Recent custody breaches in London, including escapes during hospital treatment, have brought an often-overlooked exposure into sharper focus for the insurance market. Once the manhunt begins, attention shifts to something more technical: where does liability sit when control breaks down?
Jonathan Edwards (pictured), head of insurance & risk at HCR Law, believes the market should be paying closer attention.
“The recent spate of custody escapes in London has put a spotlight on a risk that some in the insurance market may not think about every day but probably should,” he said. “When a prisoner walks out of a hospital or slips away during transport, the fallout can be significant. And for public bodies, insurers, brokers and risk managers, the question quickly becomes: who pays?”
Most custody breaches do not involve dramatic prison breaks. They occur in transitional spaces – hospitals, court holding areas, transport vehicles – where operational responsibility can shift between prison services, police and outsourced escort contractors.
Hospital settings are particularly exposed. Security is lighter, the public is nearby, and escort duties are frequently handled by third-party providers rather than prison staff. If an escapee reoffends or causes harm, the consequences can escalate quickly.
The complexity lies in how the custody system is structured. Police forces and His Majesty’s Prison and Probation Service typically retain risk through government-backed indemnity arrangements rather than commercial insurance. Private contractors, by contrast, are required to carry substantial public liability and professional indemnity cover under outsourced contracts.
That distinction matters. “In most cases, contractors must indemnify the authority if something goes wrong due to their own negligence, for example failing to follow proper escort procedures,” Edwards said.
Post-incident disputes, however, rarely resolve neatly. Questions arise over whether procedures were followed, whether the prisoner’s risk profile was accurately communicated and where operational control sat at the point of failure. These fact-sensitive issues can take considerable time to unwind, and insurers may ultimately fund that process.
For casualty underwriters, custody risk presents an uncomfortable profile: infrequent, but potentially catastrophic.
“Severity is high. If an escaped prisoner commits a serious offence, the resulting claims can be substantial: personal injury, psychological harm, even fatalities. These are not minor exposures,” Edwards said.
Even a small number of high-profile incidents can shift market appetite. Underwriters are taking a closer look at operational controls before offering terms, drilling into how contractors manage training, supervision and compliance.
Where governance frameworks are weak, the impact can be immediate – higher premiums, restrictive wording or substantial excesses. Even well-run operators may find renewals less routine if scrutiny across the class intensifies.
That sharper underwriting lens places greater responsibility on brokers to present operational risk clearly and convincingly.
“Insurers want to see evidence of training records, staffing levels, incident logs and compliance with Home Office standards,” Edwards said. “A well prepared submission will be the difference between competitive terms and no terms being offered.”
There is also a contractual reality check. Some contractors assume public authorities will ultimately absorb loss, but indemnity clauses can operate more narrowly than expected, particularly if negligence is established or policy exclusions apply.
Meanwhile, public bodies retaining risk face their own challenge. Self-insurance reserves must reflect the true cost of severe claims at a time when fiscal pressures are acute.
Custody exposure, Edwards argues, does not sit neatly with one party.
“Ultimately, custody risk is a shared problem. Public authorities, contractors and insurers all have a stake in the outcome,” he said. “Getting the risk allocation right and making sure insurance arrangements actually match operational reality is the key to managing this evolving exposure effectively.”
Custody risk is not new. What recent events have done is strip away any assumption that it is straightforward. For casualty markets, it is a reminder that some of the most complex exposures are embedded in routine operations, and only become visible when something goes wrong.
