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PI Insurance ….Myth or Reality?
Test 12 PI Myths Myth Confirmed, Myth Plausible, or
Myth Busted Time for Q & A
MYTH 1
The client’s lawyer says that the PI cover will make good
any client loss. The adviser is fine then?
MYTH 2
Only defence costs are covered by your PI policy.
MYTH 3
Your best to deal with the unhappy client a.s.a.p. and don’t involve the PI
insurer.
MYTH 4
It’s only a claim when they sue or lodge a formal complaint
with a tribunal or professional body.
MYTH 5
If you don’t do investment work there’s no need for
PI cover.
MythPlausible….
MYTH 6
A members scheme for PI cover with a cap has no effect on an individual
member.
MYTH 7
If all you do is investment advice and your insurer knows
that is all you do, you are covered for it.
MYTH 8
You are covered for anything if it is not you, but your staff, who are
negligent.
MYTH
CONFIRMED!!
MYTH 9
You can actually get covered for investment
advice…..
MYTH
CONFIRMED!!
MYTH 10
Being well qualified and having good business practice makes you a lower PI risk, and
gets you a better price for cover.
MythPlausible….
MYTH 11
There are no issues if you retire. Your previous PI
policies cover the time when you were giving advice.
MYTH 12
The average claim cost is so low that it is best to
self insure.
MythPlausible….
0
Professional Indemnity Claims Trends
$5,000 (mid term)
-75%(mid term)
+53% (mid term)
2009
$8,000-82%-132%2008
$30,000+530%+84%2007
$26,000+347%+44%2006
$5,000+26%+8%2005
Average CostAmounts Paid% Average notifications
Year
Questions?