After seven years of soft rates for Solicitors’ Professional Indemnity Insurance, we’re now in a hard market. More than ever, there is a need this year to manage the renewal process carefully.

Insurers asked firms for much more information last year. They are asking for more this year. It takes twice as long now to examine a submission. They have not increased staff numbers. Waiting until the last minute is now a perilous policy, as many firms found out last year when so many failed to obtain terms by the deadline. Some firms had to apply to the Assigned Risk Pool only because of delay in submitting the proposal form.

Firms should take heed of The Law Society - Practice Note on Professional Indemnity Insurance. To access insurers so as to obtain the best result, consider its advice at 4.2.3, on the best way to use insurance brokers.

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. If they see your form from two brokers, they understand that you are putting your broker under competition. 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. 9.000 firms to renew on the same day makes insurers concentrate on those firms they’re most likely to win.

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 with the appropriate characteristics as prescribed in the Practice Note. If you use Robertson-McIsaac Insurance Brokers (RMIB) you will find:

• RMIB will be the broker who deals with insurers for you, without use of a wholesale sub-broker intermediary.
• RMIB give advice on how your firm should approach insurers.
• RMIB have a composite proposal form so that one form goes to all insurers
• In disclosing whom we’ll approach and whom we won’t, RMIB satisfy your need for “whole of market” broking.
• RMIB agree how we will keep you informed of the progress of your submission.
• RMIB accepts responsibility for all claim notifications because we have the specialist in-house personnel to manage every circumstance to its conclusion.
• RMIB give advice upon issues that arise during the year such 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 this year.

On a brighter note, many firms saw no rise in premium in 2008 and indeed many of our clients saw reductions. There is continuing competition amongst insurers for your business, but it must be presented in the right way.

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 are not from insurers offering discounts for Lexcel (they don’t) but from actual reduction in claims which leads directly to significant premium reductions.

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. Robertson-McIsaac can access all insurers and we know which insurer to use in order to obtain the most preferential terms for your particular profile of firm.

A significant factor for firms when choosing which broker to use is how will their claims be handled? Non-specialist brokers subcontract all underwriting and claims handling to a wholesale broker with whom you will never have contact. We have found that this means no-one will challenge reserves on outstanding claims, an omission which can hugely affect the cost of your insurance. We however accept responsibility for notifying every claim or circumstance that might arise and thereafter for administering each one until its settlement or closure.

By completing our single proposal form, which is pre qualified with all the relevant insurers, you have the reassurance that we will access those parts of the market which are appropriate for your firm, at the same time saving you the laborious task of completing multiple forms. We will present your firm in the best possible manner and secure for you the best possible terms.

Turning to practice management, Robertson-McIsaac can facilitate the creation of a business continuity plan that assists with compliance with Rule 5 of The Solicitors' Code of Conduct. We ensure that the practice considers the key issues. In this way we help our clients advance towards compliance with BS25999, the new British Standard for Business Continuity Management.

© Robertson-McIsaac 2008 Authorised and regulated by the Financial Services Authority.