Professional Indemnity Insurance

With professional indemnity insurance renewal a little way behind us now it does seem correct to stop and take stock. At the time there were many reports in the press, legal magazines and Law Society Gazette confirming the feeling of many firms that it had been a difficult year for the renewal and a great deal of dissatisfaction with the renewal premiums. There is always an opposite position and there were a number of firms who felt that stable rates and sensible terms had been forced upon insurers and were going to be a benefit for the profession in general.

It is 10 years (almost) since the beginning of the end of the Solicitors Indemnity Fund and the market rate is still lower than the SIF in its final year! In a nutshell the revenue of the profession has grown, the limit of indemnity increased (as have claims and defence costs) but the premiums are still lower so, what is all the moaning and groaning about? Well, at the time renewal was occurring insurers were adjusting their rates and trying to protect themselves which had quite an effect on the small and medium sized firms, especially those with a property base.

So, is this year’s renewal going to be better or worse? Some press are saying that the sensible option for insurers is to not offer cover next year and wait for the good times to come again but the top end insurers who do actually take their business seriously say they are not going to let their customers down. They do however advise that the profession should be considering their options early.

In reality insurance is a necessity – the profession buy it and the insurance companies sell it and we need to work together to make it work.