Renewal tips


With the renewal date just a few months away, law firms should consider renewing their professional indemnity insurance. A practice must convince an insurer that its risk is an attractive business proposition. As this takes time, firms should start the renewal process early to give their insurers enough time properly to consider their cases. Firms lodging late applications will have little chance of a reduced premium and run the risk of being forced into the assigned risks pool by default.



Some ways a practice can help itself when applying for new PI cover include:



- Ensuring all the firm's decision-makers are available to make key business decisions - for example, whether the firm needs additional insurance, such as deductible infill, an excess layer or additional run-off protection.



- Taking care that the proposal is clearly presented, without any gaps. A well-presented proposal is likely to be considered far more favourably than a poorly presented one - regardless of a practice's merits.



- Keeping a comprehensive and up-to-date synopsis of any claims notified from 1 September last year so they can be easily explained to any prospective insurer, and providing claims records from the Solicitors Indemnity Fund and all previous qualifying insurers. (Note that it may take some time to gather all of this information.)



- Complete all the questions on the renewal form, even if they seem irrelevant. The underwriters have included them for a reason and consider them important.



- Ensuring all employees have notified any claims or circumstances that might have arisen since last year. These relate to the practice's current insurance and everything should be notified within the specified time frame against the policy, so there is no confusion if the insurer changes.



- Avoiding a large number of claims for simple matters, such as missed diary dates, is achievable by implementing risk management procedures. Insurers look for risk controls, and a reduced number of claims now could lead to potentially lower premiums.



- Refrain from asking four or five brokers to obtain quotations. There are limited number of insurers and they do not respond well to multiple applications from one firm.



The best advice for firms is to use a recognised broker who knows what an insurer is looking for and who can make the process run smoothly.



This column was prepared by AFP Consulting, a Division of Alexander Forbes Risk Services UK