Proposed EU directive would impose compulsory PI cover on wide range of professions

Insurers will attack the EU over proposals that would see the introduction of compulsory professional indemnity (PI) insurance for a wide range of professions.

The proposal states that: "Member states shall ensure that providers whose services present a particular risk to the health or safety of the recipient, or a particular financial risk, are covered by professional indemnity insurance appropriate to the nature and extent of the risk."

But the Comité Européen des Assurances (CEA), the European insurers' trade association, said the proposals presented "serious technical feasibility problems".

The proposed rules, it argued, would extend compulsory PI insurance to business services, including consultancy, advertising and recruitment services; consumer services such as estate agents, construction and travel agents; as well as sports centres and amusement parks.

Royal & SunAlliance technical insurances manager and CEA member Phil Bell said UK insurers would be reluctant to write PI cover under the proposals.

Policies would have to provide cover under the 25 different legal systems of the EU member states. He said: "Insurers are not going to want to write this cover."

He continued: "There would be a problem with UK insurers actually writing it. The underwriters would have to know all the requirements of the other member states. Many UK underwriters do not have experience in this."

Bell said the CEA was putting together a response to the proposals. He said UK insurers were discussing the issue and lobbying the UK government.

No date has been set for a decision to be made on the proposed directive.