Category: insights

What ‘rejection’ means for employers under The Employment Rights Bill

MPs in the House of Commons decisively rejected most of the amendments proposed by the House of Lords to the Employment Rights Bill. In doing so, they reaffirmed the Government’s intention to preserve the core protections originally proposed – rather than dilute them.

This landmark parliamentary moment matters considerably for employers.

The rejection is more than a procedural victory for Government; it gives clearer shape to the legislative direction and offers a signal to organisations to act now.

Preserving ‘day-one’ unfair dismissal protections

Perhaps the most consequential amendment the Lords sought was to insert a six-month qualifying period before unfair dismissal rights could be claimed – essentially rolling back the proposed “day-one” protection.

MPs refused that move. This is a signal that the Government intends to make unfair dismissal rights effective from the start of employment (subject to limited carve-outs) as originally promised.

For employers, that means dismissal risk increases earlier in the employment relationship. The days when ‘outsourcing risk’ to probationary periods with impunity are effectively over.

Robust procedures, immediate documentation and fair processes will be more critical than ever from day one.

Firming up worker protections

Other amendments struck down include proposals to narrow the new obligations around zero- or low-hours contracts and to weaken whistleblower protections or the right to accompany at disciplinary hearings. The rejection also cements in principle the extension of rules voiding NDAs in harassment and discrimination cases.

This suggests Parliament is pushing for relatively strong protections – not just minimal tweaks.

Reduced uncertainty

By rejecting numerous Lords’ changes, MPs reduce some of the legislative ambiguity. Employers can now plan more confidently around the bill’s core contours, rather than contending with extreme swings in possible outcomes.

The Commons’ action sends a strong political signal: the Government is standing by its manifesto agenda for worker rights, and it is unwilling to make radical compromises.

This further cements the commitment to embedding a ‘pro-worker’ framework.

Key implications for employers

The rejection of amendments does not just reconfirm intent – it changes how employers should prepare.

1. Reassess probationary periods and dismissal policies

With day-one unfair dismissal protections likely to remain, employers must revisit the role and limits of probationary periods. Rather than relying on them as a safe ‘trial’ period, organisations will need to build in stronger procedural safeguards (notice, documentation, opportunities to address performance) from the outset. Dismissal decisions will be more exposed to challenge – even early on.

2. Audit contracts, zero-hours arrangements and request rights

Any workforce with zero- or low-hours contracts will be under closer scrutiny. The employer obligation to offer a guaranteed hours contract may not be ‘on request only’ so employers should assess whether their current contract templates and policies comply with potential new standards. The risks of under-structuring casual, agency or variable-hour work will increase.

3. Strengthen grievance, disciplinary, whistleblowing and NDA policies

Given that protections around accompaniment, whistleblowing and NDA restrictions are likely to be more robust, employers must revisit those policies now. Guidance, training and clarity will be needed to avoid inadvertent breaches. Employers should build ‘right to speak out’ cultures that safely accommodate internal reporting and ensure their NDA structures do not contravene the new prohibitions.

4. Prepare for more tribunals and litigation risk

Stronger rights for employees increase the risk of employment challenges. Employers should expect more claims, and should prepare for and forecast the financial, procedural and reputational impact.

Pre-emptive investment in documentation, early resolution strategies, mediation and insurance or alternative dispute resolution procedures will be essential.

5. Manage change, culture and risk

With many of the details yet to be fleshed out in secondary legislation, employers must manage the transition carefully. Planning for change, flexible adaptation and internal communications will be key. Organisations that adopt an employee-centred culture may convert legal compliance into a competitive advantage in talent attraction, retention and reputation.

6. The growing importance of legal expenses insurance

With dismissal rights extending from day one and stronger worker protections across contracts, NDAs and whistleblowing, the likelihood of disputes progressing to tribunal is set to rise.

Even well-intentioned employers may find themselves defending claims that are time-consuming and costly. Legal expenses insurance will therefore become an increasingly valuable safeguard, helping businesses cover the costs of defending employment claims and giving them access to expert legal advice from the outset.

For many organisations, particularly SMEs with limited in-house HR or legal resources, such protection could prove critical in navigating this new risk landscape.

