Many solicitors are struggling to obtain quotes from professional indemnity insurance brokers and those that do appear to be facing price rises. For one firm that Today’s Conveyancer is aware of the news of their insurance renewal quote came in at a mighty 200% rise but that is certainly not a universal response with another firm facing a 10% rise.
Brokers are urging firms to prepare properly for renewal, with a spokesperson from Marsh recommending that solicitors complete a detailed report for their brokers of all their risk management processes and history to ensure insurers get a complete view.
At the same time the Association of British Insurers has issued a damming report into the way the profession deals with its professional risks.
The report seeks to “to develop policy and communicate with stakeholders on issues facing the solicitors’ professional indemnity market.”, and calls for some critical changes.
It goes on to say that “The market for solicitors’ professional indemnity insurance is struggling to cope with the combined effects of three clear systemic circumstances:
– The impact of the recession and the economic turmoil of recent years
– The stringency of the minimum terms and the qualifying insurers’ agreement
Only through addressing the problems inherent in the minimum terms and the QIA, and making improvements to regulatory procedures, will this market be able to overcome the cyclical upheavals that it faces, and become an efficient, sustainable and competitive market, able to deliver well-priced and effective insurance to a healthy profession. “
The changes that the ABI call for are as follows:
– The Assigned Risks Pool should be funded directly by the profession through a levy which makes the costs transparent.
– Policies can be voided for misrepresentation and material non-disclosure, and also for non-payment of premiums, subject to changes in run-off procedures.
– Non-payment of premiums should be reportable to the SRA
– The minimum terms would exclude claims made by financial institutions, and this clause would be added as a voluntary and separately negotiated extension to the policy for those solicitors’ firms that required such cover.
– Claims for fraud and dishonesty by the insured would be excluded from the policy
– It would no longer be compulsory for insurers to offer run-off cover, run-off policies would be offered on an annual basis, and could be voided for non-payment of premium.
– The single renewal date should be scrapped.
– Timely, open and transparent disciplinary action, including details of previous events.
– Phoenix firms must be prevented
– Matters referred by insurers must be thoroughly investigated in a timely manner, and appropriate action executed swiftly
– Partnership in more than one firm must be banned
– Rapid closure for firms who pay no ARP premium
– Improved awareness for solicitors of handling client accounts
– Improved resources of SRA to supervise and oversee solicitors
If you require an independent assessment of the risk in the way that you manage conveyancing please call Chris Harris on 07983 485490 begin_of_the_skype_highlighting 07983 485490 end_of_the_skype_highlighting.