IPRU-INV 9.4 POLICY TERMS FOR PROFESSIONAL INDEMNITY INSURANCE

Insurers whose professional indemnity insurance policies can be used by an exempt CAD firm

IPRU-INV 9.4.1R

An exempt CAD firm that has professional indemnity insurance in accordance with this chapter must take out and maintain professional indemnity insurance that is at least equal to the requirements of the rule below from:

  1. (1)

    an insurance undertaking which is authorised to transact professional indemnity insurance in the EEA; or

  2. (2)

    a person of equivalent status in:

    1. (a)

      a Zone A country;

    2. (b)

      the Channel Islands, Gibraltar, Bermuda or the Isle of Man.

Terms to be incorporated in the professional indemnity insurance policy

IPRU-INV 9.4.2R

The policy of professional indemnity insurance must incorporate terms which make provision for:

  1. (1)

    cover in respect of claims for which an exempt CAD firm may be liable as a result of the conduct of itself, its employees and its appointed representatives or where applicable, its tied agent (acting within the scope of their appointment);

  2. (2)

    the minimum levels of indemnity per year as set out in the rules relating to professional indemnity insurance above;

  3. (3)

    appropriate cover in respect of legal defence costs; and

  4. (4)

    cover in respect of Ombudsman awards made against the exempt CAD firm.

Policies in other currencies

IPRU-INV 9.4.3R

If a professional indemnity insurance policy is denominated in any currency other than euros, an exempt CAD firm must take reasonable FCA steps to ensure that the limits of indemnity are, when the policy is effected and at renewal, at least equivalent to those required for the purposes of the rules relating to professional indemnity insurance above.

Conditions and exclusions

IPRU-INV 9.4.4R

A professional indemnity insurance policy must not be subject to conditions or exclusions which unreasonably limit the cover provided (whether by exclusion of cover, by policy excesses or otherwise).