A turning point for employers

The Commons’ rejection of the Lords’ amendments marks a pivotal turning point in the unfolding landscape of UK employment law.

It signals that the legislative wind is blowing toward tougher protections, not retrenchment. For employers, the window for reactive adjustment is narrowing – those that wait until the last moment will risk being overwhelmed and exposed.

Yet the challenge also presents opportunity.

Organisations that seize this moment to embed procedural rigour, fairness from day one and a culture of respectful transparency will be better placed not just to comply – but to thrive in a world of heightened worker expectations and tighter employment legislation.

Small and medium-sized enterprises (SMEs) are the backbone of the UK economy. 5.5 million businesses account for 99.8% of the business population, three-fifths of employment and around half of turnover in the UK private sector.[1]

They may be small, but they are mighty!

But their size and agility can often mask vulnerabilities. SMEs must navigate a myriad of ever-evolving legal and regulatory challenges – often without the support of in-house HR, compliance or legal teams.

But legal and liability risks when left unchecked can expose SMEs to financial and reputational damage that few can afford. The challenge is not simply recognising these risks but ensuring that the insurance protection in place is robust enough to respond when claims arise.

Risk and recovery

Unfortunately, underinsurance is a recurring theme in the SME space. It is estimated that as many as 80% of UK SMEs are underinsured with some properties insured for just 63% to 68% of their actual rebuild value.[2]

When the condition of average clause is tiggered, this results in proportionately reduced claim payouts – from which many would be unable to recover from the financial impact of such a significant uninsured loss.

A growing proportion of small businesses do not have any insurance at all while those that do often fail to review their cover needs when their circumstances change.

No employers’ liability is a growing liability

Another concern is that although employers’ liability is compulsory in the UK, research from the British Insurance Brokers Association (BIBA) found that 26% of SMEs stopped buying EL and 22% stopped buying professional indemnity insurance in 2023[3].

But every business that employs one person or more must legally take out at least £5 million of EL cover from an authorised insurer.

But some small businesses wrongly believe that if they work from home or no customers visit their premises that they do not need any form of liability insurance.

Businesses who do not have employers’ liability in place can be fined up to £2,500 by the Health and Safety Executive (HSE) for every day they do not have appropriate insurance. They can also be fined £1,000 if they fail to display an EL certificate or refuse to share it with inspectors when requested.

Underinsurance exposed

Underinsurance can easily slip under the radar – until a major loss or claim. But the persistence of underinsurance among SMEs is rarely down to wilful neglect.

More often, it stems from a combination of factors: policies purchased on cost rather than suitability, a lack of understanding of indemnity limits and exclusions – and policy limits that have not kept pace with business growth and operational change or even seasonal fluctuations.

Specialist businesses need specialist insurance

Another emerging trend is that some micro businesses are purchasing commercial cover with the same mindset as personal insurance. They are buying based on price – not policy cover and purchasing online rather than via a trusted and specialist broker that understands the nuances of their business risk.

 Inflation has only compounded the problem further, with rising legal fees and compensation awards quickly eroding policy limits that once appeared sufficient.

Liability risk review

For SMEs, liability exposures are wide-ranging. Claims can arise from accidents on business premises, defective products, professional negligence, data breaches or employment disputes. Increasingly, directors are also under scrutiny, with regulatory investigations and wrongful act allegations placing personal liability firmly in the spotlight.

Each of these scenarios brings with it the potential for legal action, substantial defence costs, and compensation awards. For smaller businesses, the financial impact can be disproportionate.

Yet despite this, many SMEs remain underinsured, either because they do not fully appreciate the scope of their liability or because they are unaware or reluctant to increase premiums in the face of other financial pressures.

Where SMEs are most exposed

Employment practices remain a significant source of claims, with tribunals for discrimination, harassment and unfair dismissal showing no signs of slowing. Health and safety breaches, meanwhile, can result not only in compensation claims but also in heavy fines and irreparable reputational harm.

Customer-facing risks are just as pressing. A simple slip or fall on business premises can escalate into costly litigation. Businesses selling products face additional exposures if those products prove faulty, while service providers risk negligence claims where errors or omissions cause client losses.

