The reality for smaller firms is that the underwriter will only have 15-20 minutes to review your professional indemnity insurance submission at renewal. So, for firms that want to achieve the best terms, the question of how they present their PII risk is of vital importance.
The key to presenting your risk is to make underwriters’ lives as easy as possible, ensuring that they are spending time reviewing your risk, rather than searching for or clarifying information. Underwriters calculate premiums based on the information in the proposal form. The proposal form is designed not only to provide underwriters with the risk information required to offer their best terms, but also to make their job as easy as possible in terms of finding information. It sounds simple, but the best advice is to answer questions as they have been asked. One of the most important is in relation to work-type exposure. While an insurer’s categorisation may not reflect your own practice accounting categorisation, it is important to complete this question as asked, rather than simply refer to a separate sheet and expect the underwriter to transpose it into their rating methodology. Given time pressure, many will not. Finally, complete the proposal form electronically. It is clearer and looks more professional.
For firms which have had claims, an up-to-date confirmed claims experience will be required. This is available from your broker or insurer and you should submit it with your proposal form. By up-to-date, this means within three months of the date the proposal form is submitted. If you have had claims with a value of £25,000 or more, then it is advisable to provide a brief narrative of the claim and any remedial action taken.
Many firms will be offered early renewal. While these deals can be attractive, it is important to recognise that if you want to receive an alternative quotation you will need to complete a full proposal form.
There is no evidence to suggest that leaving the submission of your proposal form to September will result in a better deal. Instead, it is advisable to complete your proposal form early and submit during July and early August. This will give your broker time to source alternative terms if required.
Finally, it is worth remembering that it is your broker who presents your proposal form and ‘sells’ your risk to the underwriter. While solicitors’ PII is treated by many as a commodity, it is viewed as a high-risk class of business by insurers. Therefore, make sure your broker is a specialist with access to multiple insurers and the resources to present your risk.
Mark Carver is head of UK and international professional and financial risks at Miller Insurance