Opinion: Who would believe it? When unrated is “good”
Roger Flaxman finds lessons for brokers in a fascinating £100,000 case where a firm faced litigation for not using unrated insurers. A casual chat between two solicitors at a local trades Christmas lunch resulted in an extraordinary windfall for one of them. Each represented small practices with similar turnovers of just under £1m. Comparing the cost of their professional indemnity (PI) insurance firm A found they were paying nearly four times the premium paid by firm B.
It rather spoiled the lunch for A and on reflection of this alarming discovery A decided to call his broker to account for the difference.
Litigation against the broker followed which resulted in an out of court settlement of nearly £100,000 to A’s firm, representing “overpayment” of premiums for three consecutive years.