What businesses can expect from a hard PI market The reduced appetite and capacity within the insurance industry for PI cover means that those insurers still in the market are now implementing more complex procedures to limit their exposure and reduce the risk of having to pay out costly claim settlements. These can include: • Higher premiums – having to compensate clients for larger and more frequent claims means that many insurers have increased their premiums; • Cover restrictions – there may now be additional restrictions or even exclusions on certain clauses in policy renewals, such as limiting cover, and an increase in the cost of higher levels of cover; • Extra information – businesses should expect to have to supply more detailed information about their operations and supply chain processes. There will be more of an emphasis on risk management and evidence of robust frameworks when it comes to outsourcing, supply chains and third-party risks.
Getting the best PI cover The PI market may be difficult at the moment, but there are a number of ways that businesses can ensure they create the most advantageous situation for themselves: Ensure your risk management processes are robust. Your broker will need to see that you have properly documented risk management frameworks, so make sure you keep records of these practices to show them when it’s time to renew your cover. Specifically, your risk management documentation should highlight:
Robust internal practices and standards to mitigate risks Secure effective contracts. The condition of the PI market means new and renewed contracts need to be watertight. Don’t rush your supplier agreements, take the time to work with contractors and third parties to establish a detailed contractual agreement which clearly outlines the responsibilities for both parties. Remember to keep a record of these contractual practices as part of your risk management process evidence for your insurer. Consult an independent and professional broker. An experienced and authorised broker will be able to guide you through the level of cover and policy options that your organisation needs. Furthermore, they are able to look at the whole of the market (rather than a limited range of choices) to find the most cost effective option for you. Scrutton Bland’s insurance advisers have extensive experience in PI and other business insurances. For more information on insurance solutions for your business contact Tim Mulley at hello@scruttonbland.co.uk or call 0330 058 6559 .
• Evidence of efficient cashflow processes and strong profit margins
• Effective supply chain management. This should include data supporting good relationships with suppliers, and evidence of due diligence relating to supply chain risks and liability agreements
T B C | S C R U T T O N B L A N D | 9 I N S U R A N C E
Made with FlippingBook Learn more on our blog