Indemnity Insurance huge increase

[Alext333]

Hi All,

Just phoned Hiscox to get a copy of our insurance certificate. They wanted to do an account review to see if our policy was up-to-date. They asked a question I'm sure we have never been asked before, and it was under which geographical jurisdiction are our contracts. We probably do 45% of our work in the USA, so we informed them of this and they double our policy. So an extra £1200 and thats with a 10% discount.

Is this a new thing, because I'm sure we have never been asked this before. Do all insurance companies to it? Or should I shop around?

Any advice would be great, its a huge increase for a small company like ours. Thanks

 

[fisicx]

@Frank the Insurance guy will be best placed to answer this but it’s likely you were underpaying and an additional £1200 is the correct figure.

Everyone appears to be suffering considerable increases.

 

[Frank the Insurance guy]

Hi @Alext333

Sales/services into USA (Or Canada) are real issues when looking at Professional Indemnity Insurance.

Insurers will apply higher rates/premiums once you have any clients or sales into the US. Some Insurers will actually walk away and refuse to provide you with cover or a quote, others may only quote if this side of your business is under 20-25%!

The reason is a simple one - if you are taken to court in the US, their litigation is so much more involved and costly than in the UK and elsewhere.

Even for a small business, with 45% of turnover coming from the US, a premium of under £2500 a year sounds good to me!

 

[Frank Wessely]

Any work carried out in the US/Canada or for clients in that area will result in an increase in your PI premium. When the policy is due for renewal you are likely to find that quotes are higher than before.

It is a good thing that this has been disclosed now as had it come out following a claim being made, insurers would have likely refused to pay out due to non - disclosure.

I am asked this question at every renewal.

Thanks.

 

[Alext333]

Thanks for the replies. Is this a new thing because I'm sure we have never been asked this question before?

 

[fisicx]

Thanks for the replies. Is this a new thing because I'm sure we have never been asked this question before?

Depends on the underwriter. It’s possible they have realised the increased risk and are asking everyone. I’ve checked with my insurer and it’s something they now ask. And not just the USA. There are a number of countries they are concerned about.

 

[Frank the Insurance guy]

Thanks for the replies. Is this a new thing because I'm sure we have never been asked this question before?

Not new at all. USA had been an issue for as long as I can remember.

In the past, some insurers have not asked, but just made sure it was excluded in the policy, so no need to know!

You may find your previous policy was limited to UK jurisdiction only, or specifically excluded work for US clients. Especially the case if buying cheap online policies!

 

[DontAsk]

I always declare the proportion of sales to the US but I have never been asked about contract jurisdiction, but this is for sales, not "work".

 

[xjr13m]

I would say the new premium sounds 'reasonable' for PI coverage in the US. We only have liability insurance but our broker always asks for a geographical and industry breakdown, for example we do work in chemical plants which is considered a higher risk. Would be worth talking to a local commercial broker though, much better than going direct to a big name insurer in our experience.