Professional indemnity insurance rate hikes coming

Senior industry experts have recently issued a warning that solicitors will face hikes of as much as 50pc when renewing their professional indemnity insurance in the near future.

The higher premiums are being blamed upon a strong surge in business liability insurance claims made against solicitors since 2007.  Some insurers have experienced more than twice the rate of notified claims coming across their desks.

In addition, since four out of the nine business insurance providers that offer solicitors’ cover have left the market in the past few months, there is a significant reduction in the amount of competition for the coming year.

The legal industry will be on the receiving end of at least some reprieve after insurance companies have agreed, with much reluctance, to reinstate a specially designated fund for solicitors who are unable to secure cover in the current market landscape.  Senior insurance sources have referred to the market as an incredibly difficult one, even going so far as to claim that they were astonished at how many more claims the past three years have seen.

Relevant cases include such instances of clients suing over property deals that ended in disaster as well as solicitors being sued by the Revenue due to failures to pay stamp duty in a systemic manner.

One industry expert stated that there are hundreds of lower-profile cases for every one disgraced solicitor, such as Michael Lynn or Thomas Byrne, higher up on the food chain.  There has been some dispute from legal sources, who disagreed with senior figures by stating that there was a distinct lack of evidence regarding any kind of systemic solicitor wrongdoing.

Solicitor premiums have already doubled from their figures in 2009, insurance industry sources say.  These same sources also caution that an additional 50pc rate hike may be in the offing.

© 2018 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

Tags: , ,