January 2023 Market Update – Management Liability

Management Liability continues to be offered to enterprises with up to $250M in turnover by some insurers and is exposed to factors affecting the SME market. Logically smaller organisations with less developed corporate governance and policies and procedures are seeing higher premiums and excesses. Capacity for organisations in construction and development remains narrow. Statutory Liability continues to be impacted by occupational hazard and worksite incidents.

Whether or not a company will have access to the suite of covers will depend on company size, industry, business maturity and any exit strategy. Companies in the tech space being frequently exposed to litigation continue to be viewed as higher risk.

Social engineering fraud continues to be a growing trend. Higher sublimits can only be obtained where insureds can demonstrate strict crime risk protocols and policies have been put in place.

Claims activity continues in the Employment Practices and Statutory Liability sections. Statutory Liability continues to be impacted by enquiries by regulators following occupational hazard and worksite incidents. Employment Practices claims for unfair dismissal, workplace harassment and discrimination remain prevalent. Procuring insolvency cover remains difficult however where healthy financial information (externally audited) can be provided in support, cover can be obtained.

The Directors’ and Officers’ insurance market has become sustainable for insurers since the impact of COVID-19 on most businesses has subsided. This is reflected in smaller premium increases and is welcome news following peak in rates last financial year. Furthermore, new competition within the market combined with a trend for businesses to spend less on coverage has caused insurers to re-market and compete in order to grow their market share, which is favourable for businesses.