Preparing for PII renewal on 1 April

Posted by Marc Rowson, senior vice-president at Legal Futures Associate Lockton Companies LLP

Rowson: Go the extra mile in your presentation to insurers

As the majority of readers will know, 1 April now serves as the date when a number of law firms renew their professional indemnity insurance (PII). Albeit not as populous as October, April also tends to serve as an effective indicator as to what to expect for firms renewing six months later.

There has been much written over the past two years about the ‘state’ of the PII market but the purpose of this article is to advise how best to prepare for renewal, whilst also touching on some pertinent points to consider that could impact renewals across 2022.

With just under six weeks to go until the April renewal, I am assuming that those involved in their firm’s PII process are close to finalising, if not already finished.

For those who have not, it is important to prioritise preparing the information to ensure adequate time for your chosen representative(s) to undertake a full market exercise on your behalf.

At the time of writing, the majority of insurers are still yet to focus on providing quotations, albeit there are signs that this is starting to shift; I expect that, by 1 March if not sooner, the market will very much be in full swing, with all participating Insurers reviewing their renewals and for some, for the first time in two years, considering new enquiries.

Of course, you need to ensure you apply for renewal in ample time, but it is just as important that your presentation is thorough and shows your practice in the most effective manner.

As well as completing the proposal form and any applicable additional questionnaires, consider supplementing these with a covering note – this could prove the difference in persuading a hesitant and cautious underwriter to put forward a palatable option that could then serve as a catalyst to significantly alter the outcome of a renewal.

The note should be considered and focus on the areas that the proposal form does not (I appreciate this is no mean feat with some lengthy forms), primarily:

  • The history of the business;
  • The culture and future plans;
  • Key people and structure of the firm;
  • Client engagement/feedback (if positive, be sure to highlight this!);
  • How work is onboarded – provide examples where the practice has turned down work because the risk assessment was not satisfied; and
  • Investment in resources/IT/third-party providers. Ensure you touch on this and how it directly aligns to an improvement in risk mitigation.

In addition, if you have had claims/notifications, be forthcoming – don’t wait for insurers to ask. It is important to highlight what occurred, how the issues has been addressed, and why there are no systemic issues.

Remember, it isn’t necessarily the claim that deters a prospective insurer, it is the uncertainty that more could follow. Articulating your claims record can eliminate any concerns underwriters may have.

A final point on preparation – I have spoken to lawyers who have faced increased premiums in recent years despite putting together detailed and effective presentations, going above and beyond the norm. What was the point, they ask?

I can’t stress enough how important it is to persevere. We act for over 1,600 law firms, from sole practitioners to magic circle firms – I can assure that you that those that have gone the extra mile have mitigated the increases that the whole profession has faced.

There are signs of green shoots of recovery and firms should start to feel cautiously optimistic about the PII market in the months to come; that said, it is also important not to be complacent in ensuring that your renewal presentation is brought to the attention of all reputable underwriters.

Frustratingly, the barriers to entry in our industry are low and some firms are not being furnished with the advice that is in their best interest, in what remains a limited and specialist space.

Whichever broker you choose to work with, it is vital they are acting in your best interests, provide more than just a transactional service, are able to directly engage with the marketplace and are able to advise which insurers they do approach – and, perhaps most crucially, which they can’t approach.

Amid the green shoots, such an approach is vital.


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