We are aware that a number of law firms are finding it difficult to obtain PII cover in the run up to the traditional renewal date of 1st October.
The recent hardening of the insurance market is taking its toll with several long-standing providers exiting the market. Those that remain are often offering reduced capacity or refusing to work with firms who have a history of high claim volumes.
With the problems relating to controversial ground rent clauses in newbuild leasehold purchase transactions starting to filter through, and the firms liability in such matters remaining up in the air, this is very much an issue which is on underwriters’ radars. Those specialising in Conveyancing may be required to provide insurers with additional information ahead of renewals. It is important that firms keep their insurer regularly updated on potential circumstances as they arise and take the initiative to provide as much information as possible up front at the proposal stage, rather than leaving themselves at a disadvantage by disclosing this at a later date, which may lead to the insurer reserving their position in such circumstances.
For those able to secure cover, premiums may well increase and there will be a need to focus on/maintain good risk management and compliance processes, ensure staff are fully trained and risk based audits of how the firm does things are carried out; for those less fortunate, this may signal an unexpected end of the road, which must be in line with the SRA’s requirements for an orderly closure.
Should you require any assistance with your firm’s compliance needs, please contact our team on 01829 731 200 or email firstname.lastname@example.org.