According to Marsh, the UK’s largest communication and technology firms are continuing to enjoy price reductions on their professional indemnity (PI) insurance during the recession, due to aggressive competition among insurers for their business.
Lisa Hansford-Smith, a Senior Vice President in the Financial and Professional Practice at Marsh, explained: “Increases in professional indemnity insurance rates for communication and technology firms have been predicted for some time. However, these rates increases have not been widespread as of yet.
“Incumbent insurers are trying to increase their rates at renewal but, by shopping around, firms are securing reductions. Incumbent insurers are prepared to lower their prices simply to hold on to business in a very competitive marketplace.
“Nevertheless, more contractual disputes have been recorded this year and these may have an impact on insurance renewals next year, particularly for firms involved in activities such as business process outsourcing, where the risk of contractual disputes is greater.
“There are options available to communication and technology firms wanting to pay less for their PI insurance cover, if they are unable to secure what they believe is an acceptable price from their insurer,” she continued.
“Being able to demonstrate good risk management to insurers is key to securing a competitive rate for PI cover, as well as ensuring that the firm is in a strong position to tackle any upswing in rates in the year ahead.”
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