Ask a broker you are thinking of using whom they will approach. Of the 30 or so Law Society Qualifying Insurers, for most firms there will be only three or four insurers potentially interested in their business. It is essential that when you see the snowdrift of approach letters accumulating on the desk, you choose a specialist broker.

The Law Society, the Professional Indemnity insurers and the SRA seem finally to have agreed upon how to abolish the Assigned Risks Pool (ARP) in 2013. Their statement on 14th April mapped out how they will achieve this.

The SRA Board has announced that from October this year the maximum time that a firm may remain in the ARP is to be 6 months, rather than the current 12. Then from 2012 the insurers and the profession will jointly fund the ARP. The Compensation Fund will become liable for claims against firms which have not taken out Professional Indemnity insurance. The SRA will finally abolish the ARP in 2013. An agreement with the insurers will replace it, whereby they’ll grant a 3-month period of grace to firms which have not found insurance by 30th September.

Insurers have reacted angrily to the proposals: this kind of reform goes in the right direction but they don’t like all this deferment: they’ll have to bear the mountainous costs of the ARP for another year. From comments by the Association of British Insurers it’s clear that they don’t think the nettle’s been grasped.

From our standpoint as advisers and brokers to law firms for more than twenty years, law firms desperately need more Professional Indemnity insurers in the market to compete for their business. We’ve witnessed a big reduction in the number of insurers willing to cover firms, particularly those of fewer than 10 partners. There is a stark contrast between firms of less than and more than 10 partners, in the chances of securing lower insurance costs. There are one or two insurers thinking about moving into the solicitors PII market but no-one knows yet whether they’ll enter this year or next.

There is a proposal from the insurers that claims against law firms from financial institutions be excluded from the SRA’s minimum terms for PII. Firms needing this cover would add it to their policies, presumably at extra cost. For the present however, the status quo will continue. This proposed change will not occur until after the "transition of ARP arrangements” ends in 2013.

Finally, it seems that the idea of changing the renewal date, from a single date to one of a firm’s choosing has had to be put aside for two years whilst the ARP reforms take place.

Are these changes going to reduce insurance costs? Probably not this year because the reforms are all deferred. Nothing has changed for the 2011-2012 year, putting a greater emphasis on the need for energetic insurance broking.

We conform to The Law Society’s Practice Note...
The Law Society - Professional indemnity insurance Practice Note sets out what you should expect from your insurance broker. To access insurers so as to obtain the best result, consider its advice at 4.2.3. If you use Robertson-McIsaac Insurance Brokers you will find that we will:

• be the broker who deals with insurers for you, without use of a wholesale sub-broker intermediary (except in relation to those few insurers which use a particular wholesale broker to front all their business).
• gives advice on how your firm should approach insurers.
• has a composite proposal form so that one form goes to all insurers
• satisfy your need for "whole of market" broking, and disclose whom we’ll approach and whom we won’t
• agree how we will keep you informed of the progress of your submission.
• accept responsibility for your claim notifications, because we have the specialist in-house personnel to manage every matter to its conclusion for you (see below).
• give advice upon issues that arise during the year.

We’re continually advising our clients upon such issues as the application of the successor practice rules, run-off cover, mergers, new firm spin-offs, to name a few that we’ve advised upon these past twelve months.

Avoid making multiple submission to insurers...
An insurer likes best to see your proposal form from one broker. They can then feel confident that by quoting a competitive premium they stand a very good chance of getting your business. However, if they see multiple submissions from the same firm, that firm’s papers go to the back of the queue. We know this from feedback from underwriters.

Lexcel can reduce your premiums…
Lexcel accreditation has been shown to reduce firms’ claims frequency, by amounts so large according to one underwriter that we’ve dubbed it the Lexcel Effect. Savings in premium that result from Lexcel accreditation are not from insurers offering discounts for Lexcel (they don’t) but from the actual reduction in claims brought about by better conformity to a firm’s procedures, which leads directly to significant premium reductions.

How will our claims be handled?
A significant factor for firms when choosing which broker to use is: How will our claims be handled? Non-specialist brokers subcontract all underwriting and claims handling to a wholesale broker with whom you may never have contact. We have found that this can mean that no-one will challenge reserves on outstanding claims, an omission which can hugely affect the cost of your insurance at next renewal. We however keep ourselves and our clients up to date concerning their claim reserves. We accept responsibility for notifying every claim or circumstance that might arise Our claims managers administer each matter you have reported, until its settlement or closure.

The continuing competition for business gives clients of a specialist insurance broker the best opportunity to minimise costs. Robertson-McIsaac has wide experience of the purchase of Professional Indemnity cover for clients, not only for solicitors but across a wide range of professions, enabling us to advise on how the Minimum Terms for Professional Indemnity Insurance affect different firms. We know which insurer to use in order to obtain the most preferential terms for your particular profile of firm.

Preparing and managing our Business Continuity plan the easy way…
Turning to practice management, Robertson-McIsaac provides clients with an intuitive, wide ranging, planning facility which includes a post-incident business management facility. It will help you to comply with Rule 5 of The Solicitors' Code of Conduct.