Solicitors’ indemnity costs down by a tenth

by Richard Kilner

Story link: Solicitors’ indemnity costs down by a tenth

Competition has driven down the cost of professional indemnity insurance for solicitors in the majority of law firms across England and Wales.

According to Sandra Neilson-Moore, practice leader for law firms’ professional indemnity at Marsh, rates on coverage for primary layers have fallen by 10%, or more, for many top firms. As gross revenues for bigger firms continue to increase steadily insurers are able to retain premium rates at relatively the same level and give substantial decreases as regards rate on revenue.

She adds that smaller firms are facing even greater competition, and the premium in the mandatory primary layer is expected to fall this year.

Despite high levels of activity within the market a majority of firms did not change insurer.

An MD of Marsh’s UK professional indemnity practice, Andrew Jackson, has observed that many small firms leave it until the last fortnight before renewal deadlines to actually renew, and are frequently able to receive reduced premiums as the market fights to maintain their share.

He warns although competition has, for the time being, resulted in cheaper premiums that are good for firms the longterm sustainability of lower rates is in doubt.