Financial Lines Group

The operational risks faced by the financial and professional services community continue to become more onerous. Today's increasingly litigious and regulated environments mean that both companies and their employees face greater exposure arising from the provision of their services.

JLT has a proven track record in providing innovative solutions to a wide range of clients across a varied spectrum of businesses.

Our clients include many of the world's leading stock exchanges, financial institutions, accountants, solicitors, stock brokers and fund managers. Our knowledge enables us to provide the technical advice these companies need and we use our experience and market relationships to develop new products and provide competitive solutions.

Products include:

Professional indemnity

No longer a last resort, legal action is increasingly the immediate recourse for clients believing that they have incurred financial loss as a result of advice or services received from fee-charging advisers.

Organisations such as solicitors, accountants, auditors, management consultants, insurance companies and intermediaries, communications and technology companies are increasingly at risk from this trend as society becomes ever more litigious.

At JLT we have a team of expert advisers who create the bespoke insurance solutions that are needed by larger companies in these sectors. We work closely with you from the outset to fully understand your business, examining your business type, claims history and risk profile to ensure that we understand your key objectives and requirements. Where appropriate our actuaries analyse your claims history to allow us to properly consider different policy deductible options.

By working in this way we are able to design the policy coverage to your exact requirements. This means that premium is not wasted on extensions which add little or no value to you.

Being recognised as experts in this field, we have established close relationships with a number of insurance underwriters who recognise the skills of our brokers and the effectiveness of our approach. This, in turn, enables us to deliver the best solution to you.

Crime - Employee and third party and include specific computer related risks 

Directors' & Officers' Liability

With the current heightened regulatory environment and increasing investigations into companies, directors have a greater duty to protect against liability for wrongful acts committed in their capacity.

Some European law makers are increasing environmental responsibilities and introducing new class action litigation. While, in the UK, the new Companies Act 2006 imposes greater risks on directors, including more rights for shareholders to sue.

At JLT, our team of Directors' & Officers' Liability (D&O) specialists are experienced within the US, Asian, European and London markets, and provide fully tailored policies at a competitive cost.

We use our D&O 'healthcheck' to benchmark your cover against best practices, the latest market enhancements and pricing structures. We take into account the D&O risk exposures, corporate insurance buying philosophy and the required balance of protection between individuals and the company.

Information supplied to the insurance market is reviewed to minimise your disclosure burden and the potential for repudiated claims. And our knowledge of the insurance requirements in each country you operate in help to provide fiscal and legislative compliance.

We represent your interests in the market and negotiate directly with underwriters, while all technical support, claims handling and documentation is co-ordinated centrally from one location. It's a comprehensive approach that gives us confidence in our service quality and ability to achieve the optimal broking result.

Regulatory defence costs liability Cyber and IT risk

With so much business now carried out online and across networks, vital information and web-based applications are increasingly vulnerable. While loss of mission-critical data can be catastrophic, organisations also face regulatory enforcement where privacy and security-related controls are breached.

Unauthorised use of computer networks, identity theft, spyware, phishing and malicious code are some of the risks posed by those with harmful intent. However, operator errors and network outages can be equally disruptive to your business.

Traditional insurance policies rarely cover these types of threat.

Furthermore, changes in regulation and technological advances can quickly render policy wordings obsolete.

At JLT, we recognise these problems and realise that your needs are specific to your business and industry sector. Our experienced Cyber and IT team understands this market and is designed to work closely with you to ensure that your evolving needs are always met by bespoke policy wordings.

As well as particular expertise in:

  • Privacy and network security
  • First party losses arising from accidental or malicious incidents
  • Media liability losses
  • Crisis management costs
  • Cyber fraud
  • Reputational risk
  • Intellectual property rights including patent infringement.

We have a well established reputation for innovation in cyber and IT risk control and expert knowledge of the communications and technology sectors.

For over a decade we have been providing advice, solutions and access to the London insurance market to many leading corporations across the world.

Transactional liabilities

Mergers & acquisitions insurance products are designed to cater for the potential liabilities that arise out of these kinds of transactions.

These policies can be purchased by either the buyer or the seller dependent upon where the liability rests in the underlying transaction. There are instances when they can be used for general corporate purposes, particularly for tax and litigation related issues.

In the main, they are used to help facilitate deals, remove obstacles to transactions being completed or unlock funds otherwise reserved against potential liabilities.

The following are the main insurance products but insurers will consider other exposures outside of these.

Warranty & indemnity insurance

Warranty & indemnity insurance is designed to protect against breaches of warranties and claims under the tax covenant in a sale and purchase agreement (SPA).

For a seller, the policy covers damages resulting from a breach and defence costs. The policy enables the seller to ring-fence their liability and access sale proceeds immediately without having to make a balance sheet reserve or tie up funds in escrow.

For a buyer, the policy also responds to damages following insured breaches of representations in the SPA as well as defence costs in relation to third party claims. The policy is often used by buyers where the seller's cap or the survival period is insufficient for their requirements.

Premiums are usually in the region of 1% to 2% of limits purchased subject to the specifics of the deal.

Tax opinion insurance

These policies are used to ring-fence potential liabilities arising from specific tax treatments in the event they are challenged by the relevant tax authorities. Insurers will consider situations where legal or accounting opinion supports the treatments but where a buyer is concerned there is the possibility of a challenge by the tax authorities.

Tax Opinion insurance premiums are in the region of 3% to 8% on the limit purchased. The pricing will be governed by the likelihood of challenge and how aggressive is the tax position undertaken.

Litigation insurance

Similar to tax opinion insurance, these products transfer liabilities arising from potential litigation. The insurance can ring-fence certain liabilities or sit excess of an estimated quantum to provide catastrophe cover where a negative outcome is expected. Similar policies are available for environmental contamination cost cap.

These products are more difficult to rate as each scenario is very different. Pricing would ordinarily start at 6% of the limit purchased and can be considerably higher.