8th July 2019
If you’re an Architect, Project Manager, Engineer or any Construction Professional you’ll know that Professional Indemnity (PI) Insurance has traditionally been easy enough to find and secure. Premiums have been low for many years with a large number of providers in the market chasing market share rather than profitability. With recent unfortunate events that include the Grenfell tragedy and the collapse of Carillion this buyers’ market has become a much harder place to buy PI – be warned.
Just like the stock market with its ‘bear’ and ‘bull’ markets, the insurance market has its own extremes. A buoyant, or buyer’s market – also known as a soft market – is signified by plentiful capacity lower prices, and broader coverage. However, this competitive marketplace eventually takes its toll on insurers. Premiums reduce, and business becomes unprofitable. This is exacerbated by wide policy wordings. As insurers incur more claims of increasing value, their reserves become depleted. These underwriting losses start to bite and eventually capacity withdraws from the market.
As the number of providers drops, competition lessens. The remaining players can increase premium prices, narrow their terms, and increase excesses. For some distressed risks, they might withdraw coverage altogether. This is the market we now see in PI with some premiums up by as much as 500%.
If you are renewing your PI cover then you may be faced with unwelcome premium hikes and in some cases reduction in policy coverage. Also, be aware cover for Cladding is now under scrutiny so it’s vital you understand what cover you can achieve (if any). In order to find the most appropriate deal it can really help to speak to an established Professional Indemnity Broker as they often have the experience and contacts to get you the right cover and price. If you would like to discuss your options with Venture, then please call 0117 325 0640 and speak to Danny Shore.