Lawyers shun PI cover as premiums rocket
by Gill Montia
Story link: Lawyers shun PI cover as premiums rocket
The Law Society Gazette has reported that the cost of insuring the legal profession against professional negligence claims has prompted one in 20 UK law firms to lapse their commercial professional indemnity cover with provider, ARP
The insurance is unusual because it has a universal renewal date at the start of October, as the legal year begins.
According to the publication, current premium rates can snuffle up 27.5% of a firm’s turnover if the renewal is dealt with on time, or up to 47.5% for delayed participation in the ARP scheme.
The fall in take up suggests that over 500 UK legal firms may be looking to the Law Society as an insurer of last resort.
According to a report in The Times, the steep rise in premiums reflects concerns that negligence claims will increase during the recession.
In addition, legal firms focused on real estate business have been singled out for a specific loading: if mortgage fraud has occurred, lenders may be inclined to sue.