Recent insurance disasters—such as the Grenfell tragedy and the collapse of Carillion—have generated a significant increase in professional indemnity (PI) claims throughout the UK. This surge in demand for PI cover has resulted in a major market fluctuation, leaving insurers to pay the hefty price tag of additional claims with a limited financial supply. Consequently, insurance experts confirm that the PI market has lost half a dozen insurers in the past year.
Further, the insurers that have remained in the PI market have implemented measures to reduce their risk of paying out costly claim settlements. These measures include requiring extra documentation, increasing premium rates and having additional cover restrictions in place. Despite the harsh implications of the hardening PI market, you can help your organisation maintain adequate cover with this guidance:
- Communicate with your broker — Ensuring frequent communication with your broker will help you stay informed and covered during these market conditions.
- 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.
- Invest in risk management — Now more than ever, it’s vital to invest in robust risk management processes and provide documentation of these practices to your insurer upon renewal.
The content of this Profile is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly.
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