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Pandemic highlights key areas of risk

The impact of the COVID-19 pandemic and a rise in ransomware cyber-crime have helped create an extremely challenging time for businesses and W Denis  insurance experts have noted the current worldwide situation and pinpointed emerging risks of concern. These include:

 Cyber attacks

The pandemic has seen more workers operating remotely using a digital infrastructure that may be vulnerable to hacking at a time when cyber gangs also targeting major organisations and forcing governments to act in an attempt to strengthen key systems. Cyber insurance is now being seen as a necessity rather than a luxury due to the rise of cyber-attacks

 Mental Health

Independent figures confirm mental health and wellbeing has worsened during the COVID-19 pandemic. As a result, there has been a significant increase in demand for services that can support employees in the workplace with a shift in insurance claims from somatic to mental illness. The challenge for many businesses is how to integrate a wellbeing strategy into Employee Benefits and Private Medical Insurance cover.

 Climate

Current trends suggest that future Director and Officers (D&O) claims are likely to be increasingly driven by environmental, social and governance (ESG) factors. With established energy sectors including coal, gas and oil under constant pressure, the new technologies are increasingly taking centre stage led by solar, wind, carbon capture and storage and green hydrogen. With stricter controls, businesses are witnessing increased environmental liabilities due to higher compliance and clean-up costs leading to costly liability claims. 

 Legal & Regulatory

The increased availability of litigation funding in the UK and changes to insolvency laws would make it easier for investors to pursue claims against Directors and Officers for breaches of corporate reporting duties. Current regulatory trends have prompted companies to re-examine the effectiveness of their governance and oversight. High profile failures have serious implications for D&O liability insurance.

Political risk

Increasing geopolitical risks and crises makes Political Risk Insurance (PRI) a key factor in managing business exposure. Without the presence of PRI, businesses may be reluctant to take advantage of developing markets. Experts have identified exchange transfer as the most common political risk-related loss with political violence and import/export embargoes also high on the list. Trade risks can be insured as part of a package covering commercial payment risks, or on a standalone basis, depending on the way trade is being conducted.

 Infrastructure

The pandemic has added to an already growing awareness of business interruption exposures triggered by non-physical damage, such as cyber, blackouts, political risk, or disruption caused by third-party suppliers. Covid-19 has impacted on global production and supply chains putting increased strain on national economies. Physical loss of or damage to goods during transit, imports, exports and domestic carriage, including any incidental storage has made Cargo insurance vital to mitigate risk.

W Denis has multi-class specialist brokers which can work with businesses across their entire risk portfolio to transfer balance sheet exposures to insurers efficiently and competitively. W Denis works with a wide range of specialist underwriters and is at the forefront of procuring insurance capacity for emerging risks.

W Denis are one of the UK's leading insurance brokers, who specialise in all aspects of insurance. To discuss this further with an expert at W Denis, please make arrangements with daniel.moss@wdenis.co.uk and on 0044 (0)113 2439812

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