Risk management

Rules for renewal

While the renewal season may seem a few months away, our experience shows that now is the time to start thinking about how you are going to go about renewing your professional indemnity insurance (PII).

Insurers want to be convinced that your practice's risk is an attractive business proposition.

Therefore, make the effort to ensure that your renewal form portrays your firm in the best possible light.

Listed below are our tips to help you survive the renewal process:

- Ensure that all the decision makers within your firm are available to make the key business decisions.

For example, you will need to decide whether your firm needs any additional insurance, such as deductible infill insurance, excess layer insurance or additional run-off protection before you approach an insurer.

- Utilise the services of a specialist PII broker.

The broker will help a practice receive the most favourable quote.

- Do not 'flood' the market by asking four or five brokers to obtain quotations.

There are a finite number of insurers, and they do not respond well to multiple applications.

Select a well-resourced PII broker who will market your risk responsibly.

- Make sure your proposal is presented clearly, without any obvious gaps.

- Ensure that you are keeping a comprehensive and up-to-date synopsis of claims notified since 1 September 2001, so that these can be explained quickly and clearly to any prospective insurer.

- Remember to read and to answer all questions on the PII proposal form.

Even if you think that some of the questions are not relevant, underwriters will consider them to be important.

- Ensure that all employees and partners within the firm have notified any circumstances and claims that might have arisen since 1 September 2001.

These relate to your current insurance and everything should be formally notified within the specified time frame against the current policy, so that there is no confusion if you change insurer.

- When answering all the questions on the PII proposal form, attach any information where requested and complete any questionnaires.

If you have had a risk management survey carried out, then attach a copy of this too.

- Introduce claims management procedures into your practice.

A number of claims for simple matters, such as missed diary dates, can easily be eliminated by implementing risk management procedures.

Insurers will be looking for risk controls, and fewer claims now may well lead to the potential of lower premiums in the future.

- You should send three additional photocopies of your submission.

- Start the renewal process early to give your insurer time to consider your case.

There is no chance of reduced premiums being available for late applications and you run the risk that your practice will be uninsured come 1 September.

- Obtain the full details of any quote in writing, and pay special attention to any subjectivities.

This column was prepared by AFP Consulting, a division of Alexander Forbes Risk Services UK