The growing digital landscape adds another layer of complexity. Cyberattacks and data breaches have become a routine hazard, and with GDPR requirements still firmly in force, the penalties for mishandling data can be severe.

Finally, contractual obligations can create hidden exposures. SMEs often sign agreements that transfer liabilities onto them without realising that their insurance does not extend to cover these responsibilities. This contractual risk is particularly problematic in supply chain-dependent sectors, where liability can cascade down to the smallest players.

The consequences of falling short

For SMEs, the consequences of underinsurance are rarely confined to financial loss. The reputational damage associated with a claim – particularly one that becomes public can deter customers, unsettle suppliers, and weaken investor confidence.

Operationally, defending a claim can divert management focus and disrupt normal business activities. For directors and officers, the personal stakes are even higher, with individual assets at risk if claims fall outside company cover.

These consequences underline the vital role insurer, MGAs and broker partnerships play in identifying risks early and ensuring clients are not left exposed.

Avoiding the underinsurance gap

Annual reviews should not be seen as a box-ticking exercise but as an opportunity to reassess cover in line with growth, diversification, regulatory change and economic realities such as inflation.

Equally important is clarity around policy wordings. Many SMEs assume they are covered for risks that in reality fall outside the scope of their policy.

By working through exclusions, clauses, sub-limits and indemnity periods with clients, insurers can ensure expectations are aligned with reality – and highlight areas where additional protection is required.

Prevention is better than cure

Positioning insurance as a critical element of business resilience can help SMEs view cover as an investment rather than a grudge expense.

In a climate where legal risks are both diverse and growing, the reassurance of robust liability and legal expenses protection is invaluable.

With the right insurance partner, underinsurance can be turned from a persistent threat into a preventable risk.

That’s why our liability policies include a health and safety review – and why we don’t provide standard one-size fits all cover. Because no two businesses are alike. And neither are the sector risks they face.

What’s good for the goose is not always good for the gander.

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[1] UK Small Business Statistics | FSB Business Data

[2] Underinsurance remains a problem for UK businesses – report | Insurance Business UK

[3] 50+ UK Business Insurance Statistics 2024 | money.co.uk

How Consumer Duty has changed the industry – for better or for worse – and what comes next?

It’s been two years since the implementation of Consumer Duty. This industry-disrupting regulation was introduced by the FCA to boost standards across the industry – pushing providers to prioritise and evidence positive outcomes for customers.

Consumer Duty was developed to deliver good customer outcomes in products and services, price and value, consumer understanding and consumer support.

With varying degrees of enthusiasm to outright cynicism, Consumer Duty was greeted with mixed reactions by those charged with implementing it.

Some saw it as a game changing opportunity to create a customer-centric culture, while others felt it was ‘lip-service’ that got in the way of doing their day job – a series of very expensive tick boxes that would blow over in time.

It didn’t. And it won’t.

Two years later, it’s here to stay and continue the party of putting customers first.

The good, the bad and the ugly

As with several regulatory resets over the years, implementing Consumer Duty put pressure on management time and resource – and undeniably squeezed profit margins.

But for other firms, Consumer Duty has enabled them to genuinely glow-up their client strategies with greater focus on fair pricing, clear and transparent communications and better support for vulnerable clients.

Two years on, the duty remains the regulation holy grail for insurers who stand by the mantra of doing right by customers.

Businesses thriving under Consumer Duty have gone beyond just treating customers ‘fairly’ – they place them at the centre of their business model!

Putting our clients first

At Irwell, we have embraced the opportunities presented by Consume Duty.  We have implemented several measures to align our client relationships with the duty’s best practice guidance.

Firstly, we have improved the clarity around our terms and conditions in policy wordings. For example, our LEI policy wording has been updated to emphasise that customers should seek and follow advice. We have also provided practical examples within the wording where the customer may need advice which gives added reassurance and makes the wording more relatable.

In line with the regulator’s focus on improving MI to help identify, evidence and monitor the delivery of good outcomes, we have introduced a comms monitoring and training programme and updated our processes to provide quicker claims determination – a critical element of improving the customer experience.

Consumer Duty puts greater responsibility on the whole distribution chain to share client information to ensure that products and services meet the required standards. At Irwell, our business is built on mutually beneficial and respectful partnerships, so we welcome this initiative with open underwriting and product development arms. We collaborate closely with our partners to help identify gaps in the market and policy provision to ensure that niche markets are better represented and protected.

