Solicitors are facing the hardest market for indemnity cover since demutualisation over 20 years ago, with some insurers seeking personal guarantees and demanding that policy excesses be paid into escrow.
Many firms continue to renew on the traditional 1 October date and industry experts say they must start preparing well ahead of time. Speaking at a
Gazette
roundtable on PII, Brian Boehmer, partner at broker Lockton, said: ‘The combined value of the claims of the few now outnumbers the premiums collected [from] the many, which goes against the premise of insurance.’
The Law Society is already reporting premium increases of 5-50% as ‘typical’, at a point when firm turnover is down 10% on average. Jason Butcher, client account manager at Wesleyan, said insurers are not competing on price: ‘The market across the board seems to be supporting pretty much common prices.’
Covid-19 has helped to deliver the hardest market for solicitors’ indemnity insurance since demutualisation more than 20 years ago. Eduardo Reyes reports from the Gazette’s latest roundtable
Eduardo Reyes, Law Society Gazette
Patrick Bullen-Smith, of broker Hera, speaks for the group: ‘It’s hard and, if anything, it’s got harder since October with reduced capacity and lots of claims.’ He relates increases in the cost of PII cover of 10-15%, which come on top of last year’s rises of 30% for many. Insurers ‘are not necessarily offering renewal terms to firms, so you really do need to put yourself in the best possible light’, he adds. ‘Property development work is a real catch-all area that they are really shying away from. So, if you do property development work [you must] really, really explain it. Go down to the nitty gritty of what it is you actually do.’