Professional Indemnity

[Keith]

Advice please.

In public practice (viz. audit certificated, etc.) it is usual and
reasonable to
insure one's activity against legal claim.

Notwithstanding that.... the caveats which now accompany a set of
'audited
accounts' are so bulletproof that the shareholders would need to launch
a
£100million claim to get a sniff of satisfaction.. and without
malfeasance such
claim would fail. Allegedly.

Usually, such claim would be on the basis of error/incompetence/
lack of supervision, et al.

As one who is no longer involved (thankfully) in this chase-the-nugget
contest can I ask on what basis the professional indemnity risk is
currently calculated?

On what basis are the 'professional indemnity' insurance premiums based?

Is it a percentage of turnover? Number of clients? "Newness" to the
profession?

TIA

 

[DoobieDo]

On what basis are the 'professional indemnity' insurance premiums based?

did you bother to ask your insurance company?

didn't think so....

 

[Jonathan Bryce]

Advice please.

In public practice (viz. audit certificated, etc.) it is usual and
reasonable to
insure one's activity against legal claim.

The professional bodies require it.

On what basis are the 'professional indemnity' insurance premiums based?

Is it a percentage of turnover? Number of clients? "Newness" to the
profession?

That and the type of clients you deal with.

 

[Jon Griffey]

Advice please.

In public practice (viz. audit certificated, etc.) it is usual and
reasonable to
insure one's activity against legal claim.

Notwithstanding that.... the caveats which now accompany a set of
'audited
accounts' are so bulletproof that the shareholders would need to
launch a
£100million claim to get a sniff of satisfaction.. and without
malfeasance such
claim would fail. Allegedly.

Usually, such claim would be on the basis of error/incompetence/
lack of supervision, et al.

As one who is no longer involved (thankfully) in this chase-the-nugget
contest can I ask on what basis the professional indemnity risk is
currently calculated?

On what basis are the 'professional indemnity' insurance premiums based?

Is it a percentage of turnover? Number of clients? "Newness" to the
profession?

TIA

I recall that it is roughly based on about 1% of turnover.

If you put on the form the slightest mention of M&A work, they ring the
bell at Lloyds.

Remember that although your terms may be watertight and the claim
spurious you could still waste a lot of money fighting it. Look at the
recent Equitable claim against E&Y that they dropped. It is not just
the negligent who need PI cover.

--
Jon Griffey FCCA CTA
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.hackettgriffey.com

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