Professional Indemnity for Start-Up Insurance Brokers in 2021

Travelers Insurer Partner 2 1

Professional Indemnity Insurance (PII) has benefited from soft market conditions for as long as many of us can remember. However, for a variety of reasons the last two years has seen a withdrawal of capacity, which is making even the simplest renewal process a significant challenge.

The recent dramatic change in the PII market for brokers

Every broker wants strong relationships with their partner insurers and when you are starting out it’s tempting to open as many agencies as possible. This may help short term, but in the longer term could result in insurers citing ‘lack of support’ and closing the agency down. It’s better to take your time and form long-lasting partnerships.

Although the number of insurers underwriting insurance broker PII policies was relatively small, it was always a competitive market. In the main, it provided enough alternatives to ensure that reasonable coverage and premiums were achieved. For the reasons stated above, the market had shown signs of constricting in early 2020 and the arrival of the Covid-19 pandemic shortly after caused this to exacerbate even further.

Fear around increased broker claims resulting from the pandemic appear to have forced any wavering insurers out of the market, with significant departures seen in the last few months, For those left writing PII for insurance brokers, many have closed their doors to new business completely. When dealing with renewal cases, they are asking probing questions around business continuity plans in respect of Covid-19. Dependent upon the responses, insurers may look to apply a full or partial Covid-19 exclusion. These exclusions vary and some are particularly wide so it is vital to understand the potential impact on your business before renewing.

How can brokers move forward in 2021

Despite the harsh implications of the hardening PI market, you can help your business obtain adequate cover with this guidance:

  • Communicate with your Pi specialist broker—Make sure you meet with your broker to discuss what level of cover and unique policy features your organisation needs. After all, your broker has the insurance expertise to provide you with the most cost-effective, high-quality cover solutions. Ensuring frequent communication with your broker will help you stay informed, supported and—most importantly—covered during these market conditions.
  • Start the process early—In a hard market, you can’t wait until the last minute to secure quality cover. With this in mind, be sure to engage in your PI policy process as early as possible. Doing so will give you plenty of time to gather any documentation required. In addition, insurers will likely ask more questions than usual before finalising your policy—making it even more vital to get a head start on the process.
  • Invest in risk management—Now more than ever, it’s vital to invest in robust risk management processes.
  • Robust internal practices and standards to mitigate on-site risks – Movo pride themselves with helping start up brokers with the best systems and procedures in order to be efficient and constantly compliant.

Movo Professional Risks have negotiated an exclusive scheme for Movo members that is significantly more competitive than current open market premiums designed for new start-ups.

If you are concerned or have any questions regarding your professional indemnity cover now, or at renewal, please don’t hesitate to contact us to discuss the best options open to you.


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