Archive for April 2011

Professional Indemnity Insurance Buyers Guide

5 Things To Ask Yourself Before You Buy Professional Indemnity Insurance

The What, When, How, Where and Why Guide to Indemnity Insurance for professionals.

Professional Indemnity Insurance is designed to protect you when a problem arises with any professional work you have done. In today’s litigation culture, this form of insurance is becoming increasingly relevant for a range of professions.

Are you thinking about Professional Indemnity Insurance?

Before you buy, it pays to consider the crucial 5 questions:

What exactly is Professional Indemnity Insurance?
Professional Indemnity (PI) Insurance is designed to protect you in the case of professional error. In the course of your working life an instance may occur where unfortunately, the professional skill you exhibit is deemed inadequate. In this situation, a dissatisfied client may seek some form of compensation, resulting in financial implications for you and your business. This is where PI Insurance comes in: it provides financial support for defence costs, withheld fees and any compensation which may be awarded against you. In simple terms, Professional Indemnity Insurance is financial protection against professional error.

Why do I require PI Insurance?
This type of insurance is typically relevant for professionals who regularly give advice to their customers, and/or who are responsible for customers’ data and other intellectual property. It can loosely be regarded as protection against non-physical but nonetheless detectable damages. PI Insurance can be voluntary, but it is mandatory for some professions, such as Architecture, Accountancy and some IT Consultancy.

How does PI Insurance benefit me?

If you are at all liable to be challenged in the competency of your work, or there is scope for your services failing to meet the expectations of your client, then PI Insurance will certainly benefit you. PI Insurance will provide you with financial support if you are accused of professional negligence, misuse of intellectual property, loss of data, dishonesty and defamation incurred by your business. Despite best intentions, no one is immune to mistakes or accusations of mistakes – PI Insurance tackles the consequences of these errors.

When does the cover come into action?

Most forms of PI Insurance work on a claims-made basis. This means that the insurance only covers the claims made during the policy period. If an incident occurs whilst you hold the policy, but the claim is made after you have discontinued the insurance, then the claim will not be covered. On the flip-side, if an incident occurred before the time of holding the policy, but the claim is made once you have the insurance, then you can be protected. Each claim is treated individually – as the policyholder, you can usually select your own limit of indemnity.

Where are there exemptions and conditions?
To ensure the most comprehensive insurance, it is advisable to thoroughly research the policy options available. Many providers of PI Insurance offer industry-specific policies. Requirements are different for each sector: for some, cover is restricted to business carried out within the EU, for example. The policyholder will usually be required to pay an excess for each claim, and the amount varies according to policy. Suitability of Professional Indemnity Insurance can be achieved by the varying levels of cover available. This suitability can be further tightened by bespoke policies which can be continually amended.

Insurance Blog would like to point out that it is particularly important to tailor Indemnity Insurance to the requirements of your individual business. The insurance is ultimately designed to protect you in the case of professional mistakes – choosing the right Professional Indemnity policy is the first step towards annulling these errors. There are many established business insurance specialists out there such as Hiscox that are can help provide would be insurers with further information regarding specialist cover for other areas of your business, a quick internet search will yield the many options and services available!

The Bad Boys of Insurance

The UK Insurance industry watchdog the FSA has been very busy in it’s final year of existence before it is replaced by another quango, and has published figures of which firms are the most complained about by consumers. The FSA is keen to point out that the larger the operation the more likely there are to be complaints about that firms services or products and that the figures do not constitute a league table of bad boys.

Hmm……..what do they show then?

Here’s the top fifty of the most complained about Insurance companies in the UK:

Firm name | Number of complaints opened |Number of complaints closed |Complaints closed within 8 weeks (%) | Closed complaints upheld by firm (%)

