Key factors for law firms to consider when renewing Professional Indemnity Insurance

Representation and Presentation can be the difference between success and failure when renewing your Professional Indemnity Insurance (PII), so what are the key factors to consider?  

The first half of this year has been hugely challenging for all law firms. Firms are dealing with a myriad of management and risk issues. Business Continuity Plans have been stretched to their limits and, although many have dealt effectively with the aspect of working remotely, the task of returning to work whilst managing social distancing will present even greater logistical challenges. Additionally, as a result of the economic downturn many firms have had to deal with furloughing, negotiating pay cuts, reducing working hours, all the while endeavouring to service their clients to the high standards they expect and deserve.

It is understandable that, given all these challenges, the last thing most management teams will want to be considering is their PII renewal. And yet, for those renewing in 2020, this will surely be an issue of equal importance for many and capable of putting further pressure on cash flow.

Insurers have adjusted rates following a significant increase in the number of larger claims successfully being made against the profession. This, combined with the fear that the global economic crisis will lead to an increase in the number of claims against law firms means that rates are likely to continue to rise throughout 2020. 

Whilst this paints a very gloomy picture there are things firms can do to help manage their PII costs throughout this challenging period.

Representation  

The way in which a firm is represented in the insurance market and how they present themselves to insurers can sometimes be the difference between success and failure.  

It has never been more important to be represented by experts who not only have a proven track record of working with law firms, but who also have access to, and influence with, insurers. Find the broker that is right for you, one you trust to navigate your firm through the process; one that gives you the personal attention you deserve. This is a time for specialist market professionals.

Over the past 12 months there has been massive consolidation in the global broker space. As a result, many law firms are likely to experience disruption in their service teams. All this at a time when you need a team 100% focussed on your needs.

With that in mind it is important to appreciate how Howden’s Professional Indemnity business continues to strengthen its highly successful legal services team. Sarah Hughes, Global Practice Leader of Financial Lines Group Howden UK, says

“We are delighted to be expanding significantly on top of what is already a fantastic team of around 150 market professionals. It means we continue to invest in deep and broad experience and sector expertise for the benefit of our growing list of legal profession clients.”

Presentation

Building relationships with insurers has always been important. To do so firms need to grab insurers’ attention with strong representation and an equally strong renewal presentation. There is a new rigour amongst insurers; PI insurers are actively seeking to select the best quality law firms and each firm must actively work to differentiate the quality of its risk profile in order to secure favourable terms from insurers.  

Working closely with our clients, Howden has a reputation for providing excellent renewal submissions. At present, it is unsurprising that financial resilience is of concern to insurers. A brief report on how the firm has managed the risk issues relating to Covid-19 and “Lockdown” will also be necessary this year. There are many other areas that can make a difference on which we are actively advising our clients.

Regardless of market conditions, appointing the right broker and optimising your renewal presentation goes a long way to securing a successful renewal.

Do your research

In summary, do your research. Make sure you select a broker who has experience of working with law firms. Your broker will be representing you and your business so it is imperative you choose a broker you trust and who gives you confidence that they will present you strongly to insurers. A good broker will steer your firm through the current challenges affecting the PII renewal process. But a great broker won’t stop there. They will continue to keep you updated on important factors and regulatory changes affecting the market throughout the year to ensure you are well informed during, after and right on until your next renewal.

For any further information, please contact