Tuesday 11th July
Kerry London Professional Indemnity Insurance: Insurance brokers
The last few years have brought many changes that have affected the insurance broking industry. Covid accelerated the introduction of hybrid working, lockdowns tested the limits of business interruption insurance, and Brexit brought ongoing uncertainty to many businesses. These changes have left many brokers with a range of new issues to navigate for the first time.
Protection for an unpredictable future
Comprehensive professional indemnity insurance protects brokers against claims made by third parties that may have suffered a loss due to negligence, an error, an omission, or a breach of contract. The pandemic has shown how unexpected issues can affect the insurance landscape and, therefore, the advice given by brokers. Recent high-profile claims against brokers include pandemic-related event cancellation insurance and a delayed client notification of a cyber hacking-related incident.
New legislation and regulation
Brokers voted for “a period of stability with no regulatory and legislative changes” as the top insurance-related action they would most like to see” at the recent British Insurance Brokers Association (BIBA) conference. Many have found themselves having to interpret how new laws affect a client’s insurance arrangements before they are fully implemented or tested in a court of law.
Secondary legislation under The Building Safety Act is expected to evolve and introduce greater responsibilities for the construction sector throughout the year. This legislation is still evolving and has been reported as having grey areas, so it remains unclear how this new legislation will affect the construction industry and those insuring them. Brokers must keep abreast of the changes to advise their clients on how to protect their business and minimise the risk of future negligence claims.
Emerging risks: Environmental, Social and Governance (ESG) reporting
PI risks for brokers will vary depending on the market and industries they operate in. Understanding ESG is a priority for brokers to ensure they can ask the right questions to present accurate details to insurers. The Task Force on Climate-Related Disclosures (TCFD) mandatory ESG reporting guidelines created additional reporting responsibilities for companies with over 500 employees and a £500 million turnover. Since April 2022, these disclosures have become mandatory for 1,300 of the largest UK companies and financial institutions. Qualifying businesses are now required to report on governance, strategy, risk management, metrics, and targets.
Examples include:
- Describing climate-related risks and opportunities in the short, medium and long term
- Describing the targets used to manage climate-related risks
- Describing management’s role in assessing and managing such risks and opportunities
Keeping an eye on the growing importance of green credentials is paramount to everyone working in the insurance industry and a priority for brokers.
PI insurance earlier renewals
BIBA advises brokers to start their insurance renewal conversations earlier to secure the most competitive, comprehensive cover as follows:
- For smaller brokers, the best approach is to contact a specialist PI broker at least 8-10 weeks before renewal
- Larger brokers may need longer and might want to approach a specialist broker at least 12 weeks before renewal
Using one specialist PI broker with access to a broader range of markets will provide access to the best insurance terms. It will also prevent any issues with insurers seeing PI insurance quotes for one broker from various sources.
Kerry London – Professional Indemnity experts
As construction specialists, Kerry London’s Professional Indemnity team has specific expertise in the risks faced by professionals working in the construction market, such as architects, surveyors, and engineers. Cover includes:
- Professional negligence resulting in civil liability
- Claim defence costs
- Loss of documents or data
- Unintentional breach of copyright and/or confidentiality
- Libel, slander & defamation
We are knowledgeable in the risks associated with Modern Methods of Construction (MMC) and Design and Construct (D&C) projects and can offer cover that is specifically designed for these professions. We understand that PI costs have become the largest insurance expenditure for many firms, but equally, which is why we aim to strike a balance between comprehensive coverage and affordable premiums.
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Kerry London is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent and Lloyd’s accredited broker, which means that we work with a wide range of niche and major insurers.
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note, we have relied on information sourced from third parties, and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law.
Categories: Professional Indemnity,
