Professional Indemnity and the ISO 9000 Relationship
Royal and Sun Alliance, Professional and Financial Risks (ProFin) is one of the UK's leading providers of Professional Indemnity Insurance. Our policy holders range from the traditional professions, such as accountants and surveyors, through to management consultants, advertising agents, those in the construction industry and a myriad of "miscellaneous" professions.
Over the years we have, of course, seen many claims made against our policy holders, a good proportion of which could have been avoided by the application of good risk management practices. Examples of claims that could easily have been avoided include:
- Missing deadlines because the firm had no diary system
- Notes not taken at a crucial meeting meant there was no defence to allegations
made against our insured
- The lack of a contract or engagement letter resulted in clients expectations not being met
- Survey and valuation reports issued with vital details missing because the firm had no checklist to work from
- A job taken on by a junior member of staff became too complex resulting in a claim against a partnership for work they did not even realise they had undertaken
- The firm had no procedures for taking on new clients or reviewing the work of staff
- No professional is perfect and it is for that reason PI cover is purchased; PI Insurers are happy to defend and pay claims for professional negligence. However, they do not expect to have to pay for what really amounts to the failure of a business to properly manage itself. When rating a PI risk at Royal and SunAlliance, we firstly take into account factors such as the type of work undertaken, the experience and qualifications of the directors/partners and staff and, of course, the claims history. Once we are satisfied with these we will look at the overall quality of the risk. We place great importance on the existence and application of risk management procedures and, everything else being equal we will usually apply at least a 10% discount to firms who have obtained ISO 9000 Certification or something similar. Where it is obvious that no attention is given to these areas, we may not quote the risk, or if we do, may impose terms.
Of course, mere possession of a Certificate does not mean a risk will be claims free. We know, however, that by submitting themselves to the Certification process and building the results into their day to day professional activities, firms can reduce the number of easily avoidable incidents similar to those outlined above.
A Certified firm incorporating a risk management culture and their own industry best practice into the everyday delivery of professional services will not only save money on PI insurance but will reduce the time spent on dealing with complaints and allegations made against them.
For further information regarding the possible discounts contact your insurance broker or visit www.rsa-profin.co.uk. Steve Abrahams is the Worldwide Professional Indemnity Product Leader, ProFin, Royal and Sun Alliance.
Over the years we have, of course, seen many claims made against our policy holders, a good proportion of which could have been avoided by the application of good risk management practices. Examples of claims that could easily have been avoided include:
- Missing deadlines because the firm had no diary system
- Notes not taken at a crucial meeting meant there was no defence to allegations
made against our insured
- The lack of a contract or engagement letter resulted in clients expectations not being met
- Survey and valuation reports issued with vital details missing because the firm had no checklist to work from
- A job taken on by a junior member of staff became too complex resulting in a claim against a partnership for work they did not even realise they had undertaken
- The firm had no procedures for taking on new clients or reviewing the work of staff
- No professional is perfect and it is for that reason PI cover is purchased; PI Insurers are happy to defend and pay claims for professional negligence. However, they do not expect to have to pay for what really amounts to the failure of a business to properly manage itself. When rating a PI risk at Royal and SunAlliance, we firstly take into account factors such as the type of work undertaken, the experience and qualifications of the directors/partners and staff and, of course, the claims history. Once we are satisfied with these we will look at the overall quality of the risk. We place great importance on the existence and application of risk management procedures and, everything else being equal we will usually apply at least a 10% discount to firms who have obtained ISO 9000 Certification or something similar. Where it is obvious that no attention is given to these areas, we may not quote the risk, or if we do, may impose terms.
Of course, mere possession of a Certificate does not mean a risk will be claims free. We know, however, that by submitting themselves to the Certification process and building the results into their day to day professional activities, firms can reduce the number of easily avoidable incidents similar to those outlined above.
A Certified firm incorporating a risk management culture and their own industry best practice into the everyday delivery of professional services will not only save money on PI insurance but will reduce the time spent on dealing with complaints and allegations made against them.
For further information regarding the possible discounts contact your insurance broker or visit www.rsa-profin.co.uk. Steve Abrahams is the Worldwide Professional Indemnity Product Leader, ProFin, Royal and Sun Alliance.
0 Comments:
Post a Comment
<< Home