Financial advisers seeking professional indemnity (PI) insurance should engage specialist general insurance brokers who understand the cover’s complexity, according to Insurance House Group Senior Account Manager Abraham Tavares.

A general insurance broker should understand all aspects of an adviser’s business when arranging cover, he told insuranceNEWS.com.au at the recent Association of Financial Advisers conference in Cairns.

“There are no standard claim frequencies when dealing with the financial planning market. It is not a flat claims process, which is why the adviser needs to seek a specialist who understands how a practice works.”

Mr Tavares says it is important to bring up retrospective start dates, to protect advice that may have been given years earlier. Unless the broker specifies this, the underwriter will start from when the proposal is presented.

This is particularly important if the adviser is dealing with specialist investment products.

“If the business started five years ago, the PI needs to start on that date, not when the policy was written,” Mr Tavares said.

“It is also important the underwriter sees all the documentation of a practice, such as statements of advice, Australian financial services licence number and compliance records.

“When I go to an underwriter I take these documents. They love working with a specialist broker.”

He says the PI market for advisers will “pick up”, despite a number of insurers withdrawing during the past year.

“If we get enough competition back in the market, premiums will stabilise. We are encouraging underwriters to come back into the market.”