The policy, which provides availability of cover for four years, will offer Tenet’s network members PI cover with low excesses, starting at only £5,000 for the most part combined with premiums which could be as low as 2% of turnover. In addition there are no products excluded such as Split Caps and Precipice bonds.
Tenet is showing how networks can support IFAs by delivering a ground-breaking Professional Indemnity insurance programme to members of its M&E and Interdependence networks at a time when many directly authorised firms are failing to get cover or are having to accept non-compliant or expensive terms with high excesses.
Conventional Professional Indemnity cover is very restricted, with less than a handful of insurers prepared to support one in 10 applications. Tenet felt it necessary to move away from this model and create a new and innovative long-term programme which met its legal and regulatory obligations.
The Tenet Professional Indemnity Insurance Programme uses a blend of conventional and alternative insurance techniques to provide cover for typical day-to-day claims and exceptional losses.
Geoffrey Clarkson, Director of Tenet says: “The Tenet programme, is unique. It has been created under difficult and challenging times for business professionals seeking Professional Indemnity cover, especially IFAs. Only a well established and credible business like Tenet could offer both comprehensive cover and competitive rates. With insurers moving out of the professional indemnity arena, current demand is outstripping supply and as a result, some firms are finding it impossible to get cover on any terms.
Tenet believes uncertainty of cover is one of the greatest concerns for IFAs and have therefore made availability of cover for four years one of the main features of its programme, something other firms are not able to offer. This leaves members free to concentrate on their business without having to worry about the existence of Professional Indemnity cover in future years.
Premiums start at around two percent and will average at less than five per cent over the period for those members with good claims records, a very attractive and competitive rate at a time when premiums for all are rising dramatically. Member firms with a long association with the group, a good claims track record and a lower risk product mix will attract the best premium rates. Excesses for most claims start at £5,000 and no type of product or line of business is specifically excluded. Tenet has also structured its programme in such a way that members with no claims could see a significant reduction in premiums in future years.“
Nick Kelly, Managing Director of Regulated Networks at Tenet adds: “At Tenet, we understand the pressures our members are working under. Our programme is both competitive and comprehensive and offers much better cover than many policies being offered to directly authorised IFAs. Too many IFA’s are being persuaded to join organisations that offer PII with no ability to provide cover for their previous business, and from insurers with limited capacity or sustainability. In our view they have virtually no cover at all. Tenet’s cover is provided by high quality insurers with excellent credit ratings ensuring members’ claims are met. In addition, the policy can be extended to cover mortgages and general insurance business, in advance of FSA regulation.”
The EU Mediation Directive, which comes into force in January 2004, reinforces the FSA’s rules in requiring all independent financial advisers (IFAs) to have Professional Indemnity cover.