Some firms face falling into the bin of the “assigned risks pool”
Insurance experts are predicting a “hardening” in the insurance market and are warning firms to expect increases in premium levels, with mortgage claims expected to be a major source of liability claims over the next few years.
Frank Maher, partner in Legal Risk, solicitors specialising in compliance advice for law firms, says: “I believe it is inevitable that the insurance market will harden over the next year or so and we may not simply be talking about premium levels, but the size of excesses, whether the excesses are subject to an aggregate limitation, and even whether some firms can obtain insurance at all in the commercial market without sinking into the ‘sin bin’ of the assigned risks pool.” Maher adds: “Claims can arise from work done many years ago, and this is particularly so in our experience with claims by mortgage lenders which are likely to be a major source of liability claims for the profession over the next year or two.”
The Law Society says some solicitors may feel the pinch in the coming months through their professional indemnity insurance (PII) premiums if they fail to introduce systems capable of monitoring their businesses effectively.
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