Don't let your renewal proposal let you down

The professional indemnity insurance (PII) renewal and the completion of proposal forms can be perceived as a major headache and create mental blocks for the person responsible, which explains why some firms pass the responsibility from person to person each year. The implementation of the Insurance Act 2015 and its enhanced disclosure requirements might be perceived as a further complication to the
application process.

The Act places a duty on applicants to make a fair presentation of the risk, including disclosure of all material information (e.g. information that would influence an insurer in deciding whether a risk is acceptable and, if so, the premium and terms and conditions to be applied). In addition, the Act sets out
whose knowledge of material information you must disclose.

As an organisation, you will be deemed to know all material information that is known to your senior management and those responsible for arranging your insurance, and which should reasonably have been revealed by a reasonable search. Your search will need to include information which is held by other persons, such as your agents, outside advisers (including lawyers and consultants), suppliers and service providers, and so on, as well as any change in the material information detailed in the proposal form completed for
your last renewal.

Insurer relationship

Through the proposal form completion process, however complex you might feel it is, there's one thing you should bear in mind. For many, the proposal form is the only opportunity you will have to showcase your firm's credentials to insurers, establish a good exchange of information and views, and ensure that your insurer really understands your firm. Don't miss this important opportunity to build on your relationship with your insurer.

Incomplete and late proposal forms still represent a major problem when preparing comprehensive and compelling presentations to participating insurers. Don't let your firm become complacent.

There is, undoubtedly, adequate insurance capacity to cater for the solicitors' market at present, comprising both experienced and relatively inexperienced underwriters across a range of financial strengths. As with any commodity, the most desirable products are always the most sought after. This is no different for PII, where highly rated, experienced underwriters can, and do, expect the most comprehensive and accurate insurance proposals from firms, buoyed by the demand for their insurance product.

Accurate and timely forms

Failing to prepare accurate and timely renewal proposals might put your firm in the unenviable position where it has to compromise on the quality of its PII carrier because proposal documentation has been hastily or shoddily compiled. This compromise might be a step
too far for certain clients, so don't be caught out - follow these simple rules:

• Get your proposal form completed on time: This should be with us as early as possible. Late proposal forms hint that, if a deadline as important as the PII renewal is missed, then other deadlines might also be missed;

• Write legibly: Illegible handwriting might suggest that handwritten information held on your case files might be unintelligible, resulting in file information being incomplete, and key dates being missed;

• Don't leave questions unanswered: Missing answers might imply that forms filled in on behalf of your clients are incomplete, resulting in financial loss;

• Don't forget to provide additional information: Missing information might raise concerns that not all documents will be filed on behalf of your clients;

• Make sure your gross fee income adds up to 100 per cent and provide complete financial information: Errors in compiling financial information for the firm might raise questions about the financial management
  of the firm and its exposure
  to fraud;

• Provide complete claims information: Incomplete claims information might imply that something is being hidden; and

• Make sure you sign and date the proposal form: Failing to do so might insinuate that contracts are not signed on behalf of your clients, rendering them invalid. SJ

 

 

Ryan Senior is executive director of the professional services group at Aon Risk Solutions