Recent years have been difficult for law firms – at least as far as your professional indemnity insurance has been concerned. One factor was the 2019 Lloyd’s thematic review, which identified Solicitors’ PII as one of the worst performing lines of insurance. There is a widespread acceptance that the tide has turned, and, following a number of years of limited market competition, we are seeing the return of a ‘softer market’ – as many insurers are looking to grow their books combined with some new entrants.

Miller’s Legal Risk & Compliance Conference featured a panel session comprising James Graham and Sharon Glynn of Travelers, and Zarina Lawley, Miller’s Head of Legal Services. As one of the few insurers who have insured solicitors since the demise of SIF, Travelers is particularly well placed to comment on the current market conditions.

They observed that the softer market was emerging against a backdrop of increasing frequency and severity of claims. Not all firms will experience the soft market in the same way – and those with good claims experiences, and strong messaging (backed up with evidence) of effective risk management processes will gain most benefit. 

Lawley emphasised the continuing importance of longevity and stability, both in your choice of insurer, but also in your relationship with that insurer. When you need your insurer – when a difficult claim hits – you really understand the value of a long-term, sustainable relationship with an insurer that offers a lot more than just a policy schedule and a cheap premium. Chasing price alone is a dangerous strategy which can back-fire longer-term. Working with a trusted specialist PII broker can help you get the best of both worlds.

Areas of concern for insurers

  • Retainer management continues to be a major source of claims
  • Effectiveness of risk controls relating to your client account
  • Aggregation of claims – impact on costs
  • Unbundled legal services

For more information on the current proposals to move away from client accounts to use of Third Party Managed Accounts, see our recent article.

Tips for preparing for renewal

With renewal season coming into view for the majority of firms, it is useful to have a refresher on what ‘good’ looks like in your PII submission:

  • A properly completed proposal form
  • Proactive engagement with your insurer – especially where changes are planned to your business. Firms that engage openly, and early, generate a positive relationship.
  • A brief but substantive risk management submission, which convincingly demonstrates effective risk management (as opposed to simply making the right noises)
  • Claims analysis and evidence of applied learning
  • Don’t try to hide your dirty washing or downplay riskier areas of work. Rather be up-front and demonstrate that you are both aware of the associated risks and already operating risk controls appropriate to those risks. (“We are like your GP – we have seen everything before”, Travelers’ Sharon Glynn wryly observed).
  • Don’t forget to highlight unique features of your business – and evidence your workplace culture.
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For further guidance read our article: Top tips for navigating your PII renewal and preparing your submission for insurers

If you would like to discuss anything regarding the insurance market or an upcoming renewal, contact your Miller representative or Calum MacLean.