My premium has doubled this year and I’ve not done anything different, in fact my turnover has reduced. Why is this?
We are currently experiencing the hardest PI market seen for a long time. It’s not just IFAs who are struggling, but most industries in general. With restricted capacity and limited appetite, the cost of PI insurance is constantly rising. When choosing to test the market, I would suggest dealing with one specialist broker. One who has as much access to the insurer market as possible. As mentioned above, duplication may jeopardise your position with an insurer.
My insurers want to apply a reduced limit of indemnity for DBT work, is this allowed?
The FCA Handbook requires IFAs to carry minimum levels of cover. However, we have seen policies which contain specific restrictions for DBT activities (for example; reduced limits of indemnity of £250,000 or £500,000).
The director of ‘life insurance and financial advice’ at the FCA, has recently stated
“Appropriate cover should not exclude relevant lines of business, such as defined benefit transfers. It should not include sub-limits, meaning that the cover falls below the minimum requirements and for example where financial advisers are IDD firms the minimum requirement is €1.85m.”
We have worked with firms that have been asked to give up their relevant permissions if they cannot increase the inner limits and have found them appropriate cover.
About Daniel West Cert CII – Associate Director
Daniel has been with Apex Insurance Brokers for 5 years and specialises in the placement of IFA and Financial Institution Professional Indemnity Insurance (PI).
As an independent broker, Apex can offer one of the most extensive choices of IFA insurers available, with specialist sector and product knowledge to offer their clients some of the best terms available in the market. Their extensive IFA insurance experience allows them to fully understand your business, advise how to best present your risk and what insurers are best suited to your firm.
