My PI insurance is due for renewal in March and I've started to think whether I need to increase the level of indemnity. I had a claim made against me - (nothing to do with business) by one of the no win companies and I was shocked at the fees claimed by the other parties solicitors - ie fees plus 100% win bonus all their clients costs including £2k for an insurance policy they had taken out against losing and compensation, reports by experts etc. Although I disputed the claim and gave reasons why I wasn't liable my insurance company just accepted liability on my behalf and are currently negotiating. This made me think if my PI cover was enough and how do you calculate what you need. I'm only covered for £100k per claim at the minute, I work part time and my fees are around £16k. I looked at my clients and tried to work out what could go wrong and what was the likely cost but factoring solicitors costs, experts reports etc I'm not sure now its enough. I've got quotes for £250k, £500k and £1m the costs would be £400, £500 and £600. I don't want to over insure but I don't want to be exposed.
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A colleague was in a similar boat
He had a PI claim made against him, which he disputed, but the Insurance company told him it was cheaper for them to 'settle' than to dispute it, so he took their advice. When his renewal came around the fee was astronomical, and when he questioned it they said it was because he had had a successful claim made against him and was therefore a bad risk!
PI cover
YOU may do better by joining on associattion/ institute that provides cover as part of the membership ACPA is one such option
Your level of PI cover
Hi Lesley
Vicky here, I work for PolicyBee (we're an insurance broker). Your question is the most common type of question that we get asked! It's such a minefield!
We put together an article which should help you think through what level of cover is right for you... let me know if we could help at all.
http://www.policybee.co.uk/blog/258/what-level-of-professional-indemnity-insurance-cover-do-i-need