Broker-only insurer Folgate has brought out a long-term fixed rate deal for commercial property owners – at a time when rates are rising by around 20% per year.

Synergy offers set premiums for three years, irrespective of claims experience, for corporate clients committed to risk management.

Long-term fixed rate policies were pioneered by Independent Insurance. But Folgate's product is unique in having a penalty clause, binding on both Folgate and the insured, which penalises parties who break the deal within the three-year period.

Folgate deputy commercial underwriting manager Roger Gray said: “We have carefully researched the market in this area and have consulted widely with our 150 partner brokers.”

He added that longer term insurance contracts were becoming a fact of life. However, he added that clients still felt that unlike Folgate, insurers could walk away from many such arrangements at their leisure.

The penalty clause, which equates to 20% of the annual premium, seeks to address these concerns head-on, Gray said.