Our advice is simple for firms this year; start the renewal process for the firm’s professional indemnity (PI) insurance now. It is not too soon although most firms may think so.
You must understand the various options available to your firm. It is more important this year than at any previous renewal. Ensure that representations are made to all available insurers.
- Is your firm in good shape to negotiate a satisfactory renewal this year?
- Do you understand all of the options available to your firm?
- Do your insurers genuinely understand your firms risk profile?
- Is the premium currently charged to your firm fair?
- How does it compare to your peers?
These are all questions that firms should be asking.
What to expect in 2009?
Insurers attitudes are toughening and most are insisting that insurance rates must increase. Early signs are indications are that rates could increase by as much as 25%. Some firm’s will experience even higher increases due to their exposure to claims arising from residential and commercial conveyancing. It is a well known fact that the number of claims made against solicitors (and other professional advisers) increase during recessionary times.
During the last 12 months we have seen a dramatic increase in claims activity. All firms of all sizes and risk profile have been affected. Insurers are very nervous about this growing exposure to negligence claims and worryingly claims against the profession arising from mortgage fraud. Should the insurers be worried? Will this claims activity continue through 2009 and perhaps beyond? The answer to both these questions is in our opinion without doubt yes. Managing the cost of risk is no doubt high on the agenda for all firms this year. If it is not, surely it should be.
With insurance premiums likely to rise and with the possibility of the firm’s policy excess increasing, firms should be thinking about how best to approach renewal in good time to ensure they face no great surprises and disappointment.
The Law Society is taking the whole issue very seriously and is preparing a Practice Note for its members which provides some very useful guidance on how to approach renewal this year. The guidance and advice includes a helpful overview on:
- Who is a qualifying insurer?
- What is the Assigned Risks Pool (ARP)?
- When should you apply for PI?
- Who should you approach?
- What should I include in my firms application?
We would encourage all firms to read the Practice Note and take on board the advice provided.
What should your firm be thinking about now?
Decide on the best adviser for your firm. It is essential that firms select the right adviser. There are many insurance brokers that say they are specialists but are these boasts purely a sales ploy? How many firms do they represent? Do they genuinely have access to all qualifying insurers? Do they deal directly with these insurers or do they use other intermediaries? What is there is experience of dealing with PI insurance for solicitors? Do they have the right kind of experience to help your firm? Do they offer risk management advice and assistance? How do they deal with claims?
A prudent solicitor will ask all of these questions of their potential advisers.
Prime Professions Limited is a specialist insurance broker and a market leader in the field of solicitors PI Insurance.
• We have a dedicated and committed solicitor’s team
• We have access to all qualifying insurers
• We currently represent over 2,500 firms of solicitors in England and Wales (25% of the whole profession)
• We are SRA accredited for our risk management and risk awareness training programme
• We have a specialist claims management team which includes legally qualified claims advisers and consultants
• Prime Professions is the appointed insurance broker to the Sole Practitioners Group and have a dedicated team just for Sole Practitioners
Our clients range from sole practitioners and high street firms through to larger city practices and firms with national and international offices. We would welcome the opportunity to assist your firm at this years PI insurance renewal. We can help your firm prepare and be fit for renewal.
A dedicated team has been assigned to the members of the Nationwide Solicitors Alliance (NSA). Please ensure that you identify your firm as an NSA member when you make contact with us.
Should you wish to discuss your firms requirements or need any advice whatsoever regarding PI insurance or risk management for solicitors please do not hesitate to contact to us.
Key Contacts for NSA Members are Robin Bayly, Jake Fox, Helen Tutin & Martin Ellis