Claim chasers could struggle to qualify for Professional Indemnity (PI) cover, warns broker PYV.

A recent report published by the department for constitutional affairs stressed the need for claim management firms to ensure they have adequate PI in place. From the start of 2008, all claim chase companies will be required to have cover for individual claims up to 650,000, with a limit of 1 million or ten per cent of annual income if higher.

However, PYV's managing director Ian Boscoe has stressed that many underwriters could refuse to provide this PI cover because it may have a negative impact on their IFA operations, especially as the image of the claim chasers is poor, reports Legal&Medical.

"They are unfortunately seen by many underwriters as culturally more akin to street traders than lawyers whose approach is more opportunistic rather than professional and are intent on provoking claims rather than assisting the public," explained Mr Boscoe.

He added that the underwriters could also be concerned over possible conflicts, especially if they promote claims against themselves. It is also likely that higher premiums could force smaller claim chase companies out of business.