“Many of my solicitor friends are insanely jealous” that the new arrangements for licensed conveyancers’ professional indemnity insurance (PII) include free run-off cover, one practitioner said in a survey that showed widespread satisfaction with the regime.
A survey published by the Council for Licensed Conveyancers found that 68% of firms were satisfied with the new arrangements, which saw them move away from a master policy scheme to the open market, with two participating insurers this year.
The deal also included automatic run-off cover at no cost at the point of closure of a firm; the high cost run-off cover for solicitors is seen as a significant problem. The CLC said this addition did not affect premiums.
Nearly a quarter of firms were dissatisfied, with those who had sought two quotes but only received one more likely to be dissatisfied, while the highest rates of dissatisfaction were found among those 16% of respondents who said that the new process was more difficult than last year’s.
Nearly two-thirds of respondents (64%) sought two quotes.
The main complaint from licensed conveyancers was that the process was rushed, which the CLC said was down to the timing of the rule changes that enabled the changes. “[We] expect that there will be a longer window in which to make PII arrangements by the time of next year’s renewal process. We welcome competition in PII provision and will keep the market under review as it continues to evolve.”
Other comments included one firm saying that it had saved £38,000 under the new regime, while another was keen to see the market expand to more providers.
The CLC survey said: “Obviously a survey like this one, conducted immediately after the event, only captures first impressions. It is clear that some practices have found the new PII arrangements to be less than ideal, but the majority appear to be happy with the changes to those arrangements and to have been satisfied with the process for obtaining PII.
“Given the scope of the changes and the short time in which they were implemented, this is a considerable accomplishment. And while we recognise that this created tight deadlines which posed difficulties for a significant minority of practices, with the new arrangements now bedded-in, we do not expect such problems to recur.
“Information provided by insurers shows that overall, premium rates are low by historic standards and so competition between insurers seems to be serving the regulated community well…
“The addition of run-off cover free at the point of closure of an insured entity has not led to an increase in premium rates as some had feared. It has also greatly enhanced consumer protection, reduced the potential exposure of the Compensation Fund and removed what has been a barrier to orderly closure of some types of practices in the past.”