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On PI insurance

05 Nov 10 On PI insurance

MEMBER 335 writes, in response to Member 329's comments in last week's TAXVINE - see 2010 TAXVINE No 44 (29 October 2010):

"Member 329's understanding of mandatory professional indemnity insurance is flawed on a number of levels. The insurer pays the plaintiff directly, therefore the trustee in bankruptcy of a bankrupt insured cannot get the cash. From a regulatory perspective, the plaintiff is therefore the winner, and the protection of the insured against bankruptcy is merely incidental. Mandatory insurance is mandated because it protects the interests of consumers, which promotes consumer confidence in the profession, which promotes the ongoing viability of the profession."