More than 40 per cent of advisers saw their professional indemnity insurance bills increase at their most recent renewal, a new survey suggests.
In a poll of 250 advisers conducted for Money Marketing by Schroders, just five per cent reported finding a cheaper deal the last time they renewed their cover.
Just over 60 per cent of advisers surveyed said they thought PI was too expensive for advisers, while only one of the 220 advisers to respond to the question said it was too cheap.
38 per cent rated the cost of cover as ‘about right’.
Only eight per cent of advisers reported having a PI renewal period longer than 24 months. Half had renewal periods lasting less than a year.
The vast majority, 88 per cent, said they had seen no increase or decrease in their renewal length over the last five years however.
Just 10 per cent said PI should cover unregulated investments. 42 per cent said unregulated investments should be excluded and 45 per cent said they remained unsure.
PI was thrust back into the spotlight in light of the FCA’s recent review of Financial Services Compensation Scheme funding. The regulator had sounded out ideas such as introducing mandatory terms on policies, limits on excesses and enforced run-off cover, but stopped short of proposing such measures in the end.
New rules will be introduced to try to ensure PI pays out in a higher proportion cases where the FSCS is involved to reduce the burden on the lifeboat fund.