Leading professional indemnity insurers have acted to reassure IFAs that their bills will not rise following the introduction of the PIA Ombudsman Bureau's new £100,000 compensation limit.
The PIA announced the increase, backdated to January 1, last week after over a year of wrangling with PI insurers.
When the increase from £50,000 to £100,000 was first raised, many insurers hinted that they would refuse to cover IFAs for the higher limit.
But PYV has announced that "most" of its existing clients will be given protection up to the new limit with immediate effect at no extra cost. It says discussions are proceeding for all PYV clients to be fully covered.
PYV operations director Neil Pointon says: "As existing policies contain a £50,000 redress limit, many of our clients are worried about the sudden nature of this new exposure.
"Fortunately, we have been able to persuade our main market to respond quickly to allay PIA members' fears."
Alfred Blackmore director Mike Pummell says IFA clients will be similarly protected thanks to the ombudsman clauses in their contracts.
LIBM managing director Tony Howe says IFA clients will be protected. But he warns that if the PIA continues to change or increase the PIA Ombudsman Bureau's terms of reference, support for the systems will collapse and PI insurers will quit the market.
PI insurers remain angry that they were not consulted before the new limit was announced.