Investing in Consumer Duty compliant procedures will continue to be a business priority as we expand our client base and product portfolio. We believe there is no better way to do business that putting clients first, last and foremost.

Can AI deliver CD fit for the future?

Love it or loathe it, Consumer Duty is here to stay – the only question is how will it evolve? The proliferation of AI appears to be taking over our industry.

The FCA has indicated it will make greater use of data analytics to drive decision making on business behaviour and monitoring compliance.  Digital solutions will also undoubtedly play a vital role in helping businesses comply with the evolving demands of Consumer Duty.

From automated compliance tools to digital platforms that enhance the customer journey, how can tech adoption help humans improve client engagement and experience?

How can insurers adopt a consumer-first approach when the de-humanised tech takeover seems unstoppable?

Can non-humans truly put humans first? Can AI really deliver consumer understanding? How can tech genuinely support vulnerable customers?

We believe it’s about striking a balance between tech and the human touch.

In the liability sector, when it comes to complex risks within a niche, non-standard or hazardous business you still need human relationships. You need the reassurance that a person with years of underwriting experience in mitigating business risk has meticulously reviewed your unique circumstances. You need common sense and pragmatic judgement that no standardised AI-driven data entry can offer.

But we recognise that AI and MI can offer invaluable insights and ongoing monitoring to support all compliance considerations and underwriting decisions.

Humans and robots need to work together to achieve the best outcomes. Let’s see what they bring to the next Consumer Duty party.

A level results day has arrived.

A day that will put an end to the waiting game and anxiety of ‘what next?’ A day that will open doors to dreams, degrees and university life for A level students around the country.

But will the Renters’ Rights Bill close those same doors as quickly as they opened – preventing students from being able to find accommodation in their chosen university city? There were 758,000 applications for full-time undergraduate places through UCAS last year – all who need somewhere decent and affordable to live.

But will they find their university dreams shattered – not by grades, but by a lack of somewhere to live?

Quite possibly yes.

Unless the Government U-turns on Section 8 of the Renters’ Rights Bill which will allow student landlords to regain possession of their properties at the end of each academic year.

Under the current proposal, only landlords letting HMOs would be able to regain their properties to re-let to next year’s student intake. One and two-bed student properties would be excluded – despite these smaller homes accounting for around a third of student accommodation in the UK.

Student housing crisis

Around 30% of students across the UK live in private rented accommodation that is not in purpose-built or provided by their higher education provider. Many popular university cities are already struggling to put roofs over the heads of their students – which is forcing up rents and making decent student accommodation the privilege of the wealthy.

Research reveals that 65% of students say that housing now influences where they apply to study – not just the course credentials and the city social scene! Plus, almost 50% are concerned about the current shortage of suitable accommodation which forces many to stay home under the roof – and bank of mum and dad.

Unless MPs back a key House of Lords amendment to the Bill, students could face a housing shortage and cost crisis – with those from disadvantaged backgrounds being hit hardest.  

MPs have the chance to protect the UK education system by safeguarding the provision of homes that make higher education possible for all – not just the privileged few.

For those students who will be out celebrating their A level results tonight, the 8th of September could prove to be the next big ‘results day’.

Stats source: https://www.nrla.org.uk/news/mps-must-seize-final-opportunity-to-protect-access-to-higher-education

Workplace health and safety has always been a priority – and a thorn in the side of some high-risk sectors. The liability and legal implications for non-compliance can be at best – costly – and at worst – fatal.

But it also represents an opportunity to redefine best practice and business values.

From construction, manufacturing and warehousing to scaffolding and freight, HSE regulations are more than ticking off compliance checklists. They are instrumental to protecting employee health, safety and wellbeing, operational continuity and business reputation.

Despite years of improvements in health and safety culture within these sectors, the reality remains – business risk is evolving – not disappearing.

The stats shouldn’t add up

According to the Health & Safety Executive 124 workers and 92 members of the public were killed in work-related accidents in 2024/25 reported under RIDDOR.[1] A further 604,000 workers sustained a non-fatal injury according to self-reports from the Labour Force Survey in 2023/24. [2]

For business owners, HR and compliance professionals, these aren’t just statistics. They are people with families and friends. They are lives lost or changed irrevocably. They are a wake-up call that more needs to be done.

