This gives your broker time to approach the insurer and present your case, answer any additional questions they may have, negotiate on your behalf and go out to the wider marketplace if the renewal does not provide the cover you would like.
Making your application
No matter what the outcome of a complaint, there is no doubt that it will bring with it new challenges when your PI insurance is due for renewal.
The number of insurers in this market has reduced significantly in recent years, and those that remain appear to be placing increasing restrictions and/or limitations on the cover offered.
The companies facing the biggest challenges are those that provide DB advice, or have in the past, but even advisers without DB permissions are still facing exclusions for Arch Cru, Keydata, unregulated collective investment schemes, suspended funds and restrictions for property funds.
As interest-only mortgages seem to be another focus for claims management companies, those with mortgage permissions are also finding securing PI cover to be expensive and more of a challenge.
To be in the best possible position at renewal, make sure your PI application is informative. Brokers are so busy — the easier you make their job, the easier your renewal will be.
The presentation of your application will have significant bearing on the cover offered. If your broker receives a form that contains scant detail and has a coffee cup ring on the front, it will go straight to the bottom of the pile.
Make sure you provide all the information insurers need to assess the risk your business poses. This means completing the application form as fully as possible and if there is not room to answer a question comprehensively, expand on the point in a covering letter.
Insurers are becoming increasingly interested in companies’ systems and processes, so by providing documents that outline your administrative procedures in support of your application, it shows you take your regulatory responsibilities seriously and gives a feel for how your business is run.
Push back if the insurer tries to impose exclusions or restrictions you have not had before. Ask your broker to find out why they have been imposed, what justification there is for adding them, and ask for them to be removed.
We often find that advisers will accept the first offer made without challenging the insurer’s logic, and those who do push back have managed to persuade insurers to reduce, remove or amend the restriction/exclusion.
Having a history with your insurer does provide them with an element of comfort, but do not be afraid to shop around.
We would not advocate actively switching PI companies purely to secure a reduced premium, but we do recommend obtaining a comparable quote, as it can be a useful bargaining tool if you want to remove an exclusion or restriction.
