Gary Chambers, Technical Director at PIB Insurance Brokers – Exclusively Appointed Insurance Broker to members of BIoR, shares his predictions on the two main risks to your recruitment business.
With the start of 2018 already in sight, what’s in store for the world of recruitment? Gary Chambers, Technical Director for PIB Insurance Brokers, shares his two main predictions around insurance risk faced by the recruitment sector.
Harassment and Bullying at Work
Unless you have been living in a cave with no Wi-Fi for the past 2 months, you will have seen daily news items surrounding sexual harassment allegations against individuals in positions of power within the film and media industries and in government.
These events have raised awareness and given courage to individuals to speak out against the alleged perpetrators. I expect all businesses within the UK will be looking very closely at their processes and procedures to ensure that they are doing everything they can to provide their staff with a safe working environment free from harassment or fear of harassment of any kind.
I read an article by eFinancialCareers on the 8th November 2017 entitled “Sexual harassment is horrific in the financial recruitment industry.” It is worth having a read, but sadly I know that the situations described will not surprise you and this type of behaviour is not limited to one particular business sector.
As I write this mid-way through November, I think of the workplace Christmas parties on the horizon and the number of situations that could occur because of either opportunity or inebriation. Don’t forget, if a business organises an event for its staff they will be responsible for their wellbeing at the event and in some cases, anything that happens directly after the event ends.
It is an unfortunate truth that you will never be able to entirely eradicate the possibility of harassment or bullying occurring in your business, but you can review your policies and ensure you are doing everything you can to deal with the situations correctly, with suitable preventative measures in place.
From an insurance perspective, if you haven’t already put in place Management Liability insurance which extends to include employment practice liability, then it is worth investigating.
Management Liability package insurance products provide protection for the directors and officers within a business should they face allegations of a negligent act. Say for example you were aware of rumours that a member of your management team was harassing or bullying a member of staff. Failure to act correctly in line with your company procedures could give rise to negligence claims against you.
With employment practice liability cover (typically an extension to a Management Liability policy), this will protect the business should questions be raised about the way a business has acted to protect a victim of harassment or bullying.
Cyber Crime and the GDPR
Big changes are due in May 2018 when the GDPR (General Data Protection Regulation) arrives. Any business that retains personal data or uses personal data to market their services will be focused on making sure they are ready for the GDPR.
During 2017 there have been many news items concerning cyber-attacks and loss of personal data, probably the biggest concerned Equifax. The exact cost of the Equifax data breach will probably never be completely understood due to the quantity and type of data stolen.
You may also be aware that the ICO (Information Commissioner’s Office) put forward recommendations that individual company directors should be held personally liable for breaches in the data protection law by their companies.
So, when you add the new data regulations, increasing cyber-crime and the consistent focus on making individual directors accountable for their businesses activities, any person running a business holding personal data will be ensuring they have the correct controls in place and should the worst happen, the right insurance in place to protect the business as well as their own personal assets.
Cyber Liability insurance can help protect your business if your systems are breached by hackers, not only in terms of repairing your systems and loss of data but also for ransom demands and public relations management.
As mentioned previously, Management Liability insurance protects the individual directors and officers of a business in case they are found personally negligent. In respect of the GDPR you could face personal fines if you are found to be at fault for poor control over the personal data that your business possesses.
Take into consideration the Uber case highlighted in the news on 22nd November 2017. According to reports hackers stole the personal data of 57 million customer and drivers. Uber decided to pay the hackers $100,000 to delete the stolen information and failed to report the matter to the regulators.
This type of situation could lead to large fines from the Information Commissioner’s Office which could filter down to individual directors that failed to notify the breach or failed to provide adequate security against cyber-attacks.
A combination of a quality Cyber Liability insurance policy and Management Liability (Directors and Officers cover) will become even more important to every business next year.
If you would like any more information on the insurance covered this article, contact Gary Chambers at email@example.com.
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