You will have seen during the PII renewal this year that the insurance sector are asking more questions than ever in relation to the firms Risk Management Strategy and the procedures for regular file reviews, at least quarterly. This is in direct response to events, such as the Cyber Crime example we have highlighted, and it is no longer unusual to see insurance claims of seven and eight figures.
You should note that if you have ticked the box to confirm that you are conducting regular COFA file reviews and, this is not the case, then this may affect the renewal of your professional indemnity insurance. In the extreme, renewal terms may not be offered.
It is important that you have a formal process in place to monitor, measure and manage risk throughout the year. Any risk assessment needs to be updated at regular intervals and properly documented.
Financial Eye are the Risk Management partner of Hera Indemnity, who work with insurers to ensure they understand the work you have undertaken on risk management. Working in partnership with them, we demonstrated at this year’s PII renewal that a firm who had been refused terms elsewhere by insurers, due mainly to the fact that the other broker didn’t understand their business, were offered an improved premium compared to last year on the basis that they were working closely with Financial Eye.