Lloyds TSB Bank Plc 84,775 39,789 97 68
Barclays Bank Plc 59,003 40,230 65 68
Bank of Scotland plc 49,566 28,239 88 72
MBNA Europe Bank Limited 36,195 19,256 93 48
National Westminster Bank Plc 26,967 18,126 40 57
The Royal Bank of Scotland Plc 21225 13779 36 49
Capital One (Europe) plc 20,799 23,014 64 30
British Gas Services Limited 19,366 13,085 98 84
Santander UK Plc 18,588 19,956 90 71
Aviva Insurance UK Limited 18,011 18,390 96 55
HSBC Bank Plc 17,157 9,583 56 31
Direct Line Insurance Plc 17,004 16,589 75 54
UK Insurance Limited 15299 15455 73 54
Black Horse Limited 13,959 7,468 87 83
Egg Banking Plc 9,965 7,297 91 58
Churchill Insurance Company Limited 9,949 10,031 76 55
Homeserve Membership Limited 9,504 9,837 97 31
Northern Rock (Asset Management) plc 8,870 8,257 95 72
Royal & Sun Alliance Insurance Plc 8,337 6,677 93 53
HFC Bank Limited 8,151 5,752 91 46
ACE European Group Limited 7,823 8,458 92 41
EUI Limited 7,540 7,663 96 42
Automobile Association Insurance Services Limited 6,549 6,744 99 52
Clydesdale Bank Plc 6,343 3,995 30 41
Marks & Spencer Financial Services Plc 6,049 3,941 88 5
BISL Limited 5,723 5,464 94 21
AXA Insurance UK Plc 5,722 6,137 94 40
Eisis Ltd 5,187 5,676 96 55
The Co-operative Bank Plc 4962 2914 92 60
Ageas Insurance Limited 4,727 3,818 89 51
CIS General Insurance Limited 4,659 4,462 98 64
Nationwide Building Society 4,640 3,371 95 37
Liverpool Victoria Insurance Company Limited 4,629 4,626 95 56
The Carphone Warehouse Ltd 4075 4301 98 22
Firstplus Financial Group Plc 3,967 3,916 65 11
Hastings Insurance Services Ltd 3,916 3,701 88 61
BUPA Insurance Services Limited 3,879 4,128 90 42
Tesco Personal Finance PLC 3791 3785 72 24
Zurich Insurance PLC 3658 2812 90 57
Domestic & General Insurance Plc 3,545 3,636 99 79
RAC Financial Services Ltd 3,459 3,084 98 56
esure Insurance Limited 3,291 3,273 97 41
Shop Direct Finance Company Limited 3,276 2,507 98 7
St Andrew’s Insurance Plc 2,699 2,679 98 28
Endsleigh Insurance Services Ltd 2,698 2,605 98 42
Firstassist Insurance Services Ltd 2,675 2,623 77 34
Allianz Insurance Plc 2,606 2,655 95 35
Lloyds TSB General Insurance Limited 2,221 2,231 97 41

The Financial Services Authority also points out that these figures reflect the number of complaints recorded by the companies themselves and passed to the FSA.

So is the FSA a paper tiger?
Well according to reports today the FSA has handed out more fines to financial firms this swansong year than any year to date…..
The amount of fines that FSA has handed out this quarter has risen from £33.1m last year to £96.7m as the dying institution ups its enforcement activity in a response to public atitiude about financial services in general.

The average fine handed out to perpetrators by the FSA last year was up 49% on the 2010 figures, from £739,284 to £1,099,159.

Do You Know What Your Home Insurance Really Covers You For?

How many of us actually read our insurance policy documents when they drop through the letterbox? Insurance Blogger has just renewed my home insurance and the particular policy booklet is thicker than the local freeads, that arrived at the same time. So this got me thinking about all those people who purchase home insurance cover online and are probably under-insured in some minor or major way!

Although many people who own their own houses in the UK are likely to have some type of basic insurance policy on their property, the extent of that cover, sometimes turns out to be entirely inadequate for the misfortunate few who thought they had bought a good deal.
Stop for a moment and think: You have worked hard to purchase and maintain your house. Why risk losing it or its contents because you have tried to save on your home insurance and have not considered what really needs to be covered?

Specialist House Insurance – The Problem with Standard Home Insurance
If you have a standard home insurance policy, you might think your home’s contents are completely covered under your contents insurance section. Although this could be right to a certain degree, the thing is that some types of home insurance policies that put limitations and restrictions on the cover they supply as described in the policy booklet and online keyfacts documents.
These types of restrictions dramatically add to the possibility of your exposure to a considerable loss which could force you to spend thousands of pounds out of your own pocket to cover the difference. Here is what happened to a person who had a simple level of cover bought through a standard home insurance comparison site, instead of through a specialist provider. This policyholder couldn’t recover the complete cost of a broken Hasselblad camera due to the fact that it went way beyond the policies specified item limits.

Specialist House Insurance – Hobby Camera’s Worth Exceeds the Policy Limit
This example of a loss started when a policyholder dropped and caused harm to his new Hasselblad camera. The man was taking photographs of his relatives away from his home at the time. It was an expensive camera with a value of approximately £6000. The man furthermore had paid an additional premium on this particular home contents insurance to safeguard articles like the camera whenever they are carried off premises.
The client thought the camera was entirely covered under his “enhanced” home contents insurance and put in a claim. The insurance company took the claim but paid only £1500 because this was the policy limitation.
The policyholder then tried to get reimbursement for the remainder from yet another purchase protection plan he had purchased from another company. This company discarded the customer’s claim because the camera was covered under the client’s other home contents insurance, though it wasn’t covered for its total replacement value.

The moral of the story ? Take into consideration buying specialist high value home contents insurance coverage if you value your contents.

Why Do You Need High Value Contents Insurance?
If this policyholder had high value specialist contents insurance, he would not have had to to acquire that second purchase protection coverage and would not have been caught in the “double recovery” trap, which allowed the purchase protection insurance company a basis to turn down the claim. Whilst there does need to be precautionary measures to deter claims from being paid by two separate insurers, it’s even now feasible for actual, documented losses to be denied. A specialist high value home insurance policy would have covered the complete £6000 cost of the camera, if the policyholder had compelling proof of its price. This case is a normal instance of the time-consuming and demanding nature of disputes that often arise with a standard home insurance claim.

Thoroughly comprehending the terms and conditions of your home insurance cover is a crucial issue in obtaining adequate cover online. If you have high value items that need specialist cover, it is best to talk to specialist home insurance experts such as Higos Insurance Services.