Increase in company insolvencies will push up premiums
Most mid-tier accounting firms are set to see the cost of professional indemnity cover rise by up to 15% as the economic downturn fuels legal action against the profession, broker First City has warned.
Accountancy Age reported the firm’s Victor Knope saying rising insolvencies were causing the rise. “A firm with revenues of £30m paying £850,000 for cover will see a rise of 10-15%,” he said.
Practices in the ‘group A’ insurance bracket the 35 firms below the top six will find themselves with bigger premiums this year, he added.
First City is a professional indemnity adviser to accountancy bodies the ICAEW and ACCA.
Gary Head, professions underwriting director at Hiscox UK, was also quoted
As saying: “The rates for accountancy firms have got to unsustainably low levels and below the levels the market can sustain with the increase in claims.”