They are an alarm bell signalling that mature health and safety policies and outdated procedures may need a fresh pair of eyes – and liability insurance that includes a H&S review tailored to the unique business or sector risks.

Closing the gap on human error

IOSH, NEBOSH, RoSPA and RIDDOR certificates may proudly adorn your boardroom or site office walls. But no matter how robust and relevant your H&S accreditations, tiredness, distraction or unfamiliarity can all contribute to unintentional lapses that could have far-reaching consequences.

This is where AI-powered vision is changing the H&S game.

This artificial but intelligent layer of site safety provides an extra pair of eyes – monitoring that protocols are being followed, risk is being assessed – and people are playing by the rules.

AI can keep a watchful, 24/7 eye on a contractor arriving on-site for the first time or an experienced forklift operator at the end of a long shift – when you can’t.

AI enhancing HR and H&S

AI surveillance technology analyses visuals from cameras across your site. Unlike standalone, standard CCTV, these systems go beyond recording and storing footage – they interpret it – and provide real-time insights.

From monitoring noise or chemical levels to flagging dangerous machinery usage or ergonomic and PPE hazards, AI recognises unsafe behaviour and turns live data into early warnings and alerts.

It can spot concerning patterns in incident reports and monitor access to high-risk or prohibited areas and alert key personnel when company rules and H&S procedures are not being followed.

This may sound like the robots are taking over and Big Brother is watching, but this technology is about putting people first. It can be an integral component of a compliant and connected safety toolkit. But it also needs to work alongside the irreplaceable compassion, integrity and intuition of humans that no robot can deliver. Well, not yet anyway.

Futureproofing proactive prevention

AI computer vision and monitoring systems are also scalable to suit an SME single-site facility through to a large corporate with nationwide operations – or as business needs evolve.

As Artificial Intelligence continues its upwards and unstoppable trajectory in all areas of work, the applications and impact are set to reimagine workplace safety and redefine HR policies of the future.

AI-driven H&S adoption isn’t just about embracing new tech. It’s about building the foundations of a resilient, people-focused business.

It helps transition workplace safety from a boardroom burden to a company cultural strength.

Forewarned is forearmed when it comes to site safety

Companies that have rigorous H&S policies in place aren’t just compliant – they’re more productive, more trusted and therefore more attractive to employees, customers, investors and partners.

Prioritising people and workplace safety is one of the strongest signals of organisational ESG values – especially in high-risk industrial environments.

It’s a strong message that resonates in today’s world of social media naming, shaming and sharing.

Employers who invest in AI safety systems provide an extra layer of continuous security – and meaningful insights to make work environments safer. Just like our liability policies that include SafeCheck.

 SafeCheck is an on-site or online H&S review that informs businesses what they are doing well – and where and how there is room for improvement to help achieve HSE compliance.

Our liability insurance sends a clear message – this is a business that protects and values people. And that is a message worth sending.

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[1] Work-related fatal injuries in Great Britain – HSE

[2] Non-fatal injuries at work in Great Britain – HSE

The Employment Rights Bill is currently progressing through Parliament. 5 ways employers can plan ahead and prepare for the progressive changes.

Today’s employees increasingly expect flexibility, support and inclusivity.

Legislation is currently progressing through Parliament to reflect this shift in expectations. But adapting to these new norms is not just about legal compliance, it’s about redefining workplace practices with what people value.

Fairness and flexibility are at the core of The Employment Rights Bill. It signals a dramatic shift towards greater protection for workers through improved job security and flexible working arrangements.

The Bill is poised to reframe employment law to align with evolving societal attitudes towards previously unprotected workers, grief, gender equality, shared parental responsibility and work-life balance.

Around 1.2 million unprotected agency workers, 4.8 million working mothers and the UK’s 1.4 million sandwich carers with responsibilities for elderly parents and young children stand to benefit greatly from the new legislation.

Employment tribunal claims and costs rising

From April 2023- 24 the number of employment tribunal claims rose from 86,000 to 97,000 with an average unfair dismissal award of £13,749.

