Many law firms will be thinking about renewing their PI insurance. But are you getting the best cover at the best price?
There’s a myth that it’s hard to find insurers willing to cover small law firms. I recently asked a group of sole practitioners in Birmingham how many insurers or managed general agents they thought there were in this part of the market. Most reckoned there were only two or three. In fact, there are 17. They have different risk appetites, of course, but there have probably never been more insurers for small law firms to choose from.
I think there are two reasons for this misperception. The first is that the solicitors’ PI insurance market has been volatile. Since 2000, insurers have come and gone, making it hard at times for some law firms to find cover when the market has dried up. But, also, several brokers have struck exclusive deals with insurers, so law firms may believe they have very little choice of insurers because that is what they’ve been told by their broker.
The good news is that there’s never been a better chance to get a good deal. I don’t mean the cheapest policy, because you wouldn’t want to skimp on something as important as your PI policy. But if your broker tells you that you only have a couple of options then you should speak to another broker.A competent broker – one that works directly with a wide range of insurers and which has plenty of experience – should be able to tell you whether your renewal quote from your existing insurer is competitive. They will do this either by benchmarking your quote against the prices being offered to its other clients, or by getting alternative quotes from other insurers to see if you can get a better deal elsewhere.
A good proposal can save you money
Another reason why many don’t shop around is because they think it’s too much hassle. Eight out of ten law firms who took part in recent research we commissioned said they didn’t get other insurance quotes because: “I don’t have time to fill in all the renewals forms.”
But you shouldn’t have to fill in more than one proposal form to get quotes from other insurers. You just need to make sure that proposal is a good one.
Why? Because you’ll be one of 10,000 small law firms looking for a new PI policy by 1 October from 17 insurers. It’s worth the extra time and effort, as it could save you money.
Here are a few tips to make sure your proposal stands out:
- Make it easy for the underwriter to say “yes”. They’ll receive piles of submissions before renewal so help to make a good first impression with a clear and well-presented proposal. Give an accurate breakdown of your firm’s fee income and work split – they’re two of the most important factors in an insurer’s decision whether to offer cover, and at what price.
- Answer every question appropriately. If you don’t give the kind of answers an underwriter wants then you’re less likely to get the answer you want: “yes, we’ll insure you”.
- Give an up-to-date claims summary. If you’ve suffered claims then briefly explain what happened and what you’ve done to put matters right. Insurers understand that mistakes happen, but they want to know they won’t happen again.
Buying the right PI insurance is probably one of the biggest decisions your law firm makes. You want to make sure you get the best cover at the best price, even if you don’t choose to move insurer. But you won’t know if you’re getting the right deal unless you take a little time to find out, by speaking to a broker with wide access and experience of this market.