Understanding Human Trafficking and Its Impact on Vulnerable Industries

What Is Human Trafficking?

Human trafficking can be defined as using force, fraud, or coercion to exploit people for labor, services, or commercial sex acts. Victims are often lured with false promises and then controlled through threats, abuse, debt bondage, or restriction of movement.  Trafficking can affect anyone, regardless of age, gender, or background, but traffickers frequently target vulnerable populations such as individuals facing poverty, adolescents and children, and migrants and refugees.

Businesses Most Susceptible to Human Trafficking

Certain industries are particularly vulnerable to human trafficking, especially those with low-wage, low-skill labor, complex supply chains, or limited oversight. Sectors most at risk include:

• Hospitality: Hotels and motels are common sites for both sex and labor trafficking, sometimes due to negligent oversight.

• Agriculture: Farms often employ seasonal or migrant labor, making workers susceptible to forced labor or debt bondage.

• Manufacturing: Factories, especially in global supply chains, can exploit workers through forced labor or debt bondage.

• Restaurants: Due to high demand for low-wage workers, restaurants are vulnerable to labor trafficking.

  
  

Insurance and Human Trafficking

General liability insurance policies are not designed to cover human trafficking claims. Courts have increasingly ruled that insurance companies do not have to defend or indemnify businesses against allegations of enabling or being complicit in human trafficking, especially sex trafficking, on public policy grounds. Policies generally exclude intentional or criminal acts.

However, complex coverage questions can arise when lawsuits allege negligence (e.g., a hotel failing to prevent trafficking on its premises). Even when coverage doesn’t apply, the cost to defend an allegation of human trafficking can be significant. For that reason, insurance companies are introducing endorsements specifically excluding coverage for any claim arising out of the allegation of human trafficking so that there is no ambiguity as to whether coverage will apply.