Professional indemnity insurance premiums in Ireland rise by 56 per cent

One survey of solicitors’ firms in Ireland recently discovered that professional indemnity insurance premiums have risen by an average of 56 per cent over the past 12 months.

Carried out by the Behaviour and Attitudes research firm at the behest of the Law Society, the survey revealed that the average total professional liability insurance premium rose to €38,416 in 2010, up from €24,695 the previous year.  The hardest hit firms – ones with poor business liability insurance claims histories – saw their average premium increase by an eye-watering 132 per cent.

20 per cent of firms stated that they had needed to make a professional indemnity insurance claim over the past five years.  Despite more than 9 out of 10 of these firms implementing risk management procedures in the wake of their claims, the steps taken did not always lead to a reduction in premium payments.

A total of 770 solicitors’ firms responded to the survey.  Just two insurers – the Solicitors’ Mutual Defence Fund and XL Insurance – were found to serve two thirds of the professional indemnity insurance market after the departure of Quinn and RSA from the market over the last year. SMDF has since declared insolvency and will not be providing cover past the 2011 renewal date on 1 December.

In 2010, more than 40 per cent of solicitors’ firms made the decision to change insurers.  More than two out of every three firms received notification of their 2011 premiums less than two weeks before the renewal date.

The survey stated that one significant factor that caused difficulty to firms in renewing their insurance cover was the consequently short amount of times given to them to consider quotes.  Ken Murphy, director general of the Law Society, stated that the survey provided objective evidence of how extraordinarily costly the results were in not only monetary terms but uncertainty and stress as well.

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