RSA Insurance pulls out of Professional Indemnity Insurance for Irish Accountants
RSA have recently announced that they will not be renewing
Professional Indemnity insurance for a number of professions one of
which is Accountants.
Two questions immediately present themselves, why have RSA pulled
out of this market and What re the implications to you as an
Accountant in Ireland?
Over the last number of years a number of new Insurers have
entered the Irish market, these new entrants have created a high
level of competition for a very small market which has resulted in
considerably low premiums for Accountants. In addition the
percentage of claims notified to PI Insurers has risen dramatically
especially from Solicitors, Architects and Engineers. Solicitor's
premiums have increased dramatically to counteract the volume of
claims; accountant's premiums have remained static.
The costs associated to a claim do not just stop with the amount
awarded to the claimant. Increased costs around defence of
spurious claims impacts negatively premium amounts plus there has
been number of high profile cases involving investments, Life and
Pensions work. The general consensus within the insurance
market is that claims will continue to rise for the foreseeable
future.
Overall the feeling is the PI Insurers will become very selective
regarding the type of accountant they wish to insure. Accountants
with high risk profiles may find it difficult to obtain premiums at
levels previously enjoyed.
It is therefore vitally important that your broker
understands your practice. It is your broker's prerogative to
provide submissions to Insurers which give the best view of your
practice. Sometimes the historic proposal form may not be enough
and supplying CV's of principals etc can assist Insurers in getting
a more rounded view and ultimately a more competitive premium. It
can also be of great benefit to Insurers to show any remedial
measures should a claim be on the policy.
So ensure that your broker reviews your business every year.
Ensure that your broker has the ability to search the market
to identify a policy and premium that will suit your current needs.
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