The firm says that in light of the recent closure of firms such as Trustguard Credit Services and in the prevailing market conditions, it is vital that ARs’ PI protection is up-to-date.
Neil Pointon, chief executive officer of PYV, says: “We’ve had enquiries about PI from a number of ARs and brokers whose networks or brokerages have closed down.
“Even those that feel secure at the moment should be aware of their PI cover and its limitations, as some companies do not cover excesses as a result of claims.”
Pointon says brokers and ARs should get legal advice to define their liabilities. He adds that input from solicitors could also help them find the best product if they want to strike out on their own.
Pointon says brokers should check their contracts to see what their liabilities are for past actions and whether defunct firms maintain a run-off policy or responsibility for business conducted through them.
Pointon adds that the cover is arranged on a claims-made basis, which means that regardless of whether errors occurred while policies were in force, PI needs to be in place to respond if claims are reported to insurers at a later date.
To help brokers, PYV has developed a PI facility that includes compliance, legal defence, dishonesty, accidental damage to documents and cyber liability issues.
Howard Bowes, director of Dorset-based brokerage Harvey Bowes, is a form- er AR of the now de-funct Trustguard.
Following its demise he recently joined another network. When searching for a replacement, Bowes was shocked by the lack of PI protection offered to ARs by some of the networks.
He says that with borrowers becoming increasingly litigious, this is a major concern for the industry.
Bowes adds: “I looked at five networks and they all leave the responsibility not just for excess but for what- ever PI won’t cover to ARs.”