The need in today’s ever changing market with regards to legislation and strict compliance environment for advisers, has seen more PI claims as well as the higher excess structures been implemented in the market. The market has seen an increase in claims as a result of the economic conditions, and client education through the open media highlighting a client’s rights. PI cover is a legal requirement set down by the FSB for all FSP’s, as the need for redress has become more prevalent for the clients protection because of incorrect advice and services. PI is there to indemnify the FSP for any Negligent Act, error or omission. This can be for both “Advice and Intermediary services”, and an indication of the difference is whereby a client instructs an FSP to add a vehicle and the FSP fails to act, should a loss incur, this would be seen as an intermediary service. Should a client receive advice to cancel a policy and the client has had a change in health, this could have an adverse effect on a possible claim, this would fall under advice? What we have found is the excesses imposed by underwriters have been increased dramatically, due to the increased number of claims; this is also referred to as a deductible.
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