Insurance vs Assurance

Because of ‘soaring’ PI insurance premiums, some firms are beginning to dismiss insurers and provide for themselves when it comes to professional indemnity. Is the only self-assurance in self-insurance?

Insurers have been warned that toughened rates in the professional indemnity market is resulting in clients bypassing the brokers altogether and looking internally to fund their costs. This worrying concept comes in light of recent comments about a possible revival of the FSA granting certain firms the ability to self-insure if they can prove that no cover is made available.

This PI insurance concept would be carried out for small firms who cannot cope with the amount and scope of premiums set by insurers, and would prove disastrous for many firms nationwide.

Insurance agent Nick Kelly commented on the possible return of this PI insurance concept with an apprehensive outlook. “Nobody wants us to go back to that situation but unless we get more capacity coming into the PI market, I am concerned that may happen.”

The insurance trade is forever changing and adapting, prices rise and fall and if smaller companies cannot keep up with the premiums set by insurers, it is a situation that must be rectified.

Only time will tell if firms will be legitimately and effectively able to self-insure, and at the moment the state of insurance prices vary across the market. Professional Indemnity Insurance is a widely popular and necessary product and can be found at very reasonable prices, by very reputable insurers. Because it is a particularly effective and detailed package however, it is certainly a policy that must be bought from a broker who offers both advice and customer support.
By:Steven Bailey

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