Aust IT industry insurance soars

Written by Patrick Gray, ZDNetSoaring professional indemnity and public liability insurance costs have sparked outrage among IT contractors, employers and employment agencies.


Wednesday, 11 June 2003

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Written by Patrick Gray, ZDNet
Soaring professional indemnity and public liability insurance costs have sparked outrage among IT contractors, employers and employment agencies.
Managing director of Melbourne based Imagineering Technologies is feeling the impact already.
“It has had a major financial impact… it’s something that we need to either absorb or pass on to our clients. It’s an unacceptable situation,” he said.
Proctor cannot understand why the insurance industry is stepping up premiums when market conditions haven’t changed.
“I don’t believe the IT industry in its current state has changed greatly over the last three to four years,” he said. “I don’t think there’s any justifiable reason”.
Although he agrees that there needs to be some sort of intervention, Proctor says he would be happy if an industry group got involved.
“I think someone needs to review the whole situation, whether it’s government or some other body,” he said.
The most significant immediate side affect, Proctor says, is the increasing reliance his company and others will have to place on employment agencies for payroll and resourcing.

Command Recruitment’s Jim Breeze says the increase in fees has been startling.
“Our insurance has increased by 167 percent–that’s purely for professional indemnity and public liability,” he told ZDNet Australia.

He confirmed that the increase is in the order of tens of thousands of dollars.

“We’ve just got to run with it. Unfortunately that means we’ve had to increase our on-costs to our customers by one percent and that’s across the board in IT,” he said.

According to Breeze, the price changes are putting strain on an already pressured industry
“It’s stopping what is already a flat employment market from getting any better,” he said. “It seems an unjustified cost increase”.

The government should intervene because there is no evidence to suggest that IT related indemnity claims have increased, Breeze said.

“A lot of people in the industry have ever heard of a claim being made”.

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IT, News
Written by Patrick Gray, ZDNetSoaring professional indemnity and public liability insurance costs have sparked outrage among IT contractors, employers and employment agencies.Managing director of Melbourne based Imagineering Technologies is feeling the impact already.“It has had a major financial impact… it’s something that we need to either absorb or pass on to our clients. It’s an unacceptable situation,” he said.Proctor cannot understand why the insurance industry is stepping up premiums when market conditions haven’t changed.“I don’t believe the IT industry in its current state has changed greatly over the last three to four years,” he said. “I don’t think there’s any justifiable reason”.Although he agrees that there needs to be some sort of intervention, Proctor says he would be happy if an industry group got involved.“I think someone needs to review the whole situation, whether it’s government or some other body,” he said.The most significant immediate side affect, Proctor says, is the increasing reliance his company and others will have to place on employment agencies for payroll and resourcing.Command Recruitment’s Jim Breeze says the increase in fees has been startling.“Our insurance has increased by 167 percent–that’s purely for professional indemnity and public liability,” he told ZDNet Australia.He confirmed that the increase is in the order of tens of thousands of dollars.“We’ve just got to run with it. Unfortunately that means we’ve had to increase our on-costs to our customers by one percent and that’s across the board in IT,” he said.According to Breeze, the price changes are putting strain on an already pressured industry“It’s stopping what is already a flat employment market from getting any better,” he said. “It seems an unjustified cost increase”.The government should intervene because there is no evidence to suggest that IT related indemnity claims have increased, Breeze said.“A lot of people in the industry have ever heard of a claim being made”.
 
 

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