Insurance Product Information Document (IPID)

An IPID is a short, stand-alone document, summarising the insurance product. This must be provided to clients before you conclude a contract. The insurer is responsible for drawing up the IPID and we recommend that you obtain an IPID from them and provide it to the client in all cases. Even if the insurer sends the IPID to the client directly, you should provide a further copy, so you know it has been received. You might be asked by the client to explain the information contained in the IPID, though insurers will have little scope for varying the appearance or format of the IPID. There are insurance specialists in the firm who can advise the client if so. The IPID is not however a substitute for the full policy wording. You should make sure the client receives the IPID and the full policy wording as well as the insurance certificate.

Click here for examples of a Certificate of insurance and Policy Wording in a conveyancing matter.

Personal recommendations

To the extent that there are different types of policies on offer, then the client or the broker must choose what policy to purchase. You cannot choose, as that would constitute a "personal recommendation". Only persons who are expert in the insurance policies under consideration and who go on to provide the client with a "personalised explanation" of why they think that that policy would best meet the client's insurance needs, can help the client choose a policy. Firm policy is that you may provide details of a range of different products that you are aware of but you may not make any personal recommendation of any particular policy unless you are authorised to do so by the General Counsel. The template DNS makes it clear that you are not providing a personal recommendation about the insurance product/s offered.

Fees

You will need to ensure that the firm is not remunerated in a way that conflicts with your duty to act in your client's best interests. If a quotation provided is accepted and we receive any form of fee or commission payment for the placement of an insurance policy or funding arrangement, this must be refunded to the client. The SRA COB Rules require that you account to the client for any pecuniary reward or other advantage you receive from a third party.

Insurance checklist

There is so much to think about when dealing with insurance that you are advised to use this checklist. Click here for a stand-alone copy you can complete and add to your file.

The Client's needs and any existing provision

1. Have you considered your duties when making a referral to a broker and made a file note? See Instructing other law firms, experts, advisers, etc. above?
2. Have you recorded what risk the client needs to insure against and why?
3. What checks have you made to establish whether the client has existing insurance that may cover this risk? E.g. under their household insurance policy or via a business risks policy or membership of a trade union? Have you made a file note?

The recommended insurance

Have you seen written correspondence to the client (from you or the broker) as to:

1. Name of proposed insurance provider
2. What type of policy is being recommended by the broker?
3. Have you told the client what the premium is and explained to them how it is calculated?
4. Is this a one-off premium or (for ATE) are staged premiums required?
5. When and how is the premium paid, e.g. up front or deferred to conclusion of the matter?
6. Do we hold funds on account to pay the premium?
7. In contentious matters, have you explained to the client that even if they succeed in the claim, that they will not be able to recover the cost of the ATE insurance premium from the other side?
8. Is the premium self-insured, i.e. does the policy cover the cost of the premium if the policy pays out? Some types of costs insurance (e.g. ATE insurance) provide this benefit.
9. Does the IPID cover the following:

1. Who the policy insures?
2. What risks the policy covers?
3. What the key features of the policy are?
4. Is the cover subject to any conditions or excesses?
5. What is the limit of cover (financial or otherwise)?
6. What does the policy not cover i.e. explicit exclusions and omissions?
7. What is the duration of the policy?

1. Express instruction from the client to purchase the intended policy

Suitability of insurance

1. Confirmation that you are not making a personal recommendation in relation to the insurance product.
2. A note on your file as to why you are satisfied that the policy is consistent with the client's demands and needs?

Documents sent

1. IPID
2. Demands and Needs Statement (per template or as approved by the General Counsel)
3. Insurance certificate
4. Policy wording