The number of professional liability insurance claims brought against law firms has been on the rise lately, according to the recently released results of a research study.
Business liability insurance broker Ames & Gough conducted the survey this past spring, finding that the main causes of the uptick in professional indemnity insurance claims was attributed to the long-lasting effects of the global economic crisis and resultant recession. Clients of these law firms are encountering more and more financial difficulty, according to the survey, and as the impact on businesses becomes increasingly pronounced, the inclination to seek redress from their legal advisers grows.
Legal professionals need to demonstrate more care in representing their clients due to this increased financial pressure, the survey recommended. Otherwise law firms run the risk of becoming targets for legal claims brought against them as the financial situation continues to to worsen for these already hard-pressed clients.
The survey also found other notable trends, including the fact that large claims are on the rise, as 50 per cent of survey respondents indicating that claims dealing with large sums of money have increased anywhere from 11 per cent to 20 per cent; the majority of insurers are seeing multi-million pound claims amounts; conflicting interests was the biggest cause of professional liability insurance claims; and the majority of insurers polled by the survey have had to develop a panel of qualified solicitors throughout the country in order to manage claims.
Several different insurers participated in the study, including London based Beazley Group Plc, AXIS Capital Holdings Ltd, based out of Bermuda, and Chartis subsidiary Lexington Insurance Co, which operates primarily out of the United States.