Is it just me, or is professional indemnity insurance run-off a rip-off? If I have been practising for a year, I need insurance for a year. If I drive a car for a year, I get insurance for a year. If something happens during that year, I am covered. That does not mean a claim has to be brought to court in that year. Something relevant happening must be on the road, not in court. Why is the same not true of PII?
Why do the standard terms which PI insurers have to offer not simply require them to include run-off with no further premium? There is nothing inequitable in this. On the contrary, the current system is inequitable. The likelihood is that no claim will ever be issued for PI in the first year of practice. Even if something happens within that year, the claim is likely to come later. Does that mean that insurers do not take a premium in that year? Of course not, so why should they carry on taking a premium after the potential for the basis of a claim to arise has stopped? Don’t blame the insurers. They are commercial enterprises and need to make money. Blame the regulator.
Alexander May, partner and solicitor-advocate, BladeLaw, Gloucester
