Bexley Council to tender for new insurance contract with focus on cyber security

Bexley Council to tender for new insurance contract with focus on cyber security

Bexley Council is set to begin the process of finding a new provider for its main insurance contract, with a tender expected to be issued in January 2027. The current contract with Zurich, which has been in place since 2018, is due to expire in June 2027. The council plans to use a framework agreement for the procurement, a move that offers pre-approved suppliers and an efficient process. The rationale for the January 2027 tender issuance, with a decision anticipated in March or April of the same year, is to ensure the new contract must be in place by 1 July 2027. While an explicit contingency plan for delays is not detailed, the indicative timetable has been established, and this is expected to be achievable.

The council intends to continue its existing model of combining self-insurance with external insurance. A new element being introduced into the tender is a specific 'lot' for cyber security insurance, reflecting the growing importance of digital protection. This move is driven by the fact that when this contract was procured initially back in 2018, cyber security wasn't something that was about as prominently as it is now. The council's move towards a Zero Trust security model and the transition from Microsoft E3 to E5 licensing are intended to strengthen cyber protection. The market for cyber insurance is now softer, meaning what you get for what you pay is not so extreme.

Consideration will also be given to insurance arrangements for Human Rights Act claims where no physical or psychiatric injury is sustained. The council's imprest account, which acts as a self-insurance mechanism, held £1.60 million as of September 2026.

During a meeting of the Finance and Corporate Services Overview and Scrutiny Committee, councillors raised questions about the rationale behind not always selecting the lowest cost option. Bexley Council will consider best value when evaluating insurance providers, which does not only consider the 'cost' of the insurance provision but additional support, training and guidance that is provided. This can include exclusive access to webinars, additional training or templates for areas such as business continuity planning.

Assurances were given regarding the council's exposure to contract inflation. The council's strategy for managing contract inflation includes discussions during the contract confirmation phase to say how long we would want to keep the contract at a rate before inflation increases. The long-term agreement is an agreement to agree the rating. It's not an agreement on the price. Inflationary increases are capped and linked to an index, generally like the average weekly earnings index, so that it can be maintained.

Concerns were also raised about the adequacy of information on new and changing risks. Insurers considered would be large multinational organisations who, by their very nature, have to be adept to the changing world. These evolving risks include those posed by climate change and the increasing prevalence of electric vehicle batteries. The council will assess insurers' capability by requiring them to have a very strong financial rating and or approval through the Marsh Security Committee.

Regarding excess levels, Bexley Council's current levels are comparable to other authorities. The broad feeling is that these levels do what you want it to do, which is to move the attritional level claims, the bulk of the exclusions that you would have, away from the insured exposure, such that they are essentially self-insured matters. While some authorities have lower excess levels and others have higher, Bexley's current position is very much in the pack. The potential for increasing excess levels is discussed, with an example of maybe a doubling of some of the levels that you have to achieve a significant saving in premium, but this would mean retaining a much higher exposure.

Further details on the meeting can be found in the Public reports pack 14th-Oct-2026 19.30 Finance Corporate Services Overview and Scrutiny Committee.