However, the highest payout in an unfair dismissal claim was £179,124 and £995,128 in a sex discrimination case – with the associated legal fees on top.

The average legal costs for an unfair dismissal case in the UK for employers can range from around £7,500 for a simple case to £40,000 plus for a high complexity case, highlighting the need to have the reassurance of a legal expenses policy in place.

At the end of March 2025, the open caseload was 45,000 claims, a staggering increase of 32% on last year which indicates that employees are becoming more aware of their rights and increasingly willing to challenge perceived injustices.

With unfair dismissal claims accounting for 22% of the total caseload, this backlog is expected to increase at an unprecedented rate when the proposed day one right to claim unfair dismissal comes into effect.

Could your clients cover the legal costs of an employee dismissal or discrimination claim?

Forewarned is forearmed

5 key changes clients should prepare for

To avoid potential costly and lengthy employment disputes, employers should start laying the groundwork now – by reviewing their procedures and policies in preparation for the anticipated changes.

1. Leave enhancements for carers

Measures designed to support employees with caring responsibilities during key life stages are a key focus of the Bill. 

Changes are proposed to improve the accessibility of paternity, bereavement, unpaid parental and neonatal care leave.

For both paternity and parental leave, the service requirement will be eliminated, allowing employees to take two weeks of paternity leave within the first year after their child’s birth or adoption. The Bill will further permit paternity leave to be taken after taking shared parental leave.

For unpaid parental leave, all employees can take up to 18 weeks of unpaid parental leave per child until their 18^th birthday with a cap of four weeks per year.

Employees with babies admitted to neonatal care within the first 28 days of life who need a minimum of seven days in hospital will have the legal right to up to 12 weeks of paid leave from day one of employment – as well as their standard paternity and maternity leave.

Pregnant employees and those returning from family leave must be offered suitable, alternative roles in redundancy situations.

The legislation also establishes a day one right to time off to grieve the loss of a loved one, permitting a minimum of at least one week of paid leave. Bereavement leave must be taken within 56 days of the individual’s death.

These complex changes demand a thorough review of all HR policies and practices – if in any doubt, employers should engage with legal specialists who can ensure company contracts at all levels align with legislative changes.

2. Day one unfair dismissal protection

Currently, employees need to have at least two years’ continuous service to bring most unfair dismissal claims. Under the new proposals, some protections will apply from the first day of employment, particularly where dismissals relate to working hours and flexibility.

The length of the statutory probationary period is expected to be increased to nine months and the scope of reasons for unfair dismissal is also likely to be extended.

This means employers will need to proceed with caution when terminating employment – contracts terms and dismissal processes should be watertight.

3. Right to request flexible working from day one

The Bill proposes that employees can make a request flexible working terms from day one of employment – replacing the existing 26-week qualifying period. 

Employees will be entitled to two requests per year, and employers must respond to the request within two months rather than three – but can still refuse on 8 statutory business grounds.

Employers should therefore start to document what forms of flexible working arrangements suit the organisation and formalise legitimate business grounds for refusal.

4. Zero hours contracts abolished

The insecurity of zero-hours arrangements which has plagued retail, hospitality, construction and logistics will be a thing of the past under the new Bill. These contracts will be replaced by guaranteed hours contracts creating more security and financial stability for workers in industries that rely heavily on temporary, casual, freelance or unpredictable work patterns. 

Additionally, the Bill places a strong emphasis on safeguarding the rights of workers in these precarious or non-standard employment relationships with day one protection against unfair dismissal – giving them the same rights as their employed colleagues.

Employers should use the Bill as an opportunity to review and reissue all employee contracts – and create new contracts for workers who have previously had none.

5. And end to fire and re-hire

The Employment Rights Bill will put a stop to “fire and rehire” practices, making it unfair to dismiss an employee if the plan is to re-engage them on new, less favourable terms.

Redundancy and recruitment policies need to be reviewed to reflect this amendment to avoid being exposed to a potentially costly and time-consuming employment dispute.

