Rates to rise by 15%, says broker

The cost of professional indemnity cover for small and medium-sized accountancy firms is set to rise by up to 15% during the recession, broker First City has warned.

Victor Knoppe, partner at the Lloyd’s broker, said: “Practices in the ‘group A’ insurance bracket – the 35 firms below the top six – will find themselves with bigger premiums this year.”

First City is a professional indemnity adviser to the Institute of Chartered Accountants in England and Wales and the Association of Chartered Certified Accountants.

Gary Head, director of business insurance for Hiscox UK, said: “The rates for accountancy firms have got to unsustainably low levels and below the levels the market can justify with the increase in claims.”

Last year Insurance Times reported on how small and medium-sized law firms were struggling to find professional indemnity cover.