{
  "url": "https://openlegislation.uk/insurance-brokers-registration-council-indemnity-insurance-and-grants-scheme-rules-approval-order-1987/schedule/paragraph-3",
  "json_url": "https://openlegislation.uk/insurance-brokers-registration-council-indemnity-insurance-and-grants-scheme-rules-approval-order-1987/schedule/paragraph-3.json",
  "legislation": "uksi/1987/1496",
  "legislation_title": "The Insurance Brokers Registration Council (Indemnity Insurance and Grants Scheme) Rules Approval Order 1987",
  "legislation_url": "https://openlegislation.uk/insurance-brokers-registration-council-indemnity-insurance-and-grants-scheme-rules-approval-order-1987",
  "path": "schedule/paragraph/3",
  "kind": "paragraph",
  "number": "3",
  "heading": null,
  "text": "(1) Practising insurance brokers and enrolled bodies corporate shall, in respect of each business which they carry on, take out and maintain in accordance with the provisions of this rule a policy or policies of insurance (“the policy”) with an authorised insurer (“the insurer”) which shall indemnify the practising insurance broker or the enrolled body corporate, or where the business is or was carried on in partnership the practising insurance broker or enrolled body corporate and any former partner who, as a practising insurance broker or enrolled body corporate, carried on such business in partnership (in each case “the insured”) against losses arising from claims in respect of such descriptions of civil liability as are specified in this rule and incurred by them, or by employees or former employees of theirs, in connection with such business.\n(2) The policy shall comply with the following requirements:\n(i) without prejudice to the generality of the foregoing provisions of this rule the policy shall indemnify the insured:\n(a) against losses arising from claims made against the insured:\n(A) for breach of duty in connection with the business by reason of any negligent act, error, or omission; and\n(B) in respect of libel or slander or in Scotland defamation,\ncommitted in the conduct of the business by the insured, any employee or former employee of the insured, and where the business is or was carried on in partnership any partner or former partner of the insured; and\n(C) by reason of any dishonest or fraudulent act or omission committed or made in the conduct of the business by any employee or former employee of the insured; and\n(b) against claims arising in connection with the business in respect of:\n(A) any loss of money or other property whatsoever belonging to the insured or for which the insured is legally liable in consequence of any dishonest or fraudulent act or omission of any employee or former employee of the insured; and\n(B) legal liability incurred by reason of loss of documents and costs and expenses incurred in replacing or restoring such documents,\nPROVIDED THAT\n(aa) the policy shall not be required to afford indemnity to any person committing, making or condoning any dishonest or fraudulent act or omission; and\n(bb) for the purposes of paragraphs (2)(i)(a)(C) and (2)(i)(b)(A) of this rule “employee” shall not include a director of a body corporate and “former employee” shall be construed accordingly.\n(ii) The policy shall at inception and at each renewal date, which shall not without the previous consent in writing of the Council being obtained be more than twelve months from inception or the last renewal date, provide a minimum limit of indemnity in either:\n(A) (a) a sum of £250,000; or\n(b) a sum equal to three times the brokerage of the business for the last accounting period ending prior to inception or renewal of the policy,\nwhichever sum shall be the greater.\nPROVIDED THAT\n(i) in no case shall the minimum limit of indemnity be required to exceed £5,000,000; and\n(ii) a minimum sum of £250,000 shall apply at all times to each and every claim or series of claims arising out of the same occurrence.\nOR\n(B) (a) a sum of £500,000; or\n(b) a sum equal to three times the brokerage of the business for the last accounting period ending prior to inception or renewal of the policy,\nwhichever sum shall be the greater.\nPROVIDED THAT in no case shall the minimum limit of indemnity be required to exceed £5,000,000.\n(iii) No policy shall without the previous consent in writing of the Council being obtained have an excess or deductible applying to the insurance in an amount which exceeds one per cent of the minimum limit of indemnity required by paragraph (2)(ii) (A) or (B) as the case may be of this rule.\n(iv) The policy shall cover the insured for the full indemnity required by paragraphs (2) (i), (ii) and (iii) of this rule in respect of all claims first made and reported during the period of insurance regardless of the time at which the error, omission, act, event or occurrence which gives rise to any such claim may have occurred.