 Key changes in brief

• Day One protection from unfair dismissal
• More consistent working hours and fair conditions for all workers – employed and contracted
• Immediate access to request flexible working 
• Additional support for carers and parents 

Key action points

• Update employment contracts, HR policies and employee handbooks to reflect new rights 
• Review recruitment, probation and dismissal procedures

• Prepare for flexible working conditions
• Consider the additional costs and obligations arising from guaranteed hours and carer leave 

• Equip HR and management teams with training and tools to implement the new legal framework 
• Consider legal expenses insurance to protect yourself from potential employment disputes

Stat Sources

Menopause claims triple in two years, tribunal statistics show | theHRD

https://www.mfmac.com/insights/employment/the-annual-employment-tribunal-award-statistics-have-been-published-for-20232024

https://bsc.croneri.co.uk/whats-new/latest-tribunal-statistics-released

AM Best A rating may be the end goal, but we still have a strong financial story to tell.

What landlords need to know about the evolving rental risk landscape

After years of consultation, debate and delay, the Renters Reform Bill is inching closer to becoming law – a move set to reshape and shake up the private rental sector in England.

While the Bill’s intentions to create a fairer rental market have been welcomed by tenants, for landlords and letting agents, the changes mark a significant shift in operational, financial and reputational risk.

What’s changing?

The Bill proposes sweeping reforms, including:

• The abolition of Section 21 ‘no-fault’ evictions – replacing them with more structured grounds for possession under an updated Section 8 framework.
• Doubling notice periods for rent increase to two months.
• The introduction of a Decent Homes Standard in the private rented sector.
• A new digital Property Portal to increase landlord accountability and compliance visibility.
• Greater rights for tenants to keep pets. Landlords will be required not to unreasonably withhold consent
• A strengthened Ombudsman scheme to handle disputes more efficiently.
• Changes to tenancy structure, with assured shorthold tenancies replaced by periodic tenancies.

Although the government has stated that Section 21 will not be abolished until court reforms are in place, landlords should be preparing now for the inevitable legal and procedural shifts.

6 key risks for landlords

1. Longer dispute resolution timelines

Without Section 21, regaining possession could become a more protracted and litigious process. This heightens the risk of extended void periods, arrears and legal costs, particularly for landlords with tenants in breach or who need properties back for sale or family use.

2. Compliance and regulatory exposure

The Property Portal will create a central register of landlords and their legal compliance. This transparency could increase the risk of penalties for administrative oversights or non-compliance – especially for those managing multiple properties or relying on outdated systems.

3. Insurance considerations

With longer tenancies, rent arrears and the potential for harder-to-resolve disputes, property owner liability, legal expenses insurance and rent guarantee protection will become more important – but possibly more complex to secure.

4. Legal expenses protection and Rent Guarantee protection: a growing necessity

As eviction cases shift from a straightforward Section 21 process to a potentially contested Section 8 route, the importance of legal expenses protection is magnified. Policies typically cover solicitor’s fees, court costs and legal representation, which can otherwise escalate quickly in contentious possession proceedings. Whilst Rent Guarantee protection can also provide a landlord with piece of mind that their rent arrears will be paid where the tenant is refusing to pay whilst they are seeking possession of the property.

Landlords should check whether their current insurance includes legal cover – and if so, under what conditions. Policies should ideally be aligned with the updated grounds for possession and flexible enough to support newer types of dispute resolution, such as engagement with the Private Rented Sector Ombudsman.

Working with an insurance broker who understands the rental market and the changing legal framework is also advisable to ensure adequate and up-to-date protection.

5. Increased financial pressures

Landlords may face increased costs associated with meeting new Decent Homes Standards, including energy efficiency upgrades or structural repairs. For those with tighter margins or portfolios of older properties, this could affect profitability.

6. Reputational risk and tenant relations

A more empowered tenant population – backed by an Ombudsman and open records – means landlords must carefully manage communication and service levels to avoid reputational damage. Professionalism will become increasingly important in maintaining tenant satisfaction and minimising complaints.

Preparing for a new era of letting

While the Bill is still making its way through Parliament and some timelines remain uncertain, proactive landlords and agents should:

• Review possession procedures and stay up to date with the evolving Section 8 grounds.
• Undertake compliance checks on all properties, particularly with regard to minimum standards and documentation.
• Evaluate risk transfer strategies, including updating insurance policies for rent guarantee, legal protection and property owner liability.
• Consider professionalising operations, either through letting agents or portfolio management services to ensure preparedness and resilience.

