Wise Up Wednesday: Subbies PI Renewal Nightmare
Professional Indemnity Price Hike Signals Subbies PI Nightmare
You may have already been faced with the nightmare of a massive hike in your Professional Indemnity premium. If you haven’t, be prepared, because the nightmare isn’t about to end yet. It’s a Subbies PI renewal nightmare.
The fact of the matter is that the insurance market is undergoing a period of some turbulence and uncertainty, particularly in respect of construction related business. And it’s having a huge impact on the pricing of PI insurance.
One common misconception, which is unfortunately being perpetuated by certain brokers, is that this turbulence in the PI market is all as a result of the Grenfell tragedy. This is not the whole story and not surprisingly it’s provoking the obvious question by those not involved in cladding etc.; ”What has that got to do with us and why are we being penalised for it?”.
The answer is that whilst Grenfell has had a major impact on the UK Professional Indemnity market, with questions being raised regarding regulation and fire safety and the competence of the construction industry in general, there are other factors at play.
Hikes in PI Insurance Premiums are coming.
The most notable factor being the recent Lloyds of London Strategic Review which followed a £2bn loss in 2017. According to some reports, the ‘Design & Construct’ market (which accounts for around 25% of the market), had a loss ratio of 160%. In other words, for every £100 received in premiums, £160 is being paid out.
This is obviously having an impact on the Professional Indemnity market and the overall result is that with harsh market conditions, significant losses, plus more recent high-profile company failings, it is understandable that some insurers have pulled away entirely from writing this class of Professional Indemnity.
Not surprisingly, given the rules of supply and demand, this is having a knock-on effect on the industry in terms of both price and availability of cover.
What Can You Do About It?
So, here are our top tips for obtaining a better quote for your PI cover:
- Give yourselves plenty of time before renewal. Arrange a pre-renewal meeting 3 months ahead of renewal with your broker.
- The PI Insurers will require renewal proposal forms to be completed each year so promptly complete and return to allow your broker as much time as possible to review the market on your behalf.
- Start collating information e.g. full details of contracts where design has been involved. Remember, the information you provide is a representation of your business and the more complete and thorough the better.
- Try not to flood the market by using a number of brokers to obtain insurance quotes. The PI market has a limited number of insurers and they will look to decline quotes if they see the quote presented by a number of brokers.
- It is your specialist broker’s job to convince the insurers that your business is one they want to be involved with, and your broker be able to negotiate with the insurer as to whether there is a real PI risk, or whether you purely need the cover to satisfy a contractual obligation.
- Some insurers who once offered £5million Limits of Indemnity may now only be offering £2million, your broker will need to source alternative insurers to carry a specific limit of indemnity to reach your required limit.
- Consider whether the contract can be challenged early. As soon as possible you should discuss with the Contractor or Client the level of cover that is; “obtainable at reasonable commercial rates”.
- Choose your broker carefully and remember that they are acting as your voice during the renewal process and they should look to support you as much as they can.
- Choose a broker that specialises in your industry and one that is a Chartered Insurance Broker, as the Chartered Insurance mark is indicative of quality and trust in the insurance industry.
As we understand the challenges Specialist Contractors face when looking for, or renewing PI cover, or are required to obtain additional or increased levels of cover, we can help you navigate your way to the best and most affordable protection for your business. and to avoid the Subbies PI Renewal Nightmare.
Together with our service delivery partners Russel Scanlan, we can provide practical advice for all Specialist Contractors regardless of size or expertise.
PI Claims And Design Problems – A Subbies PI Nightmare
We are regularly advising Specialist Contractors in relation to claims made against them in respect of alleged defective design. So if you have a problem please don’t hesitate to get in touch.
If you are involved in a dispute over defects, or design our specialists are on hand to ensure you are not getting the blame for something that isn’t your fault. Contact us for specialist construction advice and ensure your rights are protected.
What We Can Do
Construction disputes of all shapes and sizes are not uncommon due to the complexity of construction – but there are plenty of different ways to settle the matter. Our specialist Construction Contracts Consultants are able to give expert advice, resolve your problem and maximise your recovery.
Adjudication
Our Construction Contracts Consultants have assisted Specialist Contractors in literally hundreds of adjudication cases. We can help you achieve the best result from the adjudication process, or even avoid adjudication altogether. If you have been served a Notice of Adjudication, or would like to issue one yourself, it is crucial that you take the right advice as soon as possible, so please call our construction law specialist team for a free no obligation chat.
Dispute Resolution
Sometimes adjudication is not your best option. Our construction team can advise which method of construction dispute resolution is right for you, whether that be arbitration, mediation, litigation or indeed adjudication. Contact us today for advice on which course of action best fits your case.
Improving The Lives Of Specialist Contractors
Our objective is simple. We want to improve the lives of Specialist Contractors. And we do that by bringing you cost effective resources to help make your life easier and your business more profitable.
By working with our Service Delivery Partners across the country, we bring you professional support in all the important areas of your business.
And, because we only work with Specialist Contractors you can be sure that we know the kind of problems you face, and the solutions that work best, which saves a lot of time, and a lot of money.
So please feel free to give us a call on 01773 712116 or email us on info@streetwisesubbie.com.
And finally, please remember if you need any support please take action sooner rather than later. If you’re not sure what you need, or just want a second opinion, please give us a call on 01773 712116, or send me an email here.
P.S. Please share this post with all your team and all Specialist Contractors that you know, it’s true what they say – there is strength in numbers. Help us to help ALL Specialist Contractors.
Help yourself to avoid this Subbies PI Renewal Nightmare. Read more about insurance on the StreetwiseSubbie web page.
Read more about Professional Indemnity Insurance here.
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