Top tips: down to business

Professional indemnity

An insurer will take the following management and business factors into
careful consideration when assessing the level of risk that a firm poses:

• Adviser/support staff ratio

• Tail (volume of past business)

• Self-employed staff

• Qualifications/experience of staff

• Compliance

• Specialist support

• Control systems/monitoring

• Business structure

• Research

• Regulatory visits disciplinary record

• Client/adviser ratio

• Claims records/complaints log

Critical issues for getting cover:

• Know who you are dealing with and who they represent.

• Check if your broker deals directly with the PII market, or through another
broker and how much it will cost you.

• Find out what service the broker is offering, for example will they provide

• Find out which insurers can be accessed.

• Check if they are specialists in your sector.

How to make a good application

A good quality application to insurers is important.

Make sure that you provide clear and comprehensive information.

Ensure that you have made full disclosure of all material facts as failure to
do so could invalidate the policy in the event of a claim.

If you need further help, consider firms who offer services such as risk
management and risk assessment which will help you to present your proposal.

Where appropriate, consider supplementing the proposal with other pertinent
information on ‘risk management’ issues, such as:

• Compliance systems eg frequency of file checking

• Management control, eg show the degree of supervision of advisers

• Training and competence, eg evidence of assessments of competence and

• Client acquisition, eg client satisfaction surveys

Further information from the FSA

Small firms website:

Using the FSA Handbook: an overview for small firms:

Small mortgage and insurance intermediaries – (general rules):

Small mortgage and insurance intermediaries – mortgage intermediaries
(additional rules):

For further information:

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