PII Insurance-

Pjr51

Has anyone had a QAD visit from an ICAEW reviewer and all went well. The only query was my Pii Insurance with Hiscox! The cover level was ok, but my legal defence expenses was capped at £100K per claim- I was told by the reviewer that this should by unlimited as per Schedule 2 of Pii regulations. I went to Hiscox, and was told unlimited was unherd of and you will find most insurers have a cap. Ok, i went to AAT and given a list of approive insurers. Applied for a quote with PI direct, who say on there website that they insurance 1/3rd of AAT Members- but they couldnt quote for unlimited legal defence costs! has any other MIP come accross this? Check your PII cover to see if this is the case- does this mean 1 3rd of all AAT's with PI direct are not covered! Would be interested to see some feed back on this and if anyone else has faced similar issues.

Guest

Just checked mine and is capped at £100k for legal costs (with PI Direct), however cannot readily see where any regulations say it should be unlimited. Have you got a link to this as I cannot understand why legal costs should be unlimited, whereas actual PI can be capped?

Pjr51

[h=1]Schedule 2[/h] Professional Indemnity Insurance (PII)

1. The member must be able to meet all claims.
2. In this schedule 'the firm' means:
   1. the member themselves (if a sole trader)
   2. a partnership (including LLP) to which the member belongs or a limited company through which the member is trading.
3. In this schedule gross fee income is based on the accounting year immediately preceding the start of the policy.
4. To satisfy these regulations the firm must be covered, whether as policyholder or otherwise, by a policy of insurance providing full civil liability cover for claims arising from the provision of services. The policy must be ‘any one claim’, include unlimited legal defence costs and be fully retroactive.The minimum level of cover a firm must have must be the greatest of:
   1. For sole traders:
      1. 2.5 times the firm’s gross fee income
      2. £50,000.
   2. For partnerships:
      1. 2.5 times the firm’s gross fee income
      2. £100,000.
   3. For limited companies:
      1. 2.5 times the firm’s gross fee income
      2. £100,000.
   4. If the gross fee income of the firm is greater than £400,000, the maximum level of PII cover required by these regulations is £1,000,000. However, firms should always consider whether this is sufficient for their situation.
5. Any self-insured excess must not exceed, in annual aggregate:
   1. in the case of a sole trader, £10,000
   2. in the case of a partnership, £10,000 per partner
   3. in the case of a limited company, £10,000 per director.
6. Members registered or licensed to carry out Limited Assura

Pjr51

Go to AAT website- my aat log in and search for Schedule 2 - for PII- above is the rules- i was told this by QAD visit- Have been in touch with AAT who are looking into the rules- Pi direct tell me one claim per £100K cap- something is not right somewhere- I am glad its not just me- Can anyone reading this ar AAT qualify this rule. Thanks

Guest

Interesting! Let us know what they reply. Cannot see the logic in that though and I'm pretty sure up until this year I've had to let AAT have a copy of my PI cover and they have never come back to me re this?