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?