Solicitors paid £15m more to insurers for professional indemnity insurance this year, Solicitors Regulation Authority figures have revealed.

The cost of insuring the profession rose from £226m in the 2008/09 indemnity year, to £241m in 2009/10, a rise of 7%.

Between them, the four new insurers that entered the market this year – XLInsurance, Allianz, Inter Hannover and Lemma – were paid £41.5m in premiums, taking a 17% market share.

AIG Europe was the biggest insurer of solicitors, with a 15.2% market share, followed by Travelers Insurance Co with 13.4% and Zurich Professional with 12.8%.

Before 2008/09, insurance costs fell by up to 10% each year since the solicitors’ indemnity fund was abolished. However, in 2008/09, overall premium costs jumped by 9.3% on the previous year. In 2000, the last year of the solicitors’ indemnity fund, the cost of insuring the profession was £255m.

Jenny Screech, legal professions manager at Zurich professional and financial lines, said: ‘The losses arising from claims against law firms are significant. This is partly due to the recession, but also the inevitable result of the onerous terms upon which all insurers are required to write this business. Premiums had to increase.’

Andrew Long, chairman of the SRA’s financial protection committee, said that the introduction of four new insurers into the market had ‘helped to keep the market as competitive as it has been’. He added: ‘It has been a difficult market for some firms, but we have got 24 active insurers out there, with 20 insurers which write £1m or more, and nine which write £10m or more… One of the advantages of the single renewal date is that it enables international insurers to come in and pick up a big chunk of premium in a three-month period.’