- My LS
Response to IUA letter to solicitor firms on PII cover
We’ve responded to the International Underwriting Association’s (IUA) open letter to solicitor firms.
The IUA warned that professional indemnity insurance (PII) cover for solicitors “could become unsustainable” if underwriters could not cancel policies where the premium is not paid.
Simon Davis, president of the Law Society of England Wales said: “The Law Society understands the concerns of insurers and is sympathetic towards their request but is mindful that the primary purpose of professional indemnity insurance is to protect solicitors' clients and the wider public.
“We agree with the IUA that non-payment of premiums or excesses by a minority of solicitors is a serious matter, and one that has serious implications for the profession as well as the insurers.
“Insurers are compelled to pass those extra costs on to the rest of the profession, which means that well-managed firms end up paying not only for themselves, but also for the small minority of disorganised or insolvent firms.
“If the problem is not addressed, it could drive insurers from the market – reducing capacity – making it harder to find cover and further increasing the cost.
“We have offered to work with the SRA and the IUA to reach a mutually acceptable solution and have suggested that, as an interim measure, the SRA should be more willing to take regulatory action against solicitors who do not make the requisite payments.
“These are difficult times facing the legal profession and the economy as a whole, so it is vital that we maintain a competitive market for PII. To help achieve this, it is vital that all our members pay for their premiums and excesses.”