BLS partners Wesleyan for Lawyers offer some advice.
The majority of legal firms surveyed secured quotes from just one or two insurers when applying for professional indemnity insurance (PII) in 2012, new research* from Wesleyan for Lawyers has revealed.
The survey showed that more than a quarter (29%) of legal firms secured a PII quote from their holding insurer only, while 39% secured offers from just one or two insurers.
With the abolition of the Assigned Risks Pool (ARP) coming into effect from October 2013, legal firms were divided on how the change will affect pricing and the number of providers. The research shows:
- 44% believe the demise of the ARP will allow insurers to charge an equitable premium and the price will go up or down based on a firm’s own merits;
- 30% say there will be no effect and prices will remain the same;
- 13% think that it will encourage more insurers into the market and prices will fall;
- 7% believe it will remove the maximum rate an insurer can charge and prices will rise.
While most firms (67%) indicate they will keep their PII renewal date as 1 October, almost a quarter (23%) are going to take advantage of the new rules and move their renewal date to a time that is more convenient for them. Almost one in ten (8%) said they would move it to coincide with their financial year end.
Ged Wood, Professional Indemnity Manager at Wesleyan said: “Finding the right level of PII protection at the right price and from a reputable provider can be a time consuming process. A good broker can help firms navigate their way through the breadth of insurers operating in the market and provide vital insight into the financial security of each of these providers.
“While the effect of the abolition of ARP is not yet known, it will be more important than ever for firms to be seen to be accepting responsibility for risk and managing it appropriately leading into renewal in 2013.”