Solicitors fork out extra 36% to pay for insurance

INDEMNITY: 225m spent on premiums as Zurich leads way

Solicitors paid an extra 36% in professional indemnity insurance premiums for 2002/2003 as the market hardened, figures released last week have shown.

The profession paid more than 225 million in premiums for the compulsory 1 million layer of insurance, but Andrew Darby, the Law Society's head of professional indemnity, said this was still less than in each of the final three years of the Solicitors Indemnity Fund.

Zurich Professional has been confirmed as the leading underwriter of solicitors' indemnity, knocking the Society's joint venture partner, St Paul International, off the top.

Zurich captured 21.6% of the market for the compulsory layer, with St Paul on 20.7%.

St Paul has seen its share decline from around 25% in the past three years.

QBE is in third with 16.9% and CGU Insurance (Norwich Union) next with 8%.

The rest of the top ten is made up of: ACE Global Markets (5.6%), Hiscox Insurance (5%), AIG Europe (5%), Royal & SunAlliance (4.9%), Alea London (3.3%) and Newline Syndicate 1218 (3.1%).

The other 14 insurers have 1% or less of the market.

Meanwhile, the Society's indemnity insurance committee is to recommend that the definition of policy default is amended so that a firm is in default if it fails to pay a qualifying insurance premium, including an assigned risks pool premium, within two months of it falling due, rather than three months as at present.

The change is aimed at speeding up the regulatory process of dealing with non-payers.

Neil Rose