New PII option for small firms unveiled
The Law Society has announced that it is to offer small firms of solicitors a new direct route to professional indemnity insurance (PII) cover.
The Society has entered into a joint venture with Miller Insurance Services LLP to provide PII cover for firms with between one and four partners.
The service, called Chancery Pii, provides direct access to insurers with at least A- (Standard & Poor’s) or equivalent financial security rating but does not provide a broker service or any advisory services. It does not accept enquiries from brokers, pay any broker commissions or charge any management fees. The absence of broker commission and management fees will create a viable level of profitability for insurers, so encouraging a long term presence in the market for this segment.
Commenting on the market reality for smaller firms Law Society chief executive Desmond Hudson said:
‘We have had concerns about instability of the solicitors’ PII market, particularly the one to four partner segment, for some time now. Many firms have resorted to using an unrated insurer – often because of lack of obvious choice. A number of rated insurers have withdrawn from this segment and the gap has been filled by unrated insurers, some of whom enter for a few years before withdrawing or, worse, becoming insolvent. This is extremely detrimental to the profession.
‘It was right for us to explore options with the insurance market to increase the availability of choice for our members, particularly smaller firms. Chancery Pii is the result of this. We have created a solution that provides a quick and easy way to access rated insurers, that emphasises security, quality and stability. We continue to advise firms to consider the financial security of insurers in the market.’
It will be interesting to see whether firms that have not been able to obtain cover elsewhere will be able to do so through the Society operated scheme.