Many businesses need professional indemnity cover. Without it, they literally can't operate.
Unfortunately, the cost of professional indemnty (PI) cover has been on the rise for some time now. We want to make sure our clients are aware of this, and the reasons why.
More PI claims following significant events
Following major events such as the Grenfell tragedy, the fire at Bolton University and the collapse of Carillion, there has been a significant increase in PI claims throughout the UK.
This surge in demand for PI cover has left insurers to pay the hefty price tag of more claims with a limited financial supply. As a result, insurance experts confirm that the PI market has lost half a dozen insurers in the past year.
Insurers that continue to cover PI have implemented measures to reduce their risk of paying out costly claim settlements. These include:
- Requiring extra documentation
- Increasing premium rates
- Implementing further cover restrictions
- Increasing policy excesses
What does this mean for businesses?
Many businesses have seen their PI insurance premiums increase significantly in the last year. With some insurers withdrawing from the market and others reducing their risks, it's more difficult to find cover.
Even well-known insurers are offering higher rates than they have in previous years, or sometimes refusing cover.
You can help your business to maintain cover with this guidance:
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Communicate with your broker—Keep in touch with us and we'll help you stay informed and covered on the correct basis.
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Start the renewal process early—Be sure to start your PI policy renewal process as early as possible. Doing so will give you plenty of time to gather any extra documentation required for renewal.
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Invest in risk management—Now more than ever, investment in robust risk management processes is a must. Provide documentation of these practices to your insurer upon renewal. If you need help, let us know. Our specialist risk management team can offer bespoke support if required. Managing risks effectively can reduce the chance of claims occurring—an important consideration for insurers.
As a broker, we will always look to keep costs down and offer the best insurance terms we can. We will continue to negotiate with insurers on your behalf. We'll also provide the support you need to get competitively-priced cover in these difficult times.
If you have any queries about your Professional Indemnity insurance arrangements, get in touch the team at Bollington as soon as you can.
