Professional indemnity premiums for accountants increase
In particular, firms who have been involved with advising clients on tax mitigation schemes are now coming under close scrutiny from professional indemnity insurers who are now looking very carefully at their exposure.
It is fair to say that HMRC will be investigating these schemes at least for the next few years – so the risk presented to professional indemnity insurers is viewed as a long term proposition, and insurers will continue to constantly review and carefully monitor any developments in this area.
Bluefin’s Executive Director, Paul Gillett, says: “For some firms the result has been an increase in premiums but for others the problem has been greater. In the last few months the number of firms having to consider entering the ICAEW Assigned Risks Pool (ARP) has increased. Whereas previously it may have been the last resort for accountants with terrible claims records and poor follow up risk management, we are now seeing established well-run firms potentially having to rely on the ARP to keep trading, as a result of perceived exposures to tax schemes and the like”.
Paul advises: “To maximise your firm’s chances of obtaining competitive PI cover, seek training and guidance from your brokers and lawyers. If you have had claims issues in the past, provide evidence that you have learned from them and implemented appropriate measures to ensure they don’t recur”.
“Ask your broker to analyse the state of the insurance market and the best approach for renewal, including feedback on how insurers view your business and the risks it faces.”