\n(v) The policy shall indemnify the insured in respect of claims made against the insured, or losses incurred by the insured, and arising in respect of all businesses which the insured carried on either alone or in partnership when registered or enrolled.\n(vi) The policy shall specifically provide that “This Policy of Insurance is taken out pursuant to the Insurance Brokers Registration Council (Indemnity Insurance and Grants Scheme) Rules 1987”.\n(3) (i) For the purposes of paragraph (2)(ii) of this rule:\n(a) “the brokerage of the business for the last accounting period ending prior to inception or renewal of the policy” shall mean any brokerage disclosed or contained in the last accounts of the business which have been prepared and submitted to the Council in accordance with rules made under section 2 of the Act or where no such accounts have been prepared and submitted since registration or enrolment any brokerage disclosed or contained in the most recent accounts of the business submitted to the Council with or at the time of any application leading to registration or enrolment; and\n(b) if the period covered by any such accounts shall be greater or less than twelve months then the figure for the brokerage disclosed or contained in such accounts shall be amended pro rata to give an equivalent figure for a twelve month period.\n(ii) For the purposes of paragraph (2)(iv) of this rule “claims first made and reported during the period of insurance” shall include claims subsequently made and reported if the circumstances or occurrence which give rise to any such claim have been notified to the insurer during the period of insurance.\n(4) Practising insurance brokers and enrolled bodies corporate shall:\n(a) forthwith inform the Council in writing if:\n(i) during the currency of a policy the insurer has avoided or cancelled the policy or has notified his intention of doing so;\n(ii) the policy has not been renewed or has been cancelled and another policy complying with the provisions of these Rules has not been taken out from the date on which the previous policy lapsed or was cancelled;\n(iii) during the currency of a policy the terms or conditions are altered in any way so that the policy no longer complies with the provisions of these Rules;\n(iv) the insurer has intimated that he intends to decline to indemnify the insured in respect of a claim under the policy;\n(v) the insurer has given notice that the policy will not be renewed or will not be renewed in a form which will enable the policy to comply with the provisions of these Rules;\n(vi) during the currency of a policy the risks covered by the policy, or the conditions or terms relating thereto, are altered in any way;\n(b) forthwith inform the insurer in writing:\n(i) of a claim by or against the insured; and\n(ii) of all circumstances or occurrences of which the insured is aware which may subsequently give rise to a claim by or against the insured; and\n(c) comply at all times with the terms and conditions of the policy.\n(5) The insurer shall be entitled at any time to disclose to the Council the following information relating to the policy:\n(i) any particulars of the policy relating to the requirements of this rule;\n(ii) any other information relating to the policy whether or not the policy is in force or may have been avoided or cancelled or has lapsed;\n(iii) whether the policy has lapsed or not been renewed or whether the insurer has avoided or cancelled the policy for any reason or intends to do so;\n(iv) that he has intimated that he intends to decline to indemnify the insured in respect of a claim under the policy;\n(v) whether in the opinion of the insurer the policy complies with the requirements of these Rules.\n(6) The Council shall be entitled at any time to disclose to the insurer any information relating to the policy including, without prejudice to the generality of the foregoing:–\n(i) particulars of a claim by or against the insured;\n(ii) all circumstances or occurrences of which the Council is aware which may subsequently give rise to a claim by or against the insured; and\n(iii) any other information relating to the policy whether or not the policy is in force or may have been avoided or cancelled or has lapsed.\n(7) For the purposes of this rule “the insured” shall include:\n(a) the estate or personal representatives or trustee, or assignee, in bankruptcy of such person; and\n(b) in Scotland the partnership in addition to the members thereof.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1987/1496/schedule/paragraph/3",
    "retrieved_at": "2026-10-29T16:21:08.615521+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}