UK-based insurance intermediaries were warned of a heightened regulatory burden at a City seminar today, with the FSA's tough rules and guidelines on professional indemnity insurance clearly in the firing line.
UK businesses in sectors as diverse as property management, dentistry and used-car retailing, as well as insurance broking, will be required to cover claims that result from employee dishonesty and fraud, warned Reynolds Porter Chamberlain (RPC) at its ninth annual professional liability seminar.
The requirement goes far beyond the guidelines of the EU's Insurance Mediation Directive, which only requires coverage for “professional negligence”. It means that UK intermediaries will be paying much more than their EU counterparts to meet equivalent regulations.
RPC partner Jonathan Davies said the additional costs could put many intermediaries out of business and force others to withdraw from advising on or arranging insurance cover for customers. Consequently, “UK consumers and businesses may find it far harder to access the insurance products they need,” he said.
