Changes made to the ICAEW's professional indemnity insurance minimum terms
Accountants that are members of the Institute of Chartered Accountants of England and Wales are obliged to have professional indemnity insurance written on specific minimum terms. As of the 01 September 2010 these minimum requirements will be amended.
The most prominent changes to note are as follows:
•The definition of ‘claim’ has been changed to include oral as well as written claims
•There will be an introduction of a 7 day period after the end of a policy to notify a claim however notification of a circumstance must still be provided as soon as practicable and within the policy period
•For claims arising out of financial services work (as defined by the FSA) the policy excess will now be applicable to defence costs
•Insurers are no longer able to avoid the policy based on one partner making a fraudulent claim. There will be no cover in place for the fraudulent partner but cover will remain in place for all other partners
•If there is an allegation of fraud against the insured the insurers must defend the claim until either the fraud is admitted by the firm or it has been proven in court, the insurers can however seek reimbursement on any defence costs paid on behalf of the insured who has committed or condoned the fraud
•If there is any dispute between current insurers and previous insurers about who deals with a claim, the current insurer must deal with it until the dispute is resolved
•Insurers must pay any claim in full, and not deduct any monies that they may be owed by the insured
•Insurers liability is no longer reduced by the existence of any other insurance, the insurer must still pay the claim in full and can seek contribution from the other insurer afterwards
As the exclusively appointed professional indemnity insurance broker to the ICAEW, our scheme wording already incorporates the majority of these changes and will be updated with the remaining changes to ensure full compliance. Similarly, the wordings used by our in-house underwriting facility, Epic Underwriting, will also be amended to meet the requirements.
Over the coming weeks Bluefin will be speaking to all participating insurers to ensure that they have noted the amendments to the minimum terms and updated their wordings accordingly.