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Vantage Insurance Brokers has emphasised the need for careful selection of an insurance broker when Jersey businesses are arranging their Professional Indemnity Insurance (PII) cover.
This follows a press release from the Jersey Financial Services Commission (JFSC) raising concerns about the policies being purchased by local firms after discovering examples of punitive policy exclusions and inappropriate insurance cover being arranged.
Vantage has concerns that local businesses may be selecting their insurance broker using the wrong criteria (for example, a personal friend who arranges their car insurance), rather than their experience, expertise and access to insurance markets in this specialist area. Furthermore, many firms are often approached by UK based insurance brokers who may have little or no knowledge of Jersey legislation or the need for a regulated firm’s PII to comply with the requirements set out by the JFSC.
Richard Packman, Vantage CEO, commented:
“PII is a complex insurance area where, arranging the incorrect cover can have catastrophic consequences not only for the professional firm, should it fail, but also for the firm's clients who could be left without any redress or means of compensation.
"Many brokers commoditise this important insurance cover. However, ourr experience has shown that a “one size fits all” approach can be costly. The approach should be to acquire a full understanding of the client’s professional services and its clients before identifying and recommending the insurance cover or insurer that will best serve the risk exposures.
"It is “horses for courses”. Some broking firms are renowned for their competitive car or home insurance quotes, but do they have the knowledge or experience to advice a professional firm on its professional risk exposure."
Background
The JFSC has issued a statement to all Jersey regulated firms in the Investment, Fund Services, Trust Company and General Insurance Business sectors advising them to check their PII cover.
The JFSC has concerns about the suitability of companies’ PII cover and the level of understanding of senior management about the terms of their insurance. The JFSC’s supervision division has identified policy exclusions that seemingly render cover inappropriate.
It quotes Jill Britton, JFSC Director of Supervision, as saying “…PII forms an important part of Jersey’s regulatory regime and we are concerned that some local firms may not give sufficient and appropriate attention to ensuring that they have suitable cover in place, or that they adequately understand the terms of that cover.”
