Tenet Group claims professional indemnity Insurance set to skyrocket

According to recent predictions made by the Tenet Group, PI insurance premiums are set to rise stratospherically in the near future due to the lack of regulated entities in the insurance industry.

Tenet continued, stating that insurers have been feeling recent pressure with both an increase in the incidences of fraud and an increasingly volatile market, especially in regards to mortgages, which have resulted in claim values rising by 40 per cent.

Intermediary claims have also become a key factor, further increasing the financial pressure being experienced by economic advisers, predicted Tenet.

Keith Richards, group distribution and development director for Tenet, commented that smaller IFA firms and mortgage advisers are continuing to face more and harsher criticism than they have in years past, pointing out that any business entities either renewing or taking out professional liability insurance coverage should keep in mind that risk tightening could be a distinct possibility.

Mr Richards continued, stating that the impact financially need not be only limited to the realm of increased yearly premiums, but could also lead to larger issues such as specific exclusions in policies and an increase in excesses.

Mr Richards warned that any firms taking out a business liability insurance policy must make themselves completely aware of any of the obligations that policy entails, since it’s in the best interest of insurers to deny or avoid paying on any claims made to them.  If businesses find that they have a compromise in their coverage, they may not have sufficient capital to meet any liabilities brought up by a claim, he continued.

Mr Richards concluded his statement by saying that insurance underwriters are not only  fleeing markets where they are encountering an unprofitable climate but also being much more selective on any new business, cautioning advisers to review their policy coverage comprehensively.

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