Solicitors Professional Indemnity Insurance will defend and cover you if a claim is made against you by a client or 3rd party. Such claims may include, negligence, breaches of trust or defamation.
PI Insurance stands for Professional Indemnity Insurance which is also known as Professional Liability Insurance.
How does it relate to law firms? PI Insurance cover is compulsory for all law firms. It is not unusual for practises to be shut down by the Solicitors Regulatory Authority (SRA) due to having inadequate or no cover.
You will need a regulated insurance broker to source a PII quote. We do not provide any advice on insurance but can assist with setting up a law firm. Please call us on 0115 8700443 or email info@marketinglawyers.co.uk for further information.
Why do law firms need PI Insurance?
PI Insurance protects against claims arising from possible negligence or failure to perform that results in a client’s financial loss or legal predicament. It is there to protect the client if something goes wrong.
PI Insurance for law firms can be considerably more expensive than usual PI cover. The usual rate for Solicitors PI Insurance is typically between 3% and 6% of total fee income depending on certain risk factors and market competition. However, it can be higher especially if there is a history of claims.
The cover is usually cheaper for new law firms setting up. It is important to note that there is also a minimum premium which is the insurers’ starting point for insuring a risk. The minimum premium is usually between £3,000 and £5,000 however, it does vary between insurers so it is best to take advice on the right brokers to use to find the best deal.
The process of obtaining a quotation is not easy and can be quite lengthy. You need to have a solid business plan, cash flow forecast, CVs of partners and directors and lastly, a fairly lengthy written proposal representing the integrity of your law firm.
It is important to take care when applying and it is advised to seek help from law firm start up consultants as it will be checked by an experienced under-writer and the costs will depend on the quality of your whole application. As mentioned above, if you fail to get PI cover for your law firm, your firm can be shut down by the SRA. It is, therefore, crucial to seek professional advice in order to get it right the first time and make a good impression.
Due to the importance of obtaining the right insurance which can be very costly, most firms use an insurance broker who will be able to assess which insurers are best to approach in order to provide bespoke cover that applies to your size and type of law firm, as well as financial strength, reliability, attitude and approach to paying claims.
Looking for an Insurance Broker to help?
Please note that we are not an insurer and are unable to offer any advice.
If you would like a quote for Professional Indemnity Insurance, we can put you in touch with regulated brokers who will work on your behalf to get the right package for you.
We can help point you in the right direction, whether you are a:
- small practice
- medium-large size firm
- setting up a law firm
Contact us today
Email us at info@marketinglawyers.co.uk or call us for a free chat on 0115 8700443
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