I am a semi-retired FCA with a 30 ysr+ claims-free PI record and very minimal fee income. Having been asked to conduct (in South Africa) some very basic pure accounting/reconciliation work for an international charity (with a duration of 10 days), my existing (and well known) PI broker was contacted to advise of this situation. Their response was to indicate that my PI premium would be increased by an immediate adjustment to 3.5 times its current level (despite being 9 months into my existing policy!). That increase in the premium equates to 25% of the agreed, and already discounted, fee-income! Have other accountants experienced any similar situation with minor (low-risk) variations to their existing policies resulting in extortionate and unjustified extra costs?
I had previously undertaken similar charitable work worldwide (excl. US) for many years without any effect upon premiums and in the insurer’s full knowledge. My immediate thought was to cancel the PI policy and take out a new one with another insurer, thereby providing cover for a year rather than the 3 remaining months in case any such work should recur. Previous insurers have not been so draconian in their view but I was told that I could not cancel an existing policy and this makes no sense at all to me. Is that right? Surely this would be a restrictive practice with no logic to it, as my current insurer’s risk would terminate upon its cancellation. I don’t expect a refund of a premium! To compound the problem I was informed that my existing insurer will not be offering to renew any accountants’ PI policies at their expiry as they have now “dropped out of the game”, so I will need a new insurer anyway in 3 months.
Any comments or suggestions to deal with this matter would be very welcome. Thank you.