Over recent years, a number of issues have driven a continued effect on the professional indemnity insurance (PI) market ‒ resulting in a lack of supply that is driving premiums up – but help and support is available for BESA members seeking to secure efficient, cost-effective PI cover.
Why are PI Premiums Rising?
The PI insurance market has been ‘hardening’ – which means the demand for cover is not matched by supply – for some time. This trend has been caused, at least in part, by issues like the Grenfell Tower disaster and the collapse of construction giant, Carillion. The resulting rise in claims has naturally seen premiums increase and left fewer insurers willing to be involved in the PI market, creating a lack of supply.
This has had clear knock-on effects for building engineering services firms buying PI on the open market. Many face significant rate increases when the time comes to renew cover – particularly those renewing with recent claims.
Despite these challenges, however, to simply reduce or even pause cover would be false economy. On the one hand, maintaining adequate PI cover is a requirement of BESA membership, and one the other, insufficient cover could leave your firm financially exposed if the worst should happen.
There are a number of steps you can take to improve your chances of getting the best deal on PI for your firm:
- Find insurers who have full knowledge of the overall risk profile of your business and sector.
- Seek insurers who offer a range of payment options and identify where you may be able to get preferential pricing.
- Identify if there any specialist insurers or brokers who may already represent firms in your sector – strength in numbers can really help.
- Make sure you allow plenty of time to get the best deal – it can take time to source the correct cover. Start the ball rolling early so that you don’t end up in a situation where you have to take an expensive option because you ran out of time.
- Take advantage of insurance health checks, which could help identify savings and ensure your business is fully protected.
- Make sure you highlight your accreditations and proof of competencies – this could help reassure insurers you are a risk worth underwriting.
To find out more about the hard market conditions in the PI insurance market, and what BESA members can do to help navigate through these challenges, look out for your invitation to a BESA webinar which will provide you with a range of practical advice and guidance on the 12 February.
BESA is an Introducer Appointed Representative of Jelf Insurance Brokers Ltd. BESA Business Insurance Services and Marsh Commercial are trading names of Jelf Insurance Brokers Ltd which is authorised and regulated by the Financial Conduct Authority (FCA). Not all products and services offered are regulated by the FCA (for details see www.marshcommercial.co.uk/info/regulation/). Registered in England and Wales number 0837227. Registered Office: 1 Tower Place West, London EC3R 5BU.