3 minute read
Heightened focus on employee and cyber risk management
Mark Laudrum Head of Commercial & Retail Broking - BrokersOnline APSCo Affiliate Partner
With his firm BrokersOnline joining APSCo this year, Mark Laudrum provides an update on the recruitment insurance market, as well as a look at some of the key risks insurers will be focusing on in the near future.
Insurance for recruitment agencies has and likely never will be an off the shelf tick and flick purchase nor delivered online with only a handful of mouse clicks.
Your industry is certainly viewed as requiring a specialised product, and rightly so with the various forms of employment as well as client engagement models applied across the industry.
With just a small number of insurers actively targeting your industry for professional indemnity, competition is thin on the ground with each insurer having their own preferred risk appetite based on occupations or industry sectors. This doesn’t however mean that there aren’t deals to be done with many insurers still keen to win new business and grow their recruitment portfolio.
The other key insurance policies for every recruiter would be cyber and management liability (includes directors and officers). There is a larger insurer pool for these policies as they are less recruitment industry-specific although many insurers are nervous about large on-hired workforces.
Market premium movement expectations 2021-2022
Cyber, possible increase 1525+% and with increased security practices required
This is where you can expect to see the greatest changes year on year, not just with the premiums being charged but more particularly with the cybersecurity you will be required to have in place to even obtain a policy.
Insurers will be expecting you to have endpoint protection in place for all remote devices (malware protection) as well as multi-factor authentication for key IT platforms.
Without these in place insurance cover could be restricted or not available at all through some providers.
This is not purely an insurance issue, it is predominantly a business continuity risk and one to be kept high on the agenda.
Cybercrime is advancing at a phenomenal pace and every business will need to respond and adapt very quickly as new threats are encountered.
Some statistics to alert/scare you are as follows:
Professional indemnity, possible increase 10-15%
This class of insurance, in general and not specific to recruitment, has seen dramatic change over the past two plus years with Australian underwriting agencies being heavily impacted by Lloyd’s of London capacity restrictions as well as their increased premium requirements.
Local insurers have suffered sizable claims from a series of unrelated industries (financial planning, construction and engineering) which has led to premium increases across the board, regardless of industry sector.
Management liability/directors and officers, possible increase 15-20% (SME), 25-100+% (larger corporate and especially listed firms)
The increase in shareholder class actions against major Australian companies over the past few years has particularly affected this class of insurance and is combined with many years of low or inadequate premiums being charged for SME businesses.
Insurers are now being more selective and diving deeper into a recruitment agency’s historic employee retention /redundancy trends as well as their split of employees between internal and on-hire, leading some to limit cover to internal employment-related claims only.
Meet Mark Laudrum
With a recruitment insurance broking career beginning in Melbourne in September 2004 and advising agencies and industry bodies over the years since, Mark has worked with hundreds of agencies across a wide range of disciplines and sectors.
To learn more about how BrokersOnline can help to review and remarket your existing insurance program, get in touch with Mark Laudrum, 0499 011 472, mark@brokersonline.co or the Brokers Online website.
