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With the most common solicitors’ professional indemnity (PI) insurance renewal date just around the corner, broking giant Marsh has offered guidance for small and mid-sized law firms in England and Wales.
“In order to secure PI insurance at reasonable terms, small and mid-sized law firms should begin their renewals in good time and demonstrate that they have robust risk management processes in place,” said senior risk adviser, law firms practice, John Kunzler ahead of October 01.
This comes as Marsh reports some upward movement in pricing in the excess insurance market, which provides cover for small and mid-sized law firms above compulsory levels. Meanwhile the primary insurance market for solicitors’ PI risks is said to be well capitalised and competitive.
“Some insurers are applying greater rigour and are being increasingly selective, or are repricing risks, in a bid to limit their exposure,” noted Marsh. “Reductions are mainly limited to those small and mid-sized law firms with very few or no incurred claims, or lower risk areas of work; firms that have claims relating to cyber breaches or identity fraud are more likely to experience premium increases.”
According to the brokerage’s Michael Morgan, professional liability placement leader for the UK, wider market uncertainty is prompting insurers to not only review their books of business and adjust their capacity but even withdraw from sectors they consider high risk or no longer profitable.
“Those small and mid-sized law firms in England and Wales that are perceived as ‘high risk’ by insurers are bearing the brunt of any premium increases in the primary insurance market this year,” he said.
