# Personal Indemnity Insurance for PIPs



## Dr.Debt (18 Apr 2013)

Does anyone know the ball park costs for Personal Indemnity Insurance for newly appointed PIPs

Is it a barrier to entry ? Will the cost be prohibitive ? Will it keep the little guy out ?

Has anybody got any ideas how new stand alone PIPs can successfully enter the market ?


----------



## Sumatra (19 Apr 2013)

Ball park - €2-3,000

Enter market - [broken link removed]


----------



## Palerider (22 Apr 2013)

Based on rough costs of insurance say €2500, application fee €1500, exam fee for some, almost all ( est €500 ), cost to maintain annual QFA designation say €180, set up costs website €700, establish office well costs will vary here but say €1000 for a virtual office and sundry additional costs of say €500 I make it about €6500 before travel costs to client / to bank, office costs, postage, mobile phone etc 

Working from home will not reduce this much as you will have to have a functioning office with strong administrative skills  .

Recovery of outlay and payment for your time and expertise as a qualified PIP is uncertain, as a PIP you can recommend on behalf of a debtor but the creditor does not have to agree, no agreement = no payment for your time, there will be a lot of this.

I am already working for clients in mediating agreements with their Banks and I know first hand the challenges. There is nothing in this for the small sole trader PIP only hassle, hassle from clients is only the start, I cannot see how minimum wage will be earned by a sole trader PIP, this is for the big guys only who can achieve economies of scale, another monpoly has been created.


----------



## Sumatra (23 Apr 2013)

Palerider agree with you 100%. Only larger clients could justify such a spend.


----------



## Joe_90 (23 Apr 2013)

If a PIP has to set up a client account I imagine that they will have to produce an accountants certificate of compliance with the clients accounts regulations. Another cost approx 1-1.5k per annum.


----------



## Importer (23 Apr 2013)

This is an interesting analysis but I think its a bit too negative.

If you take on four new clients per month, I think any PIP will be quite well paid when up and running.

I think a successful PIP will need to be well organised, have very good administration skills and keep overheads well paired back.

I also think a PIP will need to be credible in the face of potential clients, be professional and have a professional office and set up.

Someone who starts "too cheap" working from their bedroom will probably fail


----------



## Joe_90 (23 Apr 2013)

+1


----------



## Bronte (23 Apr 2013)

Wouldn't solicitors and accountants already have public indemnity insurance and offices already up and running. Solicitors also have client accounts. So the costs are only high for someone who is not already in some kind of business?

The biggest problem I see is clients with no money and banks loath to allow PIP's to get their hands on any little money that is coming in.


----------



## Palerider (23 Apr 2013)

I have seen two courses offered so far, the less expensive being €750 the more expensive €1100, I have also seen an estimated income for the PIP of €4000 over a six year period, I really am not trying to be negative just calling a spade a spade.

There is a lot of background work required, personal visits, understanding how the debtor got where they are, placing a structure on the plan, executing that plan and administering that all the way along, that takes time and quite a lot of it, multiple phone calls, visits, travel costs etc, at an estimate of €666 gross per case annually well you can do the math on whether it is a worthwhile sector.

Assuming of course that most of your clients get an agreement from their creditors, no agreement = no recovery of your outlay.


----------



## Commercial (23 Apr 2013)

This is a very interesting thread for me as I am dealing with banks regularly and welcome regulation in debt negotiation. However, I would like to get a handle on the costs involved.
I have an office, PI and I am a QFA. So what else is required?
€1500 initially to become a PIP and thereafter?
I heard rumours of software of circa. €2,500 being required.
Is there anyone out there or anywhere I could go to get the exact criteria of what is required to set up?


----------



## Sumatra (23 Apr 2013)

And you need to take into account that the business will probably peak in the very early years and then decline very rapidly.


----------



## Palerider (23 Apr 2013)

FAO Commercial

here you go... [broken link removed] 

Best of luck if you proceed with this, I see no opportunity for a return on my time or equity, I do however see lots of time being swallowed up especially in the first year and hassle galore. I've been involved in several businesses and whilst this does compliment part of what I currently do I just cannot see the business sense in focusing my energy in the direction of becoming a PIP.


----------



## Commercial (24 Apr 2013)

Thanks Palerider. I am doing this work already, and you are right there can be a lot of time wasted. However, I like to think that I have it systemized as best I can.
Hopefully, I can continue on!


----------



## frostie (25 Apr 2013)

I received a new quote today, solely based on insolvency work of €1900. It's looking highly unlikely that a client account will be the way forward, an approach similar to liquidation accounts looks to be the practise. 

@Sumatra - Business will be slow enough to begin with, and expect high rejections from creditors as they feel their way through this. Same in the UK when it began there. 

This is going to be based on volume, and if you do not have the infrastructure, it will be costly, this is heavily labour intensive.

www.frost.ie


----------



## Sumatra (25 Apr 2013)

Still to make it work you'll have to be selective in the size of fish you retain. Suggest bigger holes in your net and wishing you all the best in this new venture


----------



## frostie (26 Apr 2013)

Thanks Sumatra, but I think a number of potential PIPs are looking for the 'big fish'. They do not want to fully commit, and will go where they think the money is. From a number of conversations with accountants and solicitors, the so called 'big fish' is where they cherry pick who they will help. It's the wrong approach. You can't dip your toe in the water, you have to have to be ready to dive in, and know that you have the framework behind you to help you float, to manage all of the cases you take on. I work 100% in insolvency, i don't do insurance, investment, etc. I don't think you should pick and choose your clients when they are in a desparate situation, most of my clients are referred by accountants/solicitors who know they cannot facilitate a few clients, so they pass them on to me (no referral fees!). They just want to do right by clients they have had for a number of years.


----------



## wbbs (27 Apr 2013)

I was speaking to someone who works for MABS today and they seemed to think there would be loads of PIPs around and they expected there to be several small operators in what is a medium size rural town.  I seriously doubt that will happen but they thought it would, this was in the context of job opportunities as they knew I wanted a position in this area and were trying to convince me there would be loads of PIPS looking for employees!  

I attended a Grant Thornton seminar months ago on the coming insolvency regime and came away from that with the impression that only the big firms would go for this and they would have a team on the road to cover outside the cities.


----------



## Brendan Burgess (23 Aug 2013)

Have any of you made submissions on this

Authorisation for Debt Management Firms - CB consultation


----------

