Honister Capital goes bust over PII failure
Colman Moher, chief executive at Honister Capital, is said to have blamed the crippling cost of PII for the firms failure to keep trading.
He said: "We communicated last year that the costs to advisory firms to secure professional indemnity insurance had increased massively, and although we were able to secure this last year it had a detrimental effect on our trading performance over the course of 2011/12.
"You will also be aware from recent press coverage and comments from our competitors that the cost of PII in this sector has increased year on year and renewal of this cover is absolutely essential for us to trade.
"Due to the history of some of our businesses, we have been exposed to large claims relating to business written by advisers who have long since left us and this has severely affected the premiums we have had to pay.
"The extent of policy excesses and exclusions has compounded this. It is with great regret and sadness that we have to inform you that we have been unable to obtain PII cover for the coming year which means that Honister Capital Limited and its subsidiaries will be unable to trade.
"The business has had no choice but to enter into administration and consequently you are no longer able to write new business with immediate effect.
"We know that this is an extremely difficult situation for you and we cannot express strongly enough our regret. Despite considerable efforts on our part to resolve this we have been unable to prevent this situation from arising."