Law Society acts after helpline reveals inflated quotes from PII insurers
Date Published: 25-09-2009
Law Society acts after helpline reveals inflated quotes from PII insurers
The Law Society has written to every professional indemnity insurer and the Association of British Insurers asking for an urgent response to its concerns, after it emerged that some qualifying insurers are quoting professional indemnity insurance (PII) premiums hugely inflated rates to last year.
The recent launch of the Law Society’s PII Helpline has identified worrying trends as the PII renewal season unfolds, with sole practitioners and small law firms being affected the most.
The Law Society is aware that in some cases insurers are quoting premiums which are at least 300 per cent higher than the firm’s PII costs last year despite no change in circumstance for the firm.
Law Society chief executive Des Hudson says:
“We have called for an urgent response from qualifying insurers and the ABI to our concerns and seek their views to avoid leaving firms without cover. Given that we spoke with every insurer months ago and discussed the need for early submission of proposals and the need for responses from insurers in reasonable time the information we have is deeply worrying. We would be keen to meet with them at the earliest opportunity."
“It has become apparent that some firms are struggling to get affordable cover or any cover at all in certain cases. We are seeing instances of unjustified inflated quotes compared to last year, as well as what appear to be questionable practices in imposing unreasonably short deadlines to accept an offer, for example, some insurers are giving solicitors just 24 hours to accept their quote.
“The helpline has also revealed that some insurers have not yet responded to proposal forms or have refused to take new business until late this month, giving solicitors barely anytime to obtain cover.”
Assigned Risk Pool – call for lower premiums from SRA
The Law Society points out that as a result of these problems encountered by some of its members, there could be an increase in the number of firms requiring cover in the Assigned Risk Pool (ARP), which provides emergency PII for a maximum of two years in any five for firms unable to buy cover in the conventional market.
In anticipation of this expected increase, the Law Society has written to the Solicitors Regulation Authority (SRA) raising a number of questions in relation to the SRA’s ongoing operation of the ARP.
Des Hudson says: “We have enquired as to whether or not the SRA might consider reviewing the premium rate for entry into the ARP to reflect the circumstances for which some firms will be forced into the pool.”
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