Are increasing professional indemnity insurance premiums posing a threat to small law firms? Veronica Cowan investigates
- Reports show that professional indemnity insurance (PII) has increased by an average of 30% among small and medium firms, with the cost of PII identified as one of their biggest threats.
- The increasing premiums may be fuelling a rise in legal practitioners leaving private practice and becoming consultants for larger firms.
News that law firms have struggled during the COVID pandemic is hardly surprising, given the importance of face-to-face contact for many clients in certain specialities. But physical interaction apart, it seems that a major reason is because they cannot afford the professional indemnity insurance (PII) premiums required by the Solicitors Regulation Authority (SRA). This mainly covers civil liability claims, and usually professional negligence, in private legal practice. Since insurance is compulsory, if a lawyer cannot buy it, they cannot be in business. Looking ahead to April 2022, law firms will be assessing their risk and seeking cover for it.
Minority rule
‘The question is not about them being able to afford it, but
