An underwriting agency specialising in two-year insurance deals is targeting £25m of business for this year’s professional indemnity insurance (PII) renewal period.
Indemnity Risk Solutions says law firms will be looking for longer-term options in advance of the phasing out next year of the assigned risks pool (ARP).
It claims that longer periods of cover will provide peace of mind for smaller firms that may be worried about securing insurance in 2013.
The firm says there has been a ‘significant level of interest’ for the new policy among small to medium-sized law firms.
Paul Lawrence, managing director of IRS, said: ‘The introduction of a two year professional indemnity policy will enable our customers to focus on their cases, not on the worry of renewing their insurance.
‘Longer policies will also allow us to build better relationships with our customers and more efficiently handle any claims or issues they have.’
From September 2013, the ARP will no longer provide qualifying insurance for firms unable to secure cover on the open market.
From October this year, all policies must provide for a 90-day extension at the end of the insurance period if the insured firm has not taken out a new policy.
Steve Holland, a partner at insurance broker Lockton, said increasing numbers of solicitor firms are looking for longer cover to ease any concerns over uncertainty in 2013. However he warned that long-term policies come with conditions. ‘Insurers will guarantee either the premium – or rate – but subject to caveats related to growth in fees and claims performance, which if exceeded can break a long-term policy,’ he said.
‘These types of long-term policies do offer some attraction as they give certainty for budgeting purposes, however they need to be considered in light of the market conditions and how the premium compares with the current market rate.’
Holland added that new market entrants will generate more competition, particularly at the smaller end of the profession, but warned law firms not to choose an insurance provider solely on the basis of price.
‘They also need to weigh up the price of continuity – as they might have built up a relationship with their current insurer and a bank of premium over several years, and these advantages need to be considered.’