The concerns of the profession about looming professional indemnity insurance costs have been acknowledged by the Law Society PII Committee.
Law Society President Michele O’Boyle says it is clear that the impact of COVID-19, among other factors, is expected to have a profound effect on insurers’ investment return, claims and loss of business.
“There is concern in the market that claims will increase in 2020/21 due to the COVID-19 lockdown, and expected consequential recession,” the President said.
“This makes solicitors’ PII an unattractive market for insurers.”
As a result, it is expected that premiums are likely to increase for the 2020/21 renewal due to factors other than the performance of the solicitors’ PII market in Ireland.
The situation is being actively monitored by the Law Society and the PII Committee with ongoing communications in order to make the solicitors’ PII market more attractive to insurers.
The Law Society is also in ongoing talks with potential new insurers who may be interested in joining the market.
Insurers are increasingly focused on firms’ risk management policies and procedures as an indicator of the risk profile of the firm.
Firms are advised to consider putting the following measures in place, and reporting on them in their common proposal form to insurers when renewing:
- A full risk audit of your firm, especially checking problem areas that can give rise to claims, such as register of undertakings, letters of engagement, and problem files,
- Training of your solicitor and non-solicitor staff in risk management, including cybersecurity,
- Robust cybersecurity measures, especially in the area of multiple checks on receiving and providing bank-account details, including obtaining professional advices on same where appropriate.
Firms should start pulling together information now for completion of the common proposal form. The current common proposal form on the Society’s website can be used as a guide for the information that will need to be provided.
Insurers look for firms that properly complete the form first time, with in-depth detail and information, as this is seen as a mark of the firm’s professionalism and risk profile.