ABS diary | Tackling professional indemnity cover

Endless telephone calls, emails and lots and lots of paper through the letterbox. Yes, it’s professional indemnity renewal time. And as a result of our new ABS status, I have been questioned endlessly about our PI experience now our business structure has changed.

Now, I have two children, it’s the summer holidays and I work full time, so I was determined to have a couple of weeks off in August with the kids. I made our broker aware of this: we had to close the deal before 20 August.

Before we decided to go ahead with our ABS application I approached him and asked if becoming an ABS would impact our renewal fees. As the general structure of our practice would remain the same he said there should be no impact on the 2012/2013 renewal. I had made it clear in the additional information box in last year’s renewal form that our intention was to become an ABS as soon as we could and I had informed our current insurer when we received our license in March.

There has been a lot of controversy and debate about ABSs since the first applications were possible in January this year so, despite having huge confidence in our broker (I have been dealing with him for five years now) I was expecting our renewal to be more complicated this year. However, he was true to his word. When I received the renewal form it was already set up for prospective and new ABSs which I found refreshing, as my experience so far has made it clear that there is the need for a general catch up with regards to awareness of ABSs in the legal environment. The fact that our current insurer’s forms are so up to date is reassuring.

I submitted our application and within two weeks I had a quote, we haggled (you should always haggle) and I have negotiated and paid for our professional indemnity insurance for 2012/2013. Our new ABS status has had no impact on our renewal fee. In fact we are paying less than we did last year.

Our firm had a difficult experience with regards to PI a number of years ago. At that time the PI renewal was the only area of management I was not dealing with, however, I did pay the premium each year and I could see that despite our claim history we were paying more and more each year. I decided to look into the PI world, learning how to negotiate and sell our firm with regards to risk and which insurers to deal with taking into account the size of our practice and our areas of work and fee income. Since then, I deal with the PI, I have found a broker I respect and not only is our renewal fee a fraction of what it used to be, the premium has been consistent for the past five years.

BERNADETTE’S TIPS FOR PAIN-FREE COVER

• MANAGE YOUR RISK: no complaints means cheaper renewal. A good broker will offer you advice on risk compliance.
• SPEND TIME on your renewal and find out about the PI market so that before you go into negotiations you have an idea what a realistic premium for your firm would be. Be aware that cheapest is not necessarily best, there are always newcomers to the market, but if their rating is not good you will be taking a potentially expensive risk.
• Think seriously about EARLY RENEWAL. Most of the trauma relating to PI renewal comes down to the last minute rush. Leaving your renewal to the last minute is false economy, the early deals are generally better.
• CHOOSE YOUR BROKER wisely. Your broker is your main contact with your insurer and they have an element of control over your final renewal premium. Try not to swap brokers or insurers from year to year; a good relationship with brokers and insurers will save you time and money. Find a broker that specialises in your size and style of practice, they will know the best insurance companies to approach again saving you time and money.
• Only use ONE BROKER at a time, as using several brokers can compromise your quotes from the insurance companies. If the broker does not come up with a renewal fee that you are happy with you can always approach another at a later date (another reason for getting your renewal application in early).