Liberty considers ‘baseline premium’ for DB cover

Liberty Specialty Markets is considering a “baseline premium” for defined benefit cover, Money Marketing understands.

The company is thought to be taking a “similar approach” to fellow professional indemnity provider, AmTrust, which Money Marketing recently revealed has imposed case limits for DB transfer advice.

An industry source says Liberty plans to introduce a baseline premium for DB cover and a premium for every case written.

Liberty declined to comment to Money Marketing.

Signpost Financial Planning director Nigel McTear, who uses Liberty as his firm’s PI insurer, says he would not be surprised by the move.

McTear says he has only done one DB transfer in the last 12 months since his last PI renewal, compared with five in the year prior to that.

He says: “I suspect that all ‘thinking advisers’ are treading with great care when it comes to new DB cases.

Are advisers getting a rough deal on PI cover?

“It’s tempting to turn down clients requests just to help de-risk our businesses. Of course, the flip on this is that clients who can benefit from a DB transfer and do understand the risks simply miss out.”

He adds: “The issue for the PI providers and the industry as a whole are those businesses doing volumes of DB transfers often for clients they hardly know and looking for all the world like ‘bucket shops’.”

McTear says at this stage Liberty appear to just “ask extra questions” within the PI renewal process.

Last month, Money Marketing revealed that Liberty is to cease taking on new adviser business covering defined benefits.

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