By Legal Futures Associate Purbeck Personal Guarantee Insurance
Finding and retaining staff has never been tougher for SMEs and the legal profession is not immune to the ‘Great Resignation’ threat of staff leaving to create their own businesses. A recent survey by Purbeck Personal Guarantee Insurance found that 50% of workers within SMEs have ambitions to start their own business.
While younger employees were most likely to be harbouring entrepreneurial ambitions, 43% of those aged 55 and over also want to create their own start-up. The risk is that an exodus of staff from a solicitors practice could lead to increased Professional Indemnity (PI) claims due to lack of client continuity and loss of skills.
Todd Davison, MD of Purbeck Personal Guarantee Insurance, said: “Premiums for Solicitors Professional Indemnity Insurance (PII) have risen significantly in recent years, largely due to the number and value of claims insurers are experiencing. Many smaller practices simply cannot afford further inflation of their premiums due to claims lodged against them. They need to be looking at the ways they can help engender staff loyalty, particularly amongst their older employees and those who were more significantly impacted by the pandemic. Job vacancies are at an all-time high so keeping staff motivated and engaged is vital.
“The worst-case scenario is that a claim is made against a firm which subsequently fails due to loss of valuable staff. This means the partners or directors, who have signed a personal guarantee to secure the Professional Indemnity Insurance could find their home and personal assets at risk.”
Professional Risks Personal Guarantee Insurance (PGI) policy can, however, mitigate that risk. This new, annual policy from Purbeck Personal Guarantee Insurance has been created to help tackle the increasing demand for personal guarantees from insurers. The policy provides insurance cover for the Directors of solicitors firms that have provided Personal Guarantees for Professional Indemnity Insurance (PII) run-off premiums. The cover applies where the run-off premium cannot be met by available cash resources of the firm.
”With the potential for staff resignations disrupting day to day running of solicitors firms, directors really need to make sure their personal assets are protected,” said Todd Davison.
|Purbeck’s entrepreneurialism survey revealed|
· Men are more likely than women to want to start their own business – 57% of male respondents compared to 43% of female
· People in London and the South East are most likely to be budding entrepreneurs
· Those between 25 and 34 are the keenest to become their own boss (66%), followed by those aged 18-24 (55%) but 41% of the over 55s surveyed also have ambitions to start their own enterprise