Some professional indemnity (PI) insurers are applying greater rigor, are being increasingly selective, or are repricing risks, for small and mid-sized law firms in England and Wales, warned Marsh in a market update.
As Oct. 1 approaches – the most common PI insurance renewal date for the sector – Marsh noted that reductions are mainly limited to those SME law firms with very few or no incurred claims, or lower risk areas of work. On the other hand, firms that have claims relating to cyber breaches or identity fraud are more likely to experience premium increases, Marsh added.
Marsh further reported that while the primary insurance market for solicitors’ PI risks is well-capitalized and competitive there is some upward movement in pricing in the excess insurance market, which provides cover for SME law firms above compulsory levels.
“Wider market uncertainty is prompting many insurers to review their books of business, adjust their capacity, or withdraw from sectors that they perceive as high risk or no longer profitable,” said Michael Morgan, professional liability placement leader, UK, Marsh.
“Those small and mid-sized law firms in England and Wales that are perceived as ‘high risk’ by insurers are bearing the brunt of any premium increases in the primary insurance market this year,” he added.
John Kunzler, senior risk adviser, Law Firms Practice, Marsh, commented: “In order to secure PI insurance at reasonable terms, small and mid-sized law firms should begin their renewals in good time and demonstrate that they have robust risk management processes in place.”
Marsh said it last month launched an insurance solution to assist small and mid-sized law firms in England and Wales manage their PI risks. Marsh said the solution uses analytics and independent performance data to model a law firm’s individual risk profile, meaning clients will receive tailored pricing based on their risk management performance and claims histories.
Source: Marsh
Topics Trends Pricing Trends Market
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