Solicitors frustrated by broker tactics

Now silly season is upon us, I thought I would update you on what is actually happening in the solicitor’s indemnity market. I know quite a few solicitors and I understand their frustrations. Rather than wax lyrical, I’m going to stick to the good, the bad and the ugly in the current market.

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The good

There are a lot of hard working brokers out there who are satisfied that they have strong enough relationships with their clients and are not using “hard ball” tactics to scare their clients into renewal. You probably have one of those on your side and your terms and conditions will be reasonable.

Ensure you provide full and detailed information when requesting your renewal terms.

The bad

There are two realities to explain. A solicitor received his form, returned it and was given terms within 48 hours. He was also given 7 days (make that 5) to make his mind up. That’s not even legal.

Another practice (with the same supplier) has incorrect “claims” on the practice’s record and the supplier is refusing to correct them. Naturally, they are worried that the terms will be provided late and prove onerous.

The ugly

Some practices (mainly SP’s) have been refused terms by their current insurer already and are filling out forms (more in desperation than hope) whilst considering their future if they cannot find cover. Their supplier should have helped them with the complicated forms.

The reason for declinature is not being made clear or doesn’t add up. One broker refused to tell their client which insurance companies they had approached. That is not service as it leaves the policyholder with no real options.

Wrap up: Some suppliers are great at maintaining relationships and have secured excellent terms. Others are playing hard ball when they do provide terms, taking advantage of the fact that the competition need time to offer an alternative. Some are being obstructive or abandoning clients they cannot easily help.

Top Tip: If an application is declined request a detailed reason before applying elsewhere.

Litigation expenses insurance – Before or after?

Insurance for legal expenses has evolved along with CFA’s. Client’s may prefer the new “hybrid” offerings that allow them to pay later. Timing is of the essence and there are ways to attract the most favourable rates.

Insurance as an investment

Appropriate policies are an investment if set up correctly. Some insurance companies will accept payment of the premium after the case is concluded and they have a variety of ways to ensure that it is paid. Typically, client’s that have already assessed they have a good chance of winning the case before approaching the insurance market receive the best terms.

It’s important that the terms and conditions of the policy dovetail with other agreements. Only then will the policy pay out, return on investment is guaranteed when everything is in order. As long as the policyholder is aware of the terms and conditions, so they know exactly where they stand.

Interpretation is everything

Insurers will not issue cover without undertaking a thorough review of the circumstances. Provide them with a good case backed up by counsel’s opinion and they will respond accordingly. Investing time at this stage will ensure terms and conditions are favourable.

No two policy wordings are the same so interpret the terms in the worst possible light to exclude shades of grey. If it sounds like it isn’t covered, it probably isn’t. The brochure will paint a picture, the policy wording is the High Definition document.

As an independent broker I am (almost) professionally obliged to say you should refer to an independent broker. Be that anyone you choose, they will be able to interpret the policy conditions and the manner in which different insurance companies handle settlements. Each quotation should be judged on it’s merits.

Timing is of the essence

The earlier you apply for a quotation the better. If clients are relying on After the Event Insurance it is more expensive and restrictive than annual arrangements. As soon as you hear about a claim encourage the participant to at least consider cover. They may already have cover attached to another policy yet it will only apply if a notification is made early.

Delayed applications could mean increased percentages of awards being deducted from your costs or the clients award – if there is one. An insurance company will ensure it receives it’s premium. Where it comes from is up to the applicants.

Wrap up: Insurance is a prudent investment for strong cases. Terms and conditions from a range of providers can be assessed quickly and easily by an experienced eye. A strong case presented early will attract the most favourable settlement terms.

Top Tip: Don’t search the market yourself if your time is worth money.

Solicitor’s professional indemnity concerns

Some solicitors are still punch drunk from last year.

With fewer insurance companies offering cover this year solicitors need more help than ever. Some are rolling with the punches, others have already given up. Here are the options including the good bad and ugly.

Last year the renewal season lead to the dreaded ARP charging solicitors 35% of turnover just to stay in business. Since then, Quinn has proved unreliable and their biggest supporters in the broking community are scrambling round the market for a viable alternative.  The Law Society Gazette reports that mergers are on the up and “the biggest driver over the next few months will be the professional indemnity insurance Read the rest of this entry