Collegiate says IFAs whose professional indemnity insurance waivers expire in January 2005 will find it easier to get PI cover if they accept a sizeable self-insured excess.
The PI firm says this will not pose a problem for adv-isers with waivers in place as they will have already put fairly significant amounts of capital aside to satisfy FSA waiver conditions.
Collegiate says insurers seem keen to help on this basis and points out that a high self-insured excess should make insurers more confident about working with the firm and reduce premiums.
It is working with sole trader Harris Investment Management to find a solution once the firm's waiver runs out in January. Harris says its waiver is valid even if it increases its turnover through acquisition up to £1m a year and it is keen to hear from sole traders or small businesses which are having difficulty getting PI and are interested in amalgamating to take advantage of the waiver.
Principal Alan Harris is also keen to develop a group policy for the insurance mediation directive with six to 12 small firms grouping together to get round the requirements of the directive.
Collegiate marketing and project development director Fergus Chappel says: “Firms with waivershave, by definition, hae been prepared to carry their own risk so we hope that many of them will be open to this idea of buying cover that operates at a higher level.”
Harris says: “Our waiver has been extended but this is a double-edged sword as it is a short-term solution. I would like to hear from sole traders or small businesses interested in becoming part of a group policy arrangement with effect from January 15, 2005.”