INDEMNITY SURVEY: 55% say ending SIF was a good move


More than a third of law firms believe professional indemnity (PI) insurance is more expensive since moving to the open market, according to a survey by a leading insurance company.



Although 44% of respondents said they now pay less than when the Solicitors Indemnity Fund (SIF) was in operation, the 36% of firms claiming to pay more will come as a surprise to industry experts, given that the indemnity insurance market is widely acknowledged to have been 'soft' for some time.



Slightly more than half of firms (55%) said moving to an open market was a good thing and 50% obtained three or more quotes from companies before renewing.



The researchers, commissioned by St Paul Travelers, questioned 200 solicitors' indemnity insurance purchasers, half of whom were existing customers. They were mainly in firms of 15 fee-earners or fewer.



Frank Maher, a partner at risk management solicitors Legal Risk, said there was 'no doubt' that, across the profession, firms are paying less for insurance than before.



He said: 'I would be surprised if 36% are paying more than they were under SIF. There may be a small number of firms that have had their fingers burned, but that is what the open market is about.'



The survey revealed that price (70%) is the most important factor for law firms renewing their insurance, although 43% cited continuity of cover as being a priority as well.



Three-quarters said they expected insurers to provide risk management advice to reduce the possibility of claims as part of the deal.



Paul Cusition, professional risks general manager at St Paul Travelers, said: 'We are not surprised that price is an important factor in the purchase decision but reputation, continuity and customer service are also important and many firms are prepared to pay more for better quality cover.'



Anita Rice