CYBER RISK ASSOCIATED WITH PROPERTY PROFESSIONALS
Not a day goes by without cyber security being in the press in one way shape or form. Cyber and Cyber Crime claims are now making up more than 50% of all claims in the insurance market and property professionals are by no means immune, yet the complacency around cyber liability insurance remains staggeringly high.
Cyber Liability is an area where firms feel they are unlikely to suffer an attack, and therefore choose to bear the consequences themselves should an incident arise. They believe their systems are rock solid or they are too small or of little interest to cyber criminals to justify the expense.
No business is 100% protected against cyber-crime. Cyber criminals are now more sophisticated than ever before and inclined to go after smaller more vulnerable businesses which they see as low hanging fruit compared with more complex larger companies who may have better security systems in place and take more time to penetrate.
Professional Risk Associated with Property Professionals
Mint Insurance Brokers Ltd operate in the London and Lloyd’s market specialising in servicing the insurance needs of property professionals. The following paper provides an insight to the professional risks associated with UK property professionals and how the current UK professional indemnity insurance (PI) market is responding.
The last few years have seen some of the most challenging trading conditions for UK property professionals. With continued uncertainty and turbulent times ahead, we discuss the ever-evolving risks faced by property professionals and how to best anticipate and mitigate risk going forward.
INCREASED CLAIMS FREQUENCY
We know from previous experience that during an economic downturn claims frequency increases. With the introduction of new legislation and looming regulation of property agents (RoPA) the consumer will enjoy added protection and therefore more rights to pursue property professionals.
Charlie Bending, partner at DAC Beachcroft LLP, who specialises in defending claims against property professionals and their insurers acknowledged saying that, “In addition to lender claims against valuers, particularly by short term lenders, we do anticipate claims by aggrieved landlords against property managers increasing over the next 6-24 months; these are likely to flow from rental default caused by anything from a failure by the property manager to take steps on behalf of the landlord to address maintenance issues to (more likely) tenants being unable to pay rent / refusing to pay rent due to their adverse financial situation.
Having protection from eviction (residential) or protection from forfeiture (business) due to the Coronavirus Act 2020 will only increase landlords’ losses, potentially leading to claims that the property manager failed to vet tenants appropriately. Once the protection ends, property managers will also need to have the capacity to act swiftly in order to kick-start the process; taking care to adhere to time limits and prescribed steps to avoid making a potential bad situation worse.”
Professional risk associated with property professionals
Feedback from our client base over the last twelve months suggests property professionals have faced some of the most challenging trading conditions and are likely to experience continued uncertainty and turbulent times over the next twelve months.