The rising number of insolvencies in England and Wales had not led to the cost of professional indemnity (PI) insurance increasing for accountants and auditors, it has been claimed.
According to Troy Russell, a senior vice-president at insurance broker Marsh, after a business fails, accountants can sometimes find themselves the subject of legal action as interested parties attempt to recoup their losses.
If they are subject to action, they can expect their PI premiums to increase if they have to make an insurance claim, he explained.
However, the fact that more firms are now operating in the PI market means that the costs are being kept down despite the rise in insolvencies.
He said: "In some cases there have even been premium reductions at renewal. This bucks the trend of other professions and financial institutions, where conditions are more challenging."
During the second quarter of 2009, 6,584 firms became insolvent in England and Wales.
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