The text below is taken from the document: Lloyd's Broker Registration, a guide for applicants.
You must demonstrate to us that you have taken out and will maintain professional indemnity insurance which meets the following requirements.
Limit of Indemnity
The minimum limit of indemnity shall be the greater of £3,000,000 or 4 times the annual net retained brokerage as shown in the most recently audited financial statements at the time of renewal of your policy.
If your annual net retained brokerage is less than £15,000,000 the minimum limit of indemnity need be no more than £20,000,000.
If your annual net retained brokerage is greater than £15,000,000, the minimum limit of indemnity need be no more than £30,000,000.
Excess
The insurance excess in respect of each claim must not be more than:
- 25% of your net tangible assets for the last financial year, as shown in your last audited accounts; or
- £2,500,000
Whichever is less.
All the figures are stated in pounds sterling. Local currency equivalents will be used based upon the relevant exchange rate at the time of your application.
While the above requirements represent Lloyd's minimum professional indemnity insurance requirements, a managing agent may require higher levels of PI cover for prudential reasons when discussing its TOBA.
