Last March new minimum levels of cover came into force for those firms conducting non investment insurances - ie those firms that advise and arrange Insurance business.
The new limits were brought about by the Insurance Mediation Directive (IMD) - in line with the increase in the European Index of Consumer Prices, over the five-year period since the IMD's entry into force.
Firms must now have a minimum level of cover of €1,120,200 for a single claim and €1,680,300 in aggregate.
The FSA expects all such policies to at least meet the minimum level of cover at the outset and throughout the duration of the policy.
Most PI policies however determined in British Pounds - the recent exchange rate fluctation has meant the Sterling equivalent sum insured has fluctuated over the last 120 days sharply:
Highest (Oct 13th 2009) 0.940801 - £1,190,688 - single claim
Lowest (Jan 28th 2010) 0.8616 - £1,300,140
2nd March 2010 0.906351 - £1,235,946
(source www.x-rates.com)
Care is required by Firms to ensure that adequate cover is in place - the onus is on the Firm and not the FSA.
Time to check your level of cover.
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