Vital protection for your business
Many Financial Advisers Professional Indemnity (‘PII’) insurers currently class IFAs amongst their other highest risk professions and biggest exposures to paying large claims. Many IFAs meanwhile could be forgiven for viewing the PII certificate as only a licence to trade, as opposed to real protection to their businesses. This is mainly due to the persistent stripping away of insurance cover over past years, punitive excesses and a shift in insurer’s attitudes, particularly towards paying claims.
IFAs believe there used to be a genuine intent to pay their claim, but increased competition and the recent recession have led to many well established insurers scrutinizing policy wordings and information provided when notifications are made. It’s come down to ‘may’ give rise to a claim or ‘likely’ to give rise to a claim, leaving the IFA in limbo whether to notify or not. A prime example has been recently suspended funds, and the claims management solicitors encouraging investors to claim against their IFA. Are these exposures notifiable circumstances or not? Or should they be notified only when a genuine complaint is made? If they are notified, will it be accepted by the insurers? And if notified, does it provide a new insurer with the opportunity to exclude this work moving forward? Either way the insured is left without cover. So how can this be rectified and what can the IFA do to avoid these pitfalls?
Brunel Professions have recently launched their own policy wording which we believe provides a clear message of the ‘intent to cover’ by the insurers backing it. Our team of specialists have years of experience understanding the IFA Market and come equipped to handle complex queries regarding claim notification, claims handling, risk management and contract review. We also specialise in advice surrounding M&A’s and past liabilities which is vital when changing the risk profile of the business.
Your PII certificate is a licence to trade but it’s also a legal defence policy which you must use to it’s full capability.