Posted by Tony Dyas, senior business developer at Legal Futures Associate Allianz Legal Protection
Choosing an after-the-event (ATE) insurance provider isn’t easy for solicitors. Differentiation between products and price is not always clear at first glance and you don’t really know what you’re getting until you use it years later. And, as with all intangible insurance products, you can’t take it back.
Many solicitors are very loyal to their ATE providers and often focus on price, but this isn’t the only consideration. So, as a law firm, what should you be thinking about when considering who to work with?
For starters you should check the market regularly and ask your own provider some challenging questions.
Here’s a suggested shopping list. You can decide how important each item is to you:
Who is the underwriter?
There are actually very few underwriters in the ATE market. It’s likely that you may be dealing with an intermediary or agent instead, so it’s worth checking who they are and who provides their underwriting capacity.
Have they got the money?
Arguably this should be number one on your shopping list – recent high-profile market failures demonstrate how important this is. Your customer is buying a product they won’t use maybe for three or four years. Will the underwriter still be there?
In considering this, look at their financial rating – such as Standard and Poor’s – as well as their financial results, not just for ATE but for the other business that they write too. Remember that profit is good as it demonstrates success and builds up reserves for future business.
And simply ask them to demonstrate how successful they have been.
Ask about their expertise, as this is what they will ask you
Don’t be shy. They are the experts so talk to them about how many years of experience they have in key areas and what their commitment is to the ATE market.
Commitment to insuring cases
You’ll get a standard limit of indemnity when you insure a case, but what happens on the rare occasion that you need more?
Can your intermediary persuade your underwriter to provide more? Does your underwriter have the financial capacity to provide more?
You will be amazed by the number of cases where underwriters don’t provide top-up indemnity on even the most straightforward of cases.
What level of support will you get?
Think about what you need. A great example is recovering a premium, which is still important for clinical negligence and mesothelioma.
You could ask: How do you help firms that have premium challenges? What is your success rate?
The temptation is to scrutinise only prices and policy wordings. These are, of course, important, but think about who you are going to be recommending to clients. ATE is a service that is delivered over the lifetime of a legal action, so a long-term view is crucial.
So, what’s on your shopping list? That’s up to you, of course, but the most important thing is to get your lists together and remember to be challenging.