than 100 injured in an explosion outside the U.K.’s Manchester Arena May 22 as they were exiting an Ariana Grande concert. On June 3, attackers used a van and long knives to attack people on London Bridge, killing eight and injuring nearly 50 others. These and other attacks are prompting changes in the way employee and public safety are approached.

Employers must now exercise greater care in ensuring employees’ safety, experts say.

“Certainly, since the Paris attacks in 2015 in Europe and then in the U.S. since the San Bernardino attacks shortly after that, what those attacks have done is really change the calculus that companies must take when it comes to duty of care,” said Bill Udell, Los Angeles-based senior partner for security and political risk consultant Control Risks Group Holdings Ltd.’s business protection and resilience services across the Americas.

Duty of care refers to a person or employer’s responsibility to be reasonably careful when dealing with others.

“The duty of care requires companies to be proactive and preventative in preparing their travelers before they go and a travel risk management program is how companies comply with their duty of care,” said Matthew Bradley, Philadelphia-based regional security director, Americas, for both International SOS, a London-based travel advisory and security firm, and Control Risks, which jointly run a travel security services business.

Employers should be educating their employees before they travel, Mr. Bradley said.

“Companies are looking for quality training on how to respond following a terrorist attack,” he said. “In most cases, this means e-learning, since it is the most efficient way to reach their traveling population.” Employers also need to track their traveling employees, Mr. Bradley said.

“Traditional traveler tracking feeds itineraries into a database, but in a crisis, companies need to know exactly where travelers are,” he said. “A mobile check-in through an app allows companies to see the exact location of their travelers in relation to the incident.” The recent string of attacks makes ensuring employees safety harder, observers say.

“What these attacks have done — spreading out the target set to places that were previously benign — is really throw into question what is reasonably foreseeable,” Mr. Udell said. “So, if you are charged with putting programs around reasonably foreseeable risks, you had a much better chance of saying what was ‘reasonably foreseeable’ in mid-2015 than you do now.” Risk managers must be aware of the heightened bar, both for personnel and public safety reasons, experts say. “Risk managers’ ultimate responsibility is to the safety of the personnel in their company as well as to the general public using their facilities,” said Wendy Peters, executive vice president of financial solutions-terrorism and political violence for Willis Towers Watson P.L.C. in New York.

She pointed out that a shift in tactics requires a security response.

“The threat is escalating now that ISIS’ main goal is to kill as many people as possible, as opposed to striking symbolic targets,” Ms. Peters said. “This scenario requires a much closer evaluation of security protocols in place.” Apart from the primary responsibility to protect the public at large, “the potential for serious litigation in the face of an attack looms large,” she said.

Policyholders are moving more to protect themselves against such liabilities, experts say.

“Third-party terrorism liability coverage is not new, but something we are seeing more clients look toward,” Tarique Nageer, terrorism placement advisory and property practice leader for Marsh USA Inc. in New York.

Businesses not affected directly by an incident such as a blast are also increasingly seeking coverages for indirect damages such as loss of business after a terrorist incident.

“We’ve seen some changes in the types of coverages clients are more inclined to look at now,” Mr. Nageer said. “Loss of attraction cover and cancellation of booking cover are more visible now than they were a couple of years ago.”

Even though many businesses already were taking prudent steps concerning security and safety, more may be needed.

“We work with many mass-gathering locations, and they are all very tuned into this, whether it be concert venues, malls, ballparks,” said Harry Rhulen, Denver-based president of crisis-management firm KeyStone Solutions Inc.

“They all know that this is an exposure and were already on this, not just as a reaction to Westminster,” he said, referring to the March incident in London in which four people were killed. “But I think this has certainly heightened the understanding of what failure looks like. I think there will be an easing of purse strings” to fund added security.