The Renters Reform Bill represents a fundamental shift in the landlord-tenant relationship – and with it comes a rebalancing of risks.

While the reforms may lead to a more stable and transparent rental sector in the long term, landlords must act now to mitigate the transitional risks and protect their investments.

Proactive, informed management – and the right insurance coverage, including legal expenses and rent guarantee protection – will be key to navigating the change – and minimising landlord risk exposure.

How cyberattacks are reshaping business risk

From boardrooms to boiler rooms and beyond, cyber criminals are now a mainstream threat. How can insurers and brokers educate and evolve to ensure that clients are properly protected from this new wave of digi-crime?

Cyber-attacks have become one of the most significant operational risks facing businesses today. Once confined to the concerns of IT departments, cybersecurity has now risen to the top of corporate risk registers, with incidents ranging from ransomware to data breaches having the power to shut down operations, destroy customer trust and invite costly legal claims.

A shifting risk landscape

According to the UK Government’s 2024 Cyber Security Breaches Survey, 70% of medium-sized businesses and 74% of large businesses reported experiencing a cyber breach or attack in the past 12 months.

The frequency, severity and financial fallout of these attacks is rising, with ransom demands reaching seven-figure sums and the regulatory penalties for data loss becoming ever more punitive.

What’s more, the scope of risk is broadening. Supply chain vulnerabilities, remote working practices and the growth of AI-driven attacks are exposing new weaknesses in corporate defences. Even businesses with strong IT hygiene are finding themselves liable through third-party failures – or at the mercy sophisticated and relentless cyber gangs.

Just ask M&S who faced over a month without online operations or invaluable customer insights gained from Sparks. The cyber-attack will hit their profits by around £300m – that’s a third of its profit – a sum that will only partly be covered by any insurance pay-out.

Warning: check the small print

There is a widespread misconception that commercial liability policies include cyber cover. Most don’t. Ours doesn’t. We leave cyber protection to the cyber specialists while we focus on protecting other sector specific risks.

But that doesn’t mean that cyber-crime isn’t on our radar.

All commercial insurers still need to be aware of the complex and emerging implications of cyber-attacks and the far-reaching impact on business protection and potential lawsuits.

Although cyber is a niche policy area, it is a growing one that is reshaping the insurance sector and bringing business interruption coverage into the spotlight.

Businesses without a dedicated cyber policy could find themselves dangerously underinsured or entangled in complex disputes over policy response – and payout. Or lack of it.

Blurring the lines between liability and cyber

As digital threats increasingly impact areas traditionally covered under other lines – such as professional indemnity, directors’ and officers’ (D&O) liability and general commercial liability – the lines are blurring.

For example, if a ransomware attack leads to a failure to deliver contracted services, the business may face litigation for breach of contract or negligence – triggering PI or general liability claims. Similarly, directors may be held accountable for failures in cyber governance or risk oversight, putting D&O policies under pressure.

This convergence presents challenges for brokers and underwriters alike. Clarity around exclusions limits and how different policies interact in the event of a cyber-related claim is now more critical than ever before.

Implications for brokers

For brokers and MGAs, the evolving threat landscape presents an opportunity to adopt a more consultative role. Cyber requires a deep understanding of a client’s digital operations, supply chains, regulatory exposure and risk tolerance.

Where clients wrongly assume their general liability or PI policy will respond to cyber claims, brokers must provide education – and where appropriate guide them towards solutions that close the gap.

Fighting fraud

The convergence of cyber risk and online fraud with broader liability exposure will continue to accelerate. With generative AI enabling more sophisticated phishing and fraud attempts, insurers must remain agile and alert.

For the insurance industry, this represents an opportunity: to lead with expertise, drive resilience and help clients navigate the increasingly complex cyber threatscape and how it impacts on all aspects of business liability.

The message is clear: check your policy wording. Read the small print. Examine the exclusions. Study the T&Cs. Ask your insurer. Double check with your broker. It could be time well spent so your business isn’t exposed to cybercrime underinsurance.

AM Best, Solvency and Financial Condition Reports