Archive for August, 2010

Accountants insurance is changing

Posted by 31 August, 2010 (0) Comment

Accountants indemnity changes 1st September

 

I thought you might be interested to hear about the new rules for accountant’s professional indemnity. Here I explain why it’s important to make an early report of claim circumstances, where problems with timing could occur plus a clear definition of what should be reported.

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Why should I report a minor concern?

Some policyholders believe that premiums go up if they report scenarios that are not really claims. If they don’t report a “circumstance” it proves to be a false economy. When the rules change it’s even easier to make a costly late notification.

Claims don’t happen often yet the early warning signs are common. Questioning fees, complaints about service and a lack of communication are typical indicators that a client or third party may become litigious. Especially if they don’t get their own way.

 

Have the new ICAEW rules made it clearer?

The new wording applies to cover effected on or after 1st September 2010 and makes it clear that claims can and will be declined if “circumstances” are not reported before the expiry of a policy. The intention is to ensure that insurance companies are aware of possible claims before the policy expires.

There is no longer a wishy washy wording – previously insurers refused claims notified later than they would like. This was despite the policy being on a “claims made” basis meaning claims made after the expiry would be covered if the work was completed during the period of cover. The terms of notification were not clear.

Now, possible claim circumstances not reported within the policy period will not be covered. Period.

 

What is a circumstance?

Definitions in policy wordings can be subtly altered without the policyholder noticing. Insurance contracts are full of detail. A “circumstance” is anything likely to affect the underwriters view of the risk. That doesn’t mean all complaints should be reported.

It’s ridiculous to report all complaints so ask your insurance supplier to interpret what is termed reasonable by your insurance company. There is no need for the new rule to result in more red tape. The fact that I’m writing about it means it probably will at the change is embedded into the policy wordings. That is not the intention, it’s just the devil is in the policy detail. We all want claims settled promptly and correctly.

 

Wrap up: Attempts to make policies clearer add to confusion. Indemnity policies have strict timescales for reporting claims or circumstances. Guidance on what a circumstance is should be sought before a policy expires, ie. before the renewal date.

Top Tip: Uncertainty is not good for anyone. Ask your insurance supplier for clarification of expiry dates, notification deadlines and clarify what “circumstances” are real in your World.

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Categories : Accountants Insurance,Business Insurance,Company Insurance,General Requirements,Legal expenses insurance,Liability Insurance,Uncategorized Tags : , , , , , , , , , , , , ,

Solicitors frustrated by broker tactics

Posted by 23 August, 2010 (0) Comment

Now silly season is upon us, I thought I would update you on what is actually happening in the solicitor’s indemnity market. I know quite a few solicitors and I understand their frustrations. Rather than wax lyrical, I’m going to stick to the good, the bad and the ugly in the current market.

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The good

There are a lot of hard working brokers out there who are satisfied that they have strong enough relationships with their clients and are not using “hard ball” tactics to scare their clients into renewal. You probably have one of those on your side and your terms and conditions will be reasonable.

Ensure you provide full and detailed information when requesting your renewal terms.

The bad

There are two realities to explain. A solicitor received his form, returned it and was given terms within 48 hours. He was also given 7 days (make that 5) to make his mind up. That’s not even legal.

Another practice (with the same supplier) has incorrect “claims” on the practice’s record and the supplier is refusing to correct them. Naturally, they are worried that the terms will be provided late and prove onerous.

The ugly

Some practices (mainly SP’s) have been refused terms by their current insurer already and are filling out forms (more in desperation than hope) whilst considering their future if they cannot find cover. Their supplier should have helped them with the complicated forms.

The reason for declinature is not being made clear or doesn’t add up. One broker refused to tell their client which insurance companies they had approached. That is not service as it leaves the policyholder with no real options.

Wrap up: Some suppliers are great at maintaining relationships and have secured excellent terms. Others are playing hard ball when they do provide terms, taking advantage of the fact that the competition need time to offer an alternative. Some are being obstructive or abandoning clients they cannot easily help.

Top Tip: If an application is declined request a detailed reason before applying elsewhere.

Categories : Business Insurance,Company Insurance,Liability Insurance,Solicitors indemnity,Solicitors insurance Tags : , , , , ,