Small Insurance Brokers such as you might still find on your local high street are under further threat as the banks and building societies collapse the Institute of Insurance Brokers has warned.
The Association of British Insurers is reported to be furious with the way that the nationalisation of the Bradford & Bingley debt has been handled which has left UK Insurance Companies having to foot the bill of £14 billion to cover any losses under the FSA controlled Financial Services Compensation Scheme (FSCS).
If the FSCS has to pay out more than 1.84 billion per year then insurance brokers and intermediaries will be asked to contribute more to the fund, to which they already pay a substantial amount each year in order to trade. This could well lead to more small insurance businesses going under – especially as we have not yet seen the last of the big fallers in the Global finance world.
This weekend the Belgium Government was trying to sort out another rescue package for troubled insurance company Fortis who have already received an 11.2 billion input from the Benelux governments. Fortis incidently had a large affinity scheme with Bradford and Bingley. Two other companies heavily involved with B&B; were Zurich and Norwich Union.
Check your Solicitor has Insurance before you employ them
Online Professional Indemnity Insurance Insurer Indemnia warned today that litigants seeking advice on any matter but in particular housing conveyancing, should check that their Solicitor has adequate Professional Indemnity Cover.
Many Law firms faced a frantic rush last week to try to obtain PI cover renewals before the deadline on October 1st. Check out Workers Compensation Class Codes
A spokeperson said, ” We don’t know at this point in time just how many law firms are out out there without the necessary cover in place and we advise all potential customers to seek confirmation of cover before employing solicitors.”
Over the last six month’s many large UK insurance companies have withdrawn from the professional Indemnity UK market or made their rates so unattatractive as to discourage renewals. Norwich Union has stopped insuring law firms of less than ten partners in an effort to remove the ‘cowboy solicitors’ from their books.
Accelerating this crisis is the credit crunch, that has seen a massive increase in the number of claims against solicitors for negligence particularly in the conveyancing area and civil claims.
“The reason for the increased number of claims is partly due to a savvy public who are quite rightly realising that the can claim under the legal expenses section of their household insurance policies for poor advice and negligent work carried out by cowboy solicitors who in some cases should not be trading”, confirmed Indemnia.
With capacity in the market for PI at its lowest ever, possibly hundreds of solicitors who did not obtain cover last week will by law have to enter the the Industry’s assigned risks pool.
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