Why is the professional indemnity insurance market hardening and who is it affecting?

As the professional indemnity market continues to harden, insurance buyers and brokers are facing growing challenges. In this article, we explore what’s been happening and how we can help you navigate these changes:

What has been happening with the professional indemnity insurance (PII) market?

For well over a decade the UK PII market was a ‘soft’ or buyer’s market. That meant that capacity for PII cover far outweighed demand from businesses and other buyers. As more and more insurers entered the PII market, competition intensified. This was good news for buyers, as insurers cut premiums and extended cover to retain existing business and win new customers.

In the wake of the Grenfell Tower disaster in June 2017, Lloyd’s of London had a reappraisal of profitability in the sector, which led to big changes among insurers underwriting strategies and led to some Insurers being excluded from writing business. After an internal review, many UK insurers questioned their exposure to large PI claims in the construction sector and, as a result, professional indemnity insurers have either:

pulled out of the professional indemnity insurance market altogether
placed restrictions on cover
increased insurance premiums dramatically.

Who is affected by the hardening professional indemnity insurance market?

Originally, these changes were expected only to impact the design and construction sectors.

However, more recently we've seen architects and engineers struggle to secure PII cover and this situation may soon extend to include surveyors.

What should buyers do in light of these changes?

Faced with the conditions of a hardening market, PII buyers must use an insurance broker that can guide them expertly through the insurance process, check that premiums are fair and make sure that the type of PII cover they are offered is right for their needs.

CLEAR has a dedicated professional indemnity team with decades of experience, knowledge and contacts throughout the market. They can help by providing a free assessment of your existing insurance programme to ensure that:

your current insurance programme covers the key risks you face
your current insurance programme is placed with the most suitable insurers and for the most realistic price.

Matthew Harvey

020 7280 3495

Email Matthew

Stewart Ruffles

020 7280 3479

Email Stewart