Renewing your firm’s professional indemnity insurance
Is there a minimum number of insurers I should approach?
Not necessarily. You should use an expert broker of solicitors' PII with broad market access.
You may want to consider using more than one broker to ensure access to the full range of insurers that might be willing to offer PII to your practice.
Different insurers will underwrite different types of firm, with the turnover, number of partners and volume of particular kinds of work (such as conveyancing) being important determinants.
A good broker will provide independent, professional advice and assistance in preparing your submission to an insurer.
Before your broker submits your presentation to insurers, you could contact other brokers to compare. This can give you more information about different brokers’ approaches, and which brokers have tied arrangements with particular insurers.
You can then decide which brokers you would like to use, and which insurers they should approach on your behalf, and instruct them accordingly.
You can approach a large number of insurers using two brokers (or three where some of the brokers do not have full market access).
It’s important to tell the brokers which insurers to approach, so that an insurer does not receive your proposal from more than one broker.
Due to tied arrangements between some brokers and insurers, smaller firms in particular may need to approach multiple brokers in order to access the full range of insurers that are willing to offer PII to their firm.
Check our PII buyers’ guide for guidance on approaching brokers and insurers.
How can I make my proposal more attractive to insurers?
When determining whether to offer cover, insurers consider risk.
It’s essential that you have policies and procedures to mitigate risk, and that you can demonstrate that these are in place and being followed throughout your firm.
When determining whether to offer cover, insurers are looking for more material that will help them assess the level of risk.
As a minimum, your submissions should include:
- a fully completed proposal form
- claims summaries for at least seven years (although some ask for 10 years)
If there are claims notifications or payments, you should:
- provide a brief overview of what happened, and if claims are not settled, the expected quantum
- explain what your practice has done to manage risks and avoid recurrence
- include your last two years’ completed accounts
- if possible, include up-to-date management accounts
Insurers will also want to know about the financial viability of a practice.
Under the SRA’s minimum terms and conditions (MTCs), an insurer is on cover regardless of whether a firm pays the policy excess or even its PII premium, and if a firm closes without paying for its run-off cover, the insurer will also be responsible for providing that cover, so their concern is quite reasonable.
Some practices may not appear to be financially viable to an insurer because their fee income is too small.
Such practices could be financially viable due to external sources such as independent wealth of partners. If your practice falls into this category, it’s important to make this clear to insurers.
Explore our PII resources for more information.
What questions should I ask when making enquiries with a broker?
Ask questions including:
- which insurers can you access?
- can you access them directly or through a chain of brokers?
- if through a chain, how long is it?
- how quickly can you submit my application and get an answer?
- what fees do you charge?
- if I receive an offer, how long will it remain open for acceptance?
- do you have access to low cost finance to fund the premium?
- are you regulated by the Financial Conduct Authority (FCA)?
For more information about purchasing PII, see our PII buyers’ guide.
What should I consider if I end up with more than one PII contract offer?
If you receive either multiple offers of insurance, early renewal offers, or offers for a policy term which is longer than the standard 12 months, you'll need to consider which offer is in the best long-term interest of your firm.
This will not necessarily be the cheapest offer. There are a number of factors to consider in making your choice.
For example, it's likely that premiums will increase over the next couple of years so a policy of over 12 months might be cheaper in the long run.
You may also consider the claims handling service and support the insurer provides.
If you’re deciding between accepting renewal terms for your existing policy, or an alternative cheaper quote, consider the worst-case scenario.
What would you do if you swapped to the cheaper alternative and at the next renewal, cover with the alternative insurer was not available or the cost had increased significantly?
Insurers like a stable source of income, so the insurer you left may not wish to put forward terms. If this were to happen, can you be confident that others would give you cover at competitive rates?
Always switching to the cheapest available cover could make insurers wary of where else you might be seeking to cut costs.
For other potential issues to consider, see our PII buyers’ guide.
Can I spread or defer my PII costs?Firms may wish to speak to their bank about potential PII loans.
We’re investigating market options for members and will provide further details as they become available.
What should I do if can’t contact my broker?
If you cannot establish communications with your broker in a timely manner, you may wish to contact a different broker.
You can find lists of brokers on the British Insurance Brokers Association website.
Alternatively, we've compiled a list of brokers who have good market access and have told us that they're ready to work with our members.
This listing should not be regarded as a recommendation on the part of the Law Society, and other brokers are available.
Howden UK Group
Contact: John Wooldridge
Phone: 020 7133 1427
Mobile: 077 4701 1964
Howden UK Group website
JM Glendinning Professional Risks
Contact: Jake Fox
Mobile: 07921 926602
Marsh (JLT Specialty Ltd)
McParland Finn Ltd (MFL Professional)
Miller Insurance Services
Contact: Taurai Ushe
Phone: 020 7031 2487
Contact: Zarina Lawley
Phone: 020 7031 2491
Hotline: 020 7031 2510
Miller Insurance Services website
Ntegrity Insurance Solutions Ltd
Paragon International Insurance Brokers Ltd
Contact: Martin MacHale, assistant vice president
Phone: 020 7280 8209
Mobile: 07854 314344
Contact: Ryan Senior, senior vice president
Phone: 020 7280 8254
Mobile: 07827 575652
Hotline: 020 7280 8209
Paragon International Insurance Brokers website
The Professional Indemnity Company
Contact: Scott Harrison
Phone: 0333 733 5192
The Professional Indemnity Company website
What happens if my broker can’t find cover for my firm?
You should start your insurance renewal process early, at least two months before the renewal date. Try a range of brokers as soon as possible and conduct a full market appraisal of all options.
We publish a wide range of help and guidance on PII for our members.
You can also call our Practice Advice Service helpline on 020 7320 5675.
If you cannot find cover then solicitors have to operate within the SRA’s extended indemnity period and cessation period – see below.
What happens if I end up in the extended policy period (EPP) or cessation period (CP)?
If a firm does not obtain a new PII policy before its current policy expires, the firm’s last insurer is required to extend cover for a further 30 days under the EPP.
During this time, the firm can continue working as normal while trying to find alternative cover.
If the firm is unable to obtain a new policy within this EPP, it has a further 60 days of the CP to plan to close in an orderly fashion (or attempt to be taken over or merge with a successor practice).
During this time, the firm is not permitted to take on new work but can continue to work for existing clients and attempt to find a new insurer.
It's an unfortunate reality that in a hard market some firms which insurers perceive as high-risk will not be able to find affordable cover – or perhaps any cover – and they may be forced to close.
What should I do if my insurer becomes insolvent?
Read our practice note on insolvency of a qualifying insurer.
Most importantly, existing policyholders must arrange replacement insurance as soon as reasonably possible and in any event within four weeks of the relevant insolvency event.
Potential avenues for redress and compensation are set out in the practice note.
You should consider the financial stability of an insurer before accepting a quote.