Professional indemnity insurance: Frank Maher reviews problems in practice
This is the second of three articles on professional indemnity insurance (PII), which 90% of firms will be renewing on 1 October 2015. There will always be some firms which have a problem on renewal. They may not necessarily be bad firms, but claims have a larger impact on the economics of insuring small firms than they do larger ones.
Problems might be because of a poor claims history, or might be because you have discovered a significant issue which may cause claims in the future, but has not yet done so. The writer has acted for many firms in this position over the years and it is a sad fact of life that for no obvious reason, many of these problems emerge in the month before the insurance renewal.
Examples have included rogue partners who have engaged in mortgage-related or other fraud, and cases where firms have discovered that they may have made a series of errors on a large number of similar matters. Examples of the latter have included hotel schemes
