Bellrock continues to observe a sustained ‘softening’ of the Management Liability market with substantial insurer capacity and appetite leading to premium rating reductions (between 10 to 25 per cent) and coverage enhancements being readily available. Where strong risk management practices, governance maturity and financial strength can be demonstrated, businesses are best positioned to obtain both coverage enhancements and rate relief.
Given the nature of Management Liability, in that policies are typically a suite of ‘package’ covers, caveats remain. This is on the proviso that sector specific risk trends continue to influence premium ratings and coverage availability for certain insuring clauses. Notably, policyholders operating in sectors with exposure to increased insolvency rates, employment related claims and regulatory scrutiny, are less likely to benefit from favourable market conditions.
In light of this Bellrock has identified the following risk trends driving insurer behaviour.
Cyber claims
Cyber security is increasingly recognised as a board-level governance risk rather than a purely operational function. This has materialised recently in actions led by two separate regulatory bodies, being ASIC vs FIIG Securities and the Office of the Australian Information Commissioner initiated investigation into Vinomofo Pty Ltd.
These incidents have given rise to both claims against directors and officers and the company for strict liability offences which are typically covered under the Statutory Liability element of a Management Liability policy.
Considering this, insurers are now seeking to impose exclusions for claims arising from, or in connection with, cyber breaches. This is a pertinent development for policyholders to be cognisant of, as standalone Cyber Liability policies will generally only respond to provide cover in respect of defence costs and any resulting fines/penalties imposed during a regulatory enquiry. These policies will not provide cover where officeholders are named personally, or for allegations of misleading conduct.
Regulator activity
Increasing regulatory activity within the building/construction, labour-hire, heavy machinery/vehicle and agriculture sectors, has seen Statutory Liability rates begin to stabilise. A major development being the Work Health and Safety Amendment (Standalone Regulator) Act,2 on 1 July 2025 which formally established WorkSafe NSW as an independent regulator and has seen the largest and most proactive enforcement period in the previous decade, with more than 500 compliance notices issued.3 Insurers are seeking to heavily sub-limit defence costs limits in respect of WH&S investigations, and we urge policyholders to review their policies to ensure that WorkSafe notices constitute a ‘Claim’ and will trigger indemnity in the event a notice is issued. Many policies have strict definitions, which may frustrate a claim.
Further, the NSW Government’s $145M investment in the Building Commission NSW (announced 22 June 2025) has allowed the Commissioner to set up joint task forces with the Australian Securities and Investments Commission, the Australian Skills Quality Authority and the NSW State Coroner.4 When viewed in conjunction with the proposed Strata Legislation overhaul, there is substantial pressure on the construction and building sectors to improve risk management and operational safety practices.
This is driving policyholders to require their insurers to provide affirmative cover for costs to comply with enforceable undertakings ordered following an investigation. As the majority of insurance policies remain ‘silent’ as to cover, this will be a key topic for the next six months.
Statutory Liability cover will continue to be underwritten selectively as a result of the ever-changing regulatory landscape. As such, ensuring your Statutory Liability cover is appropriate is more important than ever.
Insolvency cover
Positively, we continue to see insurers offer insolvency cover and/or remove restrictive insolvency exclusions under their Management Liability policies. Cover is being offered to those who can provide strong financial statements, demonstrating a current liquidity ratio of above 1.5 (as a general rule of thumb). Industries which have seen long-term increases in insolvency premium rates include those operating in property development and principal construction which are being underwritten on a case-by-case basis.
Employment practices claims frequency
As noted in our July market update, there continues to be a marked uptick in employment dispute claims, which followed the Respect@Work amendments, right to disconnect laws and psychosocial/mental health in the workplace reforms. Following this, we have observed insurers seeking to increase Employment Practices Liability deductibles for businesses with heightened exposure to claims, including hospitality groups, law firms and health/emergency services.
In addition, following an unfortunate increase in employee misconduct within the childcare and early education sector, which received considerable media scrutiny, the availability of cover under Third-Party Employment Practices Liability is limited with claims arising from or in connection with alleged molestation being excluded entirely across the market. See our article here for further details.
Increased appetite for Social Engineering Fraud and Crime
Previous market sentiment as to the limiting of Social Engineering Fraud cover has now eroded. Crime cover is readily available to businesses who can demonstrate strong payment processing protocols. Sub-limits are regularly obtained between $150,000 to $250,000. Where Crime policies are negotiated on a standalone basis, substantially higher limits are available. We do however urge caution, as there are insurers who are offering Social Engineering Fraud cover which imposes strict compliance with onerous policy conditions in order to trigger the policy in the event of a claim.
Online transacting
We continue to review policies which have been transacted via online portals. Although these policies are often procured cheaply, they are more often than not unfit for purpose. This is typically through the imposition of broad exclusions and incorrect/inaccurate disclosures. Our advice in these circumstances continues to be that in the unfortunate event of a claim there is a significant risk of declinature or reduced settlement.
In order to ensure that your Management Liability policy is appropriate, competitively priced and provides adequate coverage, please contact a Bellrock Advisor.
1 [2025] AICmr 175 (17 October 2025)
2 2025 (NSW)
3 SafeWork NSW Media Release 26 July 2025
4 Minister for Building NSW Media Release 22 June 2025
Continue reading our full range of market updates:
- Insurance Market Overview: January 2026
- Claims
- Workers Compensation
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
