Firm criticises professional indemnity insurance
JLT has warned that the rise in two-year solicitors’ professional indemnity (PI) insurance contracts could end up costing law firms more money.
The end of the costly assigned risks pool (ARP) from this year’s renewal date has led to an increase in the two year deals.
Two-year contracts are being offered by a number of insurers.
JLT Speciality partner Mike Perry said the contracts were appealing to solicitors because they offered peace of mind less hassle, but warned: “However, as everyone is currently contributing towards the cost of the ARP, it is very possible that premiums will drop for many solicitors next year, and two-year deals are simply a way of locking clients in at a potentially higher than market price.”
Perry said the end of ARP will change the market, adding: “With this imminent change being locked into a deal for a two-year period seems foolhardy, particularly if the insurer offering it is one without a credit rating.
“JLT is providing competitive quotes for quality firms specifically designed to be realistic and sustainable for the long term, which is, in our opinion, a more sensible approach.”