Hopefully by now, your current insurance broker will have been made you aware of the serious upheaval in the Professional Indemnity Insurance (PII) market.
September 10, 2019
If not, it’s imperative you understand these and discuss your renewal with a specialist broker that does in plenty of time before the renewal date. From significantly increased renewal premiums, higher excesses and even restricted cover, our Construction team have seen a complete overhaul of the UK PII market.
So, what’s happened?
Since mid to late 2018 but more so in the early part of 2019, insurance companies providing PII have had to increase premiums significantly & reduce cover for a high number of clients buying Design & Construct (D&C) PII in the Construction & Demolition sectors.
Other insurers have simply ceased underwriting Construction based PII, compounding the situation for thousands of clients like you.
This occurred due to years of unsustainable pricing, coupled with a significant increase in the level of claims that insurers were handling.
Other key factors include high profile issues that you will have seen in the press: –
- Financial stability & supply chain issues – Carillion – The current economic climate, Brexit and the potential for a recession & insolvencies leave insurers nervous;
- Concerns about cladding & fire safety – Grenfell – Grenfell was the nail in the coffin in this area;
- Tough Contracting Environment – There continues to be a drop in the margins that some contractors are happy to work for, resulting in negligible profit and potentially onerous contractual terms being accepted (retentions and the like)
- Vicarious Liability – Insurers are less likely to be able to subrogate claims back to the ‘guilty’ party (acts of others) due to the supply chain being long and complex;
This can ultimately only end one way!
So, what are insurance companies looking to do to remedy the above?
In addition to increased premiums, clients are also being hit with more onerous policy cover & limitations: –
- Higher policy excesses being imposed
- Any One Claim Limits reduced to Aggregate Limits
- Defence costs included in the limits being provided
- Additional endorsements limiting cover in high risk areas
- Insurers have ceased underwriting meaning less capacity is available, which in turn increases costs;
So, how can Square Mile Broking help you?
Unless you are comfortable that your broker understands the PII market and is a true specialist Construction Broker, we will be able to provide simple & straightforward: –
- Guidance on the current coverage and how to present your renewal information to obtain the most favourable terms;
- Access to all Lloyd’s of London & London Market insurers
- Alternative quotations to ensure you have the most cost-effective solution
- Construction specialist & awards winning customer service
- Award winning In-house claims service
Square Mile Broking is a specialist award winning Construction Insurance Broker placing Professional Indemnity for a wide variety of clients in your sector.
We deliver market leading customer service to our clients and have been awarded the Investors in Customers (IIC) best ever result for a UK Insurance Broker in both 2016 & 2018 for our Customer Service.
Our specialist in-house claims team have recently secured Insurance Broker of the Year at the 2019 British Claims Awards.
Contact us if you would like a discreet conversation, email or meeting to discuss how we can help you with a review of your PII or any of your insurances. We are more often than not able to reduce your costs whilst ensuring you have the widest cover available.