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Brokers must check after-the-event and before-the-event legal costs insurer credentials – Arc offers a checklist.
The recent voluntary liquidation of after-the-event (ATE) company, Invaro, will make it even more important for brokers to ensure they are placing legal costs insurance business with strong, experienced providers according to Arc Legal Assistance (Arc) which is offering brokers a list of information they should consider before placing business.
Arc, the bespoke legal costs insurance provider, has produced a checklist to help brokers identify the most important areas to review when looking for a legal costs insurance partner. Director of Arc, Richard Finan, says: “The reputation of this market has been severely damaged by numerous high profile company failures in recent years. Perhaps now more than ever brokers need to ask important and probing questions of their prospective insurance provider to ensure they have the right credentials.”
Arc is suggesting that brokers consider 10 key areas when selecting an insurer. These include questions about the insurer’s track record for the type of cover required and whether or not any side arrangements exist between the insurer and a coverholder. Other areas include the kind of insurance structure and the location of the capacity provider. Finan explains: “The increasing number of offshore providers entering the market may not offer your client real protection. By nature of their location these providers are excluded under the Financial Services Compensation Scheme which means brokers’ clients might well be left to pay the costs, excesses and other expenses if the provider ceased trading.”
The checklist also covers policy servicing advice, avoiding pitfalls in the small print and supporting claims overseas. Full details are available on Arc’s website at www.arclegal.co.uk – Media – Article of Interest – Know Your Legal Costs Insurance Provider.