Managing director Neil Pointon says PI cover is set at €1.5m which is now around £1.3m, compared to £1.15m 12 months ago due to a weaker exchange rate.
He says most underwriters have been absorbing the increased cost due to a soft market, but he predicts that will change as the market hardens.
Pointon says: “I do expect to see some hardening in the market and underwriters may start to pass the increased costs onto advisers.”
Informed Choice managing director Nick Bamford says he agrees that the falling value of the pound will have an impact on premiums.
He says: “It’s a shame to hear that prices are going to increase, especially during a recession, but unfortunately it’s an unavoidable consequence of the exchange rate.”
The FSA says it will not get involved in the pricing of PI cover.
A spokesman says: “The FSA takes UK professional indemnity insurance requirements from the EU directive, which is set in Euros. The underwriters’ decision on how to price PI will be a matter for the insurance companies.”