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The PII Renewal Season: Overview

The PII Renewal Season: Overview

Professional Indemnity Insurance (PII), is a legal requirement for law firms in England and Wales and covers them against any civil liability claims arising from their work, such as professional negligence. It is one of the biggest expenses law firms face each year, so getting the best deal is vital.

In the past, law firms were required to renew their policies on 1 October. However, last year the Solicitors Regulation Authority (SRA) introduced the option to change the renewal date. While some firms have used this opportunity to bring their renewal into line with the financial year for example, the vast majority have stuck to the traditional date.

Some firms have delayed their renewal process this year as they waited to see the outcomes of the SRA consultations into whether the minimum amount of cover should be reduced to £500,000. Ultimately, the proposal was deferred but because some firms waited, it means there is now a concertina effect, with a surge of applications to brokers and insurers expected in the run up to the 1 October renewal.

It is essential that firms take time to consider their options and make a measured decision. Law firms need PII in order to be able to practice, but that doesn't mean they should take the first or cheapest deal they can find as this may not necessarily be the best option in the long term interests of the firm.

Cheap deal vs right advice
Those law firms that have left their renewal late should find a broker that understands the sector and knows the difference between the best deal and the best price - they are not always the same.

There are very few insurers that firms can approach directly for PII cover, so it is important to engage with a broker that knows what it is doing.

There are examples where firms have been advised by non-specialist brokers to move from rated to unrated insurers, only for the unrated insurer to collapse. This can leave the law firm self-insured on claims that had previously been reported to the insurer, claims that would have been covered had they remained with a rated insurer. This is uninformed and ultimately costly advice.

PII is a huge expense that shouldn't be about getting a cheap deal, it's about getting the right advice. While it is important the insurance is competitive and affordable, it is equally important to have confidence that the insurer will respond when needed. Recent years have shown unrated insurers cannot necessarily provide this peace of mind.

There is plenty of competition and greater stability in the market this year and there is nothing to suggest a repeat of the problems of 2013. Indeed, there have been new A-rated entrants to the market and established insurers have expressed a more positive appetite for providing PII cover.

However, to be more attractive to insurers it is increasingly important for law firms to look at how they are managing risk and ensure they adopt a more corporate approach. This is an important aspect for insurers and the more a law firm understands what insurance companies are looking for from them, the better the picture they will present.

Selecting your PII broker requires careful judgement. A good broker can help a firm present its best side to the insurance market in order to secure the right cover at the right price. Understanding how to do this should be the minimum a law firm should expect from its broker.

Also, don't just look at the financial stability of the insurers they access. Equally important is the broker's experience and understanding of the specific legal market requirements and the mandatory insurance requirements for the profession.

A good broker with proven expertise and experience can be a valuable partner for years to come, providing added value beyond the  PII renewal season, as well as ensuring that going forward law firms give more time and resources to securing the best deal for their business.

Wesleyan's Professional Indemnity Team